Comms Dealer

Comms entrepreneur Mike Harris has successfully built a number of multi-million pound companies including Total Network Solutions, now he's about to do it again with the launch of The Network Selector.

Harris is a serial comms channel entrepreneur who has built a number of multi-million pound companies including Total Network Solutions which was acquired by British Telecom in 2005. He is joint founder of SiFi Networks, a provider of fibre-to-the-home networks, and Chairman of Oswestry-based VoiceComms Warehouse, a distributor of Internet security and network technology. Harris is also Chairman of Welsh Premier League Champions The New Saints FC and he provided the funding for the team's Park Hall stadium which opened in Oswestry in 2007.

Last month Harris launched The Network Selector, a channel only organisation that addresses a number of reseller needs based on their size, capability and level of investment. This is provided through four channels called Talkativo, VCW Voice, Ocean Telecom and Planet Hippo. "Instead of simply acting as a sales agent for telcos where customers are at risk from policy changes, The Network Selector ensures that resellers are at the heart of the business and retain full contractual rights with customers," said Harris. "As well as offering competitive pricing, we enable resellers to solve the geographical reach issues that occur when tied to single network providers."

His career in comms began after leaving school at 16 when he joined BT in 1979. "I worked in local telephone exchanges before moving into data centres and became one of the country's first specialist voice and data engineers," said Harris. "With a background in exchange construction, telephone route planning, data centre layout, point-to-point links and Ethernet connectivity, I had a unique level of experience. I set up Total Network Solutions in 1988 and have not looked back since."

The Network Selector provides a full suite of pre and post sales technical support and a range of administration services including billing, credit checking and debt collection. "This enables resellers to concentrate on building their businesses while demonstrating they have the infrastructure to service even the largest corporate customer," noted Harris. "I also see the wider telecoms market developing along similar lines to the mobile market with bundles incorporating devices, applications and connectivity for a standard monthly charge."

Harris' objective is to become a significant player in the converged communications space and anyone looking back across his career achievements would not disagree with the likelihood of his ambition become reality. He won the Ernst & Young Technology and Communication Entrepreneur of the Year award in 2001 and Total Network Solutions was named as one of the Financial Times' fastest growing companies on three separate occasions.

His on-pitch achievements are just as impressive. "As Chairman, I helped take Llansantfried FC, based in a village of 900 people, from being a mid-table team to Welsh Premier League champions for a record eight times," he added. "Along the way I saved Oswestry Town FC from bankruptcy in 2003 by merging the two teams. The New Saints FC, also known as Total Network Solutions FC until 2005, have dominated the Welsh Premier League and regularly appeared in the Champions League and Europa League group stages. I am particularly proud of the team representing Wales and helping raise the profile of our national league throughout the UK and Europe."

Harris' commitment to the local community in terms of creating employment in the Oswestry region for young people is also a source of pride. "I am proud of the fact that many of the people that started as trainees in my various businesses have gone on to become highly paid and respected employees, both sales and technical, within my own organisation as well as some of the world's leading technology companies," he added. "Some are also now running their own businesses."

Harris has not only influenced the look of Welsh football and the careers of local people, he has helped to shape the way that voice and data networks have evolved. "My current mission is to ensure that resellers remain in control of their customers rather than being sidelined by network providers as commissioned agents," he stated. "Putting resellers at the heart of the customer relationship will protect their businesses from being undermined by any changes in policies by network providers. But it is not just a one-way street. The Network Selector is also set up to help network providers by being easy to deal with, helping to reduce their support costs to the reseller community."

Based on research commissioned by BNP Paribas Leasing Solutions, Rob Bamforth, Principal Analyst at Quocirca, discusses how to spread the cost of strategic IT investments without missing out on the value of doing it right.

It appears from a fair amount of macro economic data that the UK is moving into a period of growth after a significant period of downturn since the financial markets crisis in 2008. There may be doubts as to whether this is a sustained or balanced recovery, or even a blip before drifting downwards again, but either way, many organisations are now facing the effects of a significant period of under investment in their IT and communications infrastructures.

Some will have been playing a game of 'wait and see', assuming that things might become clearer. Others may have simply been focused on keeping systems running with limited resources and staff. The reasons are now relatively unimportant, but the consequences do need to be addressed as the evolution of technology products has continued unabated. So, whether preparing to take advantage of new opportunities and markets, or having to cope with further downward pressures, many will be finding their IT and communications systems will require some sort of overhaul.

Tight budgets might have acclimatised many to trying to make incremental or tactical improvements to existing systems, architectures and business processes. This approach can work for a time, especially when IT innovations fall into the well-worn categories of small, faster or cheaper. However, many recent trends have been far more disruptive, bringing consumer attitudes into the working environment, blurring the boundaries between work and home, and connecting just about anything, anywhere to the Internet.

Many now require organisations to make a step change in their use of IT which extends beyond simply 'buying it', to become 'buying into it'. Changes have to be made at a people and process as well as a technology level. This means making a strategic investment and a serious commitment. In this case it is highly likely that incremental spending will no longer be sufficient or effective.

These disruptive trends have also brought increased complexity to IT solutions that have a wider impact on the working environment. No longer is it a simple matter of buying discrete items of hardware or software. Technology choices have become virtualised and need to be integrated. Effective solutions now require investment in the right blend of hardware, software and services. Delaying or trying to avoid purchasing one element that might once have been considered secondary now becomes a false economy.

The skills required to support this blended solution of IT products and services are typically well at home in the reseller channel, where a mix of different technical skills and the ability to integrate them have often been in demand. However, the scale of sudden investment required by a reseller's prospective customers to allow them to architect the right sort of solution may pose a challenge.

Smoothing out any sudden step change in spending to help the end customer meet its strategic objectives would be valuable and minimise risk for both reseller and the end customer. It also avoids any lengthy delays or uncertainty, both of which have significant impacts on any IT project.

Cutting the upfront cost of strategic infrastructure investment is something that can be provided by alternative solutions such as managed services. Where the technology is well defined or a discrete set of services, this can be accomplished relatively easily. Entire systems can be hosted and managed or individual elements could be delivered in a public cloud-based 'as a service' type proposition.

This might make it easier to spread the impact of IT costs through recurring monthly subscription based on usage, although moving an entire system architecture into a public cloud-based approach would not only be challenging but potentially undesirable. Making the transition is something that will require effort and predictable cost management.

System architectural and strategic decisions should in any event be based on business requirements not on financial constraints, and so the best approach would be to ensure the financing options support the right technology decision. This not only means that the customer gets the right and complete IT infrastructure in place, but that they can have it when they need it, rather than trying to make do and mend. This gives them flexibility to then support business moves to grow, or to manage costs or risk.

Those involved in selling and supply can be confident that they can offer the optimum solution to keep their end customer happy and strength the customer relationship. They should also be assured that they have won the entire piece of business and can be rewarded up front, rather than risking losing out or being undercut as customer circumstances change over time.

With the right financial package the entire infrastructural solution - hardware, software and professional services - can be incorporated. This ensures that even the most complex and strategic integration projects can be delivered without having to hunt around for pockets of funding or under spent budgets.

Getting off on the right footing with any IT project by delivering a system architecture that is based on the entire business need provides a firm foundation for future innovation, and is the best way for IT departments and their supplier to be recognisably acknowledged as supporting commercial goals.

BT Wholesale's new Business Zone portal is a derivative of the overall drive towards digitalisation within an environment where service and support matters more than ever, according to Josh Pert, Director of Multichannel Customer Experience, BT Wholesale.

Pert is right, dinosaur practices must be stamped out and new ways of doing things founded. Digital is now the preferred transaction method for many of BT Wholesale's customers and Pert has played a blinder to drive a transformation programme with the strategic momentum to differentiate through the service it offers to partners. "The transformation programme aims to provide a customer experience that makes it easier to do business with BT Wholesale," said Pert. "That means finding ways to allow our partners to spend more time engaging with their customers and less time and effort getting what they need from us."

The Business Zone portal is only the start of what will be a long-term transformational programme with process and automation at its heart. "Process is fundamental to this programme," he said. "Creating recognisable, componentised processes that work across the portfolio means we can quickly apply capabilities to new products or services. When onboarding and training resellers we can reduce the time for them to adopt new parts of the portfolio as all interactions and applications have a familiar functionality and flow. That means our partners can focus on their knowledge of the product rather than the systems that support them."

The transformation programme proves that automation is a benefit for everyone operating in the value chain, believes Pert. "As an industry we are all being driven to find new ways of delivering better returns in the face of fierce competition," he explained. "We believe that creating capabilities that drive convenience adds value, and that belief is underpinned by the partners who are working with us on trials of new functionality like Business Zone. A collaborative creation of tools means we have more confidence that we are delivering where it matters most for the customer."

Pert has a strong background in digital transformation and customer experience. Prior to joining BT he ran online transformation and multichannel projects for one of the big supermarkets and also for a global education business. "The role in BT Wholesale was interesting for me as it was my first real foray into a B2B business, and brought a host of new challenges when thinking about how to present an experience via digital tools," added Pert. "I hope one of the perspectives that I and the rest of the team bring to the business is insight into how we all use the web in our daily lives, and an ambition to translate some of those familiar experiences into a business environment to deliver simplicity.

"Understanding the complexity of the services that we support in telecoms is critical, but it's also vital to be able to step away from that detail at times and ask what the ideal customer or user experience would be, and then drive the necessary process change to achieve that. This is what we've done with Business Zone by taking literally hundreds of data points about service and presenting them in a way that is easy to digest at a summary level, and also easy to drill down into the detail where needed."

On taking his new role last summer Pert was impressed by the sheer breadth of the sector covering legacy through to next generation products, but the opportunity to deliver better service across the piece was obvious. "Given that many of the more technical aspects of delivery were never going to be fixed overnight we focused our efforts initially on areas like content quality to ensure that we were auditing and updating on a more regular basis," he said. "This is particularly challenging in a regulated environment where presentation and availability of certain information is an absolute necessity.

"We're now helping resellers by focusing on the integrated services at the forefront of our programme. The new ordering experience we've built for the Centrex product launched this quarter was developed in parallel with the service design. This approach ensures that we provide a highly intuitive experience for a complex set of services spanning connectivity, sites, users and software access right through to hardware.

"Whereas previously all of the elements of the service would have been procured separately they are now integrated into a single experience, removing long lead times and multiple touches to place an order. The increasing use of machine-to-machine transactions also offers resellers the opportunity to group services together on their own portal and place requests back in to us without any manual intervention."

Pert expects to see greater demand for more complex bundled solutions providing connectivity and over-the-top services that manifest themselves quite differently from a customer perspective, versus stand-alone services when it comes to experiences like billing, diagnostics, configuration and management. "The increasing availability of data and analytics will also allow us to give better, more proactive insights into how networks are operating and better information on service issues," he added.

The most significant trends on a market level are the move to the next generation of products that offer the ability to manage and configure continuously throughout the contract, believes Pert. "Now we have the opportunity to interact more frequently we should look at where that allows us to add value," he commented. "Our watchwords are 'simplicity, speed and engagement'. Get those three things right and you have an experience and a business that is not only dependable as a partner but also more valuable.

"As an industry we need to find ways to put the customer first in processes like switching, but that's often contradictory to commercial interests. Having said that, switching is just a symptom of not making a customer proposition compelling enough to be really sticky which doesn't always mean price. Service and support are increasingly the factors that will bind customers to you."

But the speed of change could threaten an organisation's ability to deliver impeccable service over the long-term unless real reform is undertaken with both eyes fixed beyond the horizon. So Pert has defined a proper balance of foresight and strategy to ensure that BT Wholesale remains ahead of the game. "The demand and needs of customers are changing so fast through our experience of software defined networks and cloud services that we need to be aiming far in front of the target in order to keep up," he said.

"In the short-term we'll continue to roll out Business Zone to more customers and also increase the breadth of products that are available through the portal. I also want to focus on some of the non-transactional aspects of our online presence to provide more insight and inspiration, and even the opportunity to collaborate across the industry."

There was a time when SAS Global Communications CEO Charles Davis planned the construction of buildings. Now he is the architect of a channel growth story built on the principles of strategic draftsmanship aligned to a clear vision of what the market really wants.

Things go to plan due to good planning, a policy that Davis has stuck to throughout his career. Perhaps this discipline was instilled during his early days operating as an architect. He then became an IT systems manager, which in turn led to the post of EMEA IT Manager for an international design firm. "Back in the early 90s we were at the vanguard of 3D modelling with live building databases and global team collaboration, all over an international network of 64k kilostream circuits using Bay Networks routers," said Davis. "SAS was my supplier when we moved to Novell servers and Microsoft servers and desktops, and it seemed to be the right time to change career."

SAS is in its 25th year of trading and employs over 145 people with less than two per cent staff turnover. Revenues of £18 million are for the most part attributed to professional and managed services. By design, the firm has limited hardware and software revenues, with 85 per cent of revenues recurring while 70 per cent comes from contracted multi-year managed service contracts. SAS operates to a five year business plan and is currently in the second year of its third planning phase. "The ultimate goal is to move from £15 million to £30 million in revenue of professional and managed services," added Davis. "By that time SAS should be influencing over £200 million of voice, data and hardware sales."

SAS designs, builds, manages and supports converged IP networks and applications for on-premises and cloud-based computing. Its target markets cover all verticals and the high end SME market (what SAS calls corporate mid-market) as well as low end enterprise. The business is split 50 per cent direct and 50 per cent via partners. SAS has helped its partners sell over £120 million of voice, data and hardware revenues with a high level of customer satisfaction that ensures long-term revenues.

The company has been solution centric since 2001 (rather than product focused) and has no product silos to break down and rebuild. It monitors and manages more than 210 customer networks, including 16,000 devices and 10,000 data circuits across 52 countries. Perhaps the biggest changes the company has undertaken is its transition to managing the application path from end user to data centre. To do this SAS has broadened its managed network services capability by adding managed platform and managed application services to name but two. "The strategy is to bridge the gap between the application and network and ensure that all the interdependencies - which are usually overlooked - are monitored and addressed so that our clients' operations run optimally around the clock," said Davis.

"Put another way, we aim to help optimise the end user experience of business critical applications by drilling into the three overlapping areas of network, platform and application performance. We believe it's too easy to blame the network for poor user experience, and that's been the de facto tendency for too long. Our aim is to pinpoint performance issues across the full application path rather than engage in a guessing game or defaulting to a soft target."

Alongside this, SAS has also extended its managed network service to include hybrid networking that includes fixed line public and private networking, as well as medium-to-high bandwidth mobile and satellite networking. This has been a well received service. "Hybrid networking is really taking a hold with clients as they start to adopt cloud services in greater volumes," said Davis. "The growth is predominantly MS Office 365 and MS Azure, as well as VDI from Colt. Clients have started to review their business application strategies and the IP infrastructure to deliver a wide range of applications, so we have to be even more technically, geographically and commercially flexible while keeping access and data secure.

"We are also seeing a greater demand for 10Mb plus mobile data services outside the footprint of the major fixed line networks, as well as a growing requirement for vehicular solutions especially in construction, utilities, highways and transportation sectors. Although vehicular connectivity solutions are still evolving, we're engaged with some fantastic trials and have had some great success already deploying solutions in ambulances, buses through to ubiquitous white vans supporting engineering and public sector services."

There have been three major turning points for SAS. The first was partnering with BT Business back in 1998 when ISDN data networking was the WAN of choice and ISDN dial up Internet access was all the rage. The second was the strategic decision to leave hardware and software sales behind in 2001 and focus on professional and managed services. The third, in 2005, was investing over £10 million in its 24x7 network operations centre over the last few years. "The transition has been a hard slog but has proven a far more resilient business model," commented Davis. "Recurring revenues are now at 85 per cent per annum."

He sees a huge £50 billion-plus opportunity in SME IT services, especially the upper middle market of 500-1,000 staff. This represents around 8,000 prospective clients. "Managed IT services is the high growth area of

the market," added Davis. "There are no major market players, even BT has only a two per cent share. Unlike many of our competitors, we have not taken a 'build it and they will come' type approach. We don't own our own nationwide network ring, we don't own our own data centres, we don't own a plethora of application platforms. What we do is work strategically with industry leaders and build best in class solutions which we then monitor end-to-end (the full application path) 24 hours a day, every day."

Another key point in SAS's strategy is to leverage its agility and technical expertise. "We already have a strong leaning towards predictive (as opposed to proactive) monitoring and reporting and we will be investing further in our systems and resource to support this differentiator," said Davis. "SAS is an insurgent, delivering the right service at the right cost. Enterprise players cannot scale down to this model and SME players are hard pushed to find the investment needed to build this capability."

A current priority is to continue growing profitably at 15 per cent per annum while remaining focused on high annuity revenues afforded by the managed service revenue model. "We are looking for complementary managed IT services businesses to add to the SAS portfolio, but avoiding the me-too plays of managed voice, UC and IAAS," commented Davis. "These are areas where competition is high and are moving to a low margin commodity play. The main factor is to always be customer centric with the ability to understand how we can add real value to a customer and ensure that we do not stray into areas that add little value. SAS will only sell a client a service where our professional and managed services add value, otherwise you are just participating in a price conversation."

According to Davis it is time to change the industry's lack lustre reputation and stop carriers competing to be the 'best of a bad bunch' via proper long-term planning. "There is so much focus on purely 12 month business plans that no one has the time nor stomach to make the required transformation," stated Davis. "At present the telecoms industry is in a continued slow and painful decline that takes customer service to new unprecedented lows.

"There is too much hype in our industry about new technologies which go on to deliver a fraction of the benefits originally put forward. Manufacturers and carriers, through commoditisation of their services, have lost their customer focus and what they want to say does not resonate with their intended customers. The big medium term risk for telecoms is the rise of knowledge workers and the demand for management information. Big data is moving decision making power away from the IT department and moving it to the business analysts. IT staff may lose their decision making power as their role will solely be to provide the correct infrastructure."

Although network service provider ICUK has doubled in size over the past two years the business still remains lean and profitable due to efficiencies delivered by a Back to Basics philosophy employed by Managing Director Paul Barnett.

Back to Basics is the internal programme ICUK has adopted this year to understand and implement the changes its customers want from the company's existing systems before it focuses on new projects. The strategy emerged from the complications ICUK once experienced as a reseller, as Barnett explained. "We used to be a channel reseller and many of our suppliers are now our competition. The experiences we had using their platforms and processes led us quite early on to make the decision that to create what we wanted, to correct the issues we witnessed, we needed to develop our own.

"In going it alone it would have been very easy for us to buy off-the-shelf software solutions for our entire product range, but with each choice will come limitations and a roadmap that you can't influence. Our choice to develop in-house has never been regretted and increasingly has become the biggest strength of ICUK that allows us to stand out in the channel. It's never easy, especially with a portfolio covering web hosting, broadband and telephony."

Under the edict, Barnett has ordered a complete refresh of the company's current systems and solutions before contemplating new product launches. This has involved clearing down bug lists, reviewing customer suggestions and implementing change for a better and more automated platform across all three core parts of ICUK's business.

"With in excess of 600 channel resellers it's all too easy for us to take a view that we should rally to extend our portfolio, even if it means products sit outside our direct influence," added Barnett. "This could see ICUK add mobile solutions, cloud hosting, payments, VoIP and even hardware services. However, in diversifying without clearing down to-do-lists on the existing platform we run the risk of falling foul of what so many of our former channel suppliers did in the past when we were reselling, and not actually delivering what the customer wanted. You race ahead onto a distraction without ultimately finishing off what you started.

"We are looking to perfect our existing portfolio. If we succeed, we not only have a strong marketing case with a plateau of features, but we have an existing channel that is satisfied they have picked wisely and have even greater confidence in their sales and support approaches with clients."

Barnett believes resellers will appreciate ICUK's ethos that dispenses with glory hunting sales people and account managers and focuses on technologically driven support with 'Formula 1' race team standards. "By returning to basics and analysing how we and resellers operate we have been keen to hand over more control, build-in greater levels of automation and streamline processes as much as possible," he added. "Repeat issues need better and slicker responses from us by building on the inherent experience we have internally. In doing so we can better serve our channel partners and their clients.

"If you look at a Formula 1 team and compare their pit stop times from the 90s to the modern era, little-by-little processes have evolved and what may have been a problem in the past aren't an issue now. Evolution comes from the procedures undertaken and in the methodology of tools used.

"We have always prided ourselves on the simplicity of our software creations. In addition, we have a front line support team trained and empowered to easily complete the task of sales and account management. If we can ensure that the software works how our clients want to operate, empowers them to act without our influence - and should human interaction be required and the response is educated and polished - we have evolved for the better."

Barnett is convinced channel partners will appreciate ICUK's no nonsense, less than flamboyant approach and if he is given a geek badge he'll wear it with pride. "When was the last time you heard a network provider promote how exceptional their support processes are, and back it up, or their latest control panel developments? Think of us as geeks if you like, but we're in a technologically driven industry and isn't that the home of the geek? We like to focus on support and development to deliver a premium service.

"Back to Basics is designed to give resellers confidence. Confidence in what they are selling, belief in who they are partnering with, and knowing what to do should the worst occur are just as important as competitive pricing. In this current channel environment that can often be forgotten or diluted.

"We suggest resellers ask themselves a simple question: Does their channel provider have a larger sales force than their support and development operation? The answer to this can be very telling. We trust our partners, we empower them, and in return even the smallest partners on our books are turning up some fantastic contracts with some of the world's largest companies."

The comms industry's most critical imperative is to offer faultless customer service, according to Inclarity Communications Director Enzo Viscito who leads by example.

It was Viscito's erstwhile deep attraction to fancy cars that ultimately drove him along the road to a career in comms. Seduced by the eye candy, Viscito has not looked back since he joined what was then a household name in the telecoms sector. "I got into comms purely by chance when I was looking for my first job in sales," he said. "Naively, I got an interview with a company called Norton Telecommunications without knowing anything about comms, but when I saw the sporty company cars the sales guys were driving I knew this was the job for me."

Fast forward to today and Viscito is comfortably in the driving seat steering Inclarity towards a new phase of growth based on sound business principles, spotless service, an advanced hosted strategy and impeccable technology. Inclarity has long been known as a trailblazer for hosted telephony, first taking it to market in 2002 when the company founder acted on his conviction that hosted would become a force in business communications. "It was early days, but he was right to turn his vision into strategy," said Viscito. "We now have a great channel model."

Inclarity's investment in the BroadSoft platform in 2010 created a new springboard to take more market share. A subsequent investment in the network is also certain to pay off with the year-long project nearing completion. "The network is state-of-the-art and fully resilient and will allow us to offer our channels more innovative solutions next year," added Viscito.

Most telecom VARs, SIs and consultants recognise the need to change and evolve along with their customers' requirement for innovation in solution delivery. But transformation can be challenging and requires dedicated support and resources from the hosted telephony provider. This in turn builds greater customer loyalty leading to lower churn and ultimately improved ARPU, believes Viscito. "As our partners look to develop new skills and adjust their business models to become more competitive, they need a compelling vision and roadmap from experienced best-of-breed vendors with strong financial incentives and clearly defined processes," he said.

Inclarity offers the full suite of hosted solutions through its channels including telephony, call centre, soft phones, SIP trunks, UC and video. The target market is predominantly SME but prospects in the large enterprise market are also bright with recent customer wins employing 500-plus staff. "One of the main trends we are seeing is customers wanting a flexible model that allows them to switch users on and off whenever they desire, with full disaster recovery built into every solution as standard," commented Viscito. "Customers are putting more emphasis on flexible SLAs rather than price, with customer support being paramount."

Customer service and growth strategies are two sides of the same coin and to flip-out on customer support is a gamble that is doomed to fail. "Customer service is everything to our channels and without it you cannot grow your business," added Viscito. "We invest heavily in our support team and our satisfaction figures are at 97.5 per cent, with 95 per cent of support calls answered within five seconds. Our growth strategy is dependent on our customer satisfaction level. We use a carrier grade best-in-class platform that provides 99.999 per cent reliability, achieved by using a resilient architecture with full redundancy built into both the hardware and software components. Outstanding customer service is the only way to do business."

Inclarity has a strong team that brings together decades of telecoms experience, a dash of entrepreneurial flair and a passion to empower the smaller business by using advanced communications technologies in a robust and straightforward way. "We are fortunate that our staff turnover is low," said Viscito. "We promote employee engagement across all levels of our business and encourage staff to adhere to Inclarity's goals and values. Every member of the Inclarity team has influenced and continues to influence the evolution and continued success of our business.

"Our mission is to help businesses use hosted communications to drive revenues and profits. We achieve this through innovation, hard work and investment in R&D and customer service. The challenge is ensuring that we all perform to the best of our ability every day. I like to lead by example."

The channel's focus on the market should be collaborative, not separatist, and to go it alone would be to remain in the shackles of doomed legacy, according to delegates at a round table debate hosted by Comms Dealer and supported by Entanet.

Today's ICT resellers operate in a market characterised by unstructured demand and fluid buying behaviours where, increasingly, customers are part-way through the procurement process even before their first sales meeting. "We were selling hosted 10 years ago," said Philip Donigan, Sales Director, STL Communications. "Back then it was a customer education process, today they understand hosted, and most people we speak to understand the technology, what they want to buy and the benefits. Now it's about us convincing the customer that we can deliver a workable solution. It's all about knowledge and the need for customers to partner with organisations that deliver and support solutions."

ICT purchases no longer follow a formal procurement process based on predefined needs, and the ability of reseller sales staff to perform effectively in such conditions may now be in question. For example, their first hurdle could be to deconstruct the prospect's preconceived ideas about what they want in order to guide them towards a better solution. "Customers understand far more about the technology, but they don't know how to put a solution together that gives them exactly what they need for their business," said John Teague, Managing Director, ITEC. "Sales people have to start understanding the customer's real requirements. We don't sell kit so we can have a frank conversation and discuss their needs which ultimately might be a million miles away from their initial perceptions."

Increasing deal sizes and win rates in an environment where more customers want integrated services presents a number of challenges for resellers, such as properly identifying customer requirements, aligning product portfolios with those requirements, qualifying deals and bringing the elements of an integrated solution together seamlessly. "Customers are much more educated which is a challenge for partners," commented David Dadds, Managing Director, VanillaIP. "Resellers were once advisors, and for the most part, vertical in their product set. Now they are part-advisors and have to be more knowledgeable across different verticals. Customers have even told us about applications we didn't know existed. We are not always the givers of knowledge, and partner education is one of our biggest challenges. In the old days resellers provided a single solution, now they're providing multiple solutions and customers need advice."

The impact of these trends is already being felt and greater collaboration between partners could be the only option. "The shift from selling boxes to selling business needs is a quantum leap for our industry," commented Teague. "You cannot do it all on your own. If you haven't got the processes in place how are you going to deliver the service properly? Customers are more demanding than they have ever been. They have insights into how these things are done and react adversely when they're not done to the letter. The way forward for our industry is total collaboration. Stick to what you're good at, be best at it, and work with other people who are just as good in their particular field."

Resellers have interface points with a number of other parties and they need to approach that middle ground more collaboratively, according to Martin Taylor, Director, Redwood Technologies. "Resellers need to know more about networking so they can have the IT-telco discussion," he said. "They need to know more about the business needs of customers, and they need to know more about the product side so they can interface better with people sitting above with the technologies.

"Just as importantly, we need to know more about their sectors so we can train project managers to have more valuable conversations with the reseller. Further upstream, as well as computer scientists we have mathematicians working on future models. Everyone needs to build out and extend their positions by upskilling in order to interface more closely and collaboratively with other organisations in the chain."

To say that the market bears little relation to its form of just a short time ago would be to greatly understate the speed of change, and Donigan pointed to a stark sign of the times. "The minute is neither here nor there now, but 18 months ago it was important," he commented. "For us, it used to be a case of being good at selling PBXs, or more latterly good at selling a hosted seat, or broadband line or Ethernet connection. That was it, the customer brought it all together.

"Now we are involved in delivering a solution. We are expected to configure the LAN, plug it into a firewall and make our way to the Ethernet service and manage everything. It's far more complex now so to deliver our solution cost-effectively it's necessary for us to invest in IT skills and take-on networking engineers. This is a logical step."

Such notable shifts are taking place across all levels of the comms industry but one constant factor is the customer base, which if managed properly will keep resellers' feet dry in a sea of change. "The channel has those all-important relationships with the customer and knowledge of their key market sectors," added Taylor. "We have knowledge of the technology and we see more resellers bring prospects to our demonstration area where our project managers and application engineers spend time helping customers shape their requirements. Resellers already have these relationships, they are providing a service, they understand the customer's requirement for additional services and they want to show them the technology that is available."

Collaborating with customers to uncover their real needs will also prevent pricing issues becoming the legacy of a technology revolution that has unleashed an information free-for-all. "The Internet is almost crushing the channel," said John Larkin, Managing Director, The Kenton Group. "There is so much information available including transparency on pricing. With connectivity, for example, customers have access to Openreach prices and may be able to calculate your margin based on what you're charging them. But business is about relationships. Now, it's about collaboration, knowledge, consultancy and added value. These are critical."

Knowledge is the product of learning and imposing an upward ratchet of education has enabled 8x8 Solutions to significantly drive sales through its channel. "We had a number of partners who struggled to articulate and position UC," said Charles Aylwin, Director for Channel and Public Sector. "They had spent many years selling PBXs so we set up an academy in 2011. It took almost nine months to get people trained to the point of being effective and accredited. The academy has now accelerated our growth. We also measure churn very carefully. Churn comes from bad customer experiences. If we do a brilliant job on a wet piece of string the customer still has a bad experience so we focus hard on getting it right. We have forward looking conversations with customers and qualify every stage of what we are doing, not just in terms of selling the solution but also living with it."

It is clear that a time-worn sales pitch is no longer the solution to a prospect's needs. Doing so is to tread a familiar - and doomed - path. But the scope for ICT suppliers to win deals based on broad collaboration is widening. "We don't sell, we do solutions and help other companies that can't," stated Teague. "You can operate in specialist markets but extending into unfamiliar areas could see resellers become mediocre at everything. We're now talking about unified and collaboration, which is every aspect of an organisation's life. It's not just about the infrastructure, it's about how they run their business and what the solution does for them. It's far better to partner with someone who is good at their particular area and add the two together."

Ian Calder, Managing Director of Centrix, has defied all temptation to go it alone. "I'm a great advocate of collaborative working to add value," he said. "In the past we collaborated through necessity but now we do so by design. For example, we outsource to software developers. But when you partner with someone they may be delivering on your promises so its important to have good processes and to choose your partners carefully."

Partnering is an accepted success factor and for many channel companies sticking to a policy of selective collaboration has become the number one priority. "There are certain people we partner with in all spheres," noted Enzo Viscito, Director, Inclarity Communications. "Whether it's connectivity or UC, you gain their expertise. If we can do it well ourselves we will, but sometimes speed to market, getting people trained and even the cost of employing staff is prohibitive. It's far easier to partner. But if the infrastructure beyond our control doesn't deliver reliability we are left in the mire. We may have done everything for the customer, but it's our name that's tarred and that's what frustrates me. That's the biggest challenge we face. But we're in a situation where we all need to partner."

Combining respective skills should become the master of all supplier and reseller partner relationships, with all parties driving towards a common goal, agreed Entanet's CEO Elsa Chen. "As a wholesaler, it's right to do what we do best and strive to make it even better," she said. "Executing processes that add value for the channel is what we do best after all. For example, for the connectivity element of a solution, our specialism in providing the network, the resilience and the support removes the hassle for delivering these from channel partners. They can rely on us to deliver that efficiently and accurately. More widely, relying on collaboration with another organisation is a key challenge when you have to respond to opportunities quickly. In terms of reliability, people need to think carefully about their choice of partner. It's not about cost."

Philip Carse, Analyst at Megabuyte.com, reports on the recent performance of leading companies in the comms space during the last quarter.

The highlight of the last three months has undoubtedly been corporate activity among the business comms service provider community, with Daisy accepting a take-private bid from founder Matt Riley and private equity investors Toscafund and Penta, Gamma successfully listing on the London AIM stock market, and XLN changing owners. There has also been plenty of M&A activity in networks, with Interoute buying Vtesse and euNetworks being in talks.

The Daisy cash offer was at 185p per share, or £494m for the equity, valuing the company at 11x historic EBITDA, a full price for a business whose EBITDA actually fell 10% in the first three months of the current financial year according to the offering prospectus. With the aim of the P2P being to undertake larger acquisitions than in the past, we consider Phoenix IT a potential target given its mid-market focus and also having Toscafund as a significant shareholder.

Gamma's successful IPO at 187p per share for a £165m market capitalisation represents second time lucky for the company. It is intended to raise the profile of the company, with no new monies being raised, but existing shareholders selling down 50% of their holdings. The IPO valued Gamma at 8.7x historic EBITDA, an interesting contrast with Daisy particularly given that Gamma grew revenues and EBITDA by 16% and 42% in the first half of 2014. There is no news on Timico which had to abort an IPO earlier this year, while rural broadband provider Gigaclear is currently attempting to IPO.

XLN, which focuses on the very small end of the business market, undertook a buyout from ECI Partners, backed by debt from Blackstone's GSO Capital Partners. The reported £140-150m price values XLN at about 8x historic EBITDA. We wonder whether XLN will use Blackstone's greater firepower to attempt to buy Universal utilities/Unicom.

Networks remains an M&A focus area, following Zayo's acquisition of Geo networks earlier this year. The most recent deal has seen Interoute buy Vtesse Networks, substantially boosting its UK footprint and bringing more data centres on-net. The deal adds about 5% to Interoute revenues.

Meanwhile, Singapore-listed but UK centred euNetworks has admitted to being in M&A discussions. A potential buyer is Zayo Group, which coincidentally achieved a US stock market listing, albeit after having to cut the price by 15% due to weak markets. There were also several small M&A deals, including by serial acquirers such as Chess (Parachute IT) and GCI (CommsXchange).

In share price terms, the sector has had a torrid three months in line with a general stock market collapse, with an average share price decline of 5.6%. However, the average 8.7% rise over the last 12 months is well ahead of the FTSE's 4.6% decline. The only stocks to have shown significant share price rises over the last quarter have been Daisy, due to the take private, Redcentric and Telecom Plus, both due to solid trading updates. Most other stocks have fallen 5-10%, with the exception of TalkTalk (-14%) and Pinnacle (-32%).

The out performance over the last year has been led by Redcentric (+43%) due to the company demonstrating organic growth and significant synergies after the acquisition of InTechnology. Other notable performances have come from Daisy, Alternative Networks, Maintel and Coms (+19-26%), while the main fallers have been Pinnacle (-69%) and Adept (-17% despite decent results).

Results and trading updates released recently show the usual mixed picture with market hotspots and notspots. The pick of the bunch were probably Gamma's very strong first half performance and the decline in Daisy EBITDA in its first quarter, while Alternative Networks and Maintel reported solid trading, aided by acquisitions of Control Circle and Intercept IT (Alternative) and Datapoint (Maintel). Among private companies, we would highlight strong performances by Fluidata and Spitfire and less impressive numbers from Charterhouse Voice and Data.

IS Research publishes www.megabuyte.com, a company analysis and intelligence service covering over 200 public and private UK technology companies.
philip.carse@megabuyte.com

The dream of a ubiquitous network is in need of a reality check and it's time for the industry to properly assess the connectivity landscape and settle on a true vision of what the future of networking will look like, according to delegates at a round table debate hosted by BT Business Partner Sales at the BT Tower.

Arguments in favour of the growing importance of networks to manage flows of data (and even relationships) are unassailable. Networks have become embedded, they are changing our lives and the drivers of change have combined to create an unstoppable force. It is now clear for all to see how network usage will evolve, but what about the enabling infrastructure? There is a mass of evidence to show that hosted communications is becoming mainstream with more customers than ever snapping at the heels of resellers able to give them what they want. This craving for bandwidth will only become more rampant, but all is not equal in Britain's networked landscape.

"The challenge is aligning business strategy, applications and topology with cloud-based services," commented Robert Sturt, Director, The Network Union. "Having cloud-based services is one thing, but getting them to work correctly is another and requires well engineered networks. The perception of connectivity as a commodity is changing because of the cloud. You need resilience, diversity and correctly engineered networks or it won't work."

Networks have changed the way we work and have become integral to our daily lives, empowering organisations and individuals as never before within a new networked world. "Financial challenges have prompted a change in business practices and how applications are used to drive out costs," said Charles Davis, CEO, SAS Global Communications. "Apps drive everything around the infrastructure and we have seen a centralisation process with on-premise apps such as voice and video moving to a cloud platform based on the opex model. With home working, mobile working and virtual teams, we need to provide connectivity for those people wherever they are."

How possible is it for everyone to take part in this new joined up vision? The answer could be innovation in the design of hybrid networks. "Consumerisation has raised expectations about business communications, but we have to navigate customers through their perceptions towards the reality of hybrid solutions," commented Davis. "There is hybrid networking now with 3G and 4G and satellite services. Those price points will come down and you have to mix and match that solution together. There's never going to be a vanilla networking offering anywhere within the country. For us, the future is going to be hybrid networking - fixed line, mobile, satellite, with commercial and contractual flexibility being significant. It's important for our industry to make clients aware of this."

Comms Solve Managing Director Ty Gardner displayed great enthusiasm for the device as numero uno in any consideration of networking. "We see more and more wireless deployments because people want to use the device," he said. "We don't talk about the connectivity because the biggest driver is the devices. It's about the business, how they operate and contact clients. Only then do we put the plumbing in to support the way they want to work. But the idea of one carrier and one solution is dead in the water. People need more bandwidth but the networks are still designed around cities and towns. Every bit of network we need in the future has to be a form of data Internet - mobile or fixed. We need good sized pipes in the right places at right time."

Bandwidth hungry consumers are feasting on a menu of connectivity options that are far from coherent, and the sticking point is a lack of ubiquitous connectivity. While there are clear matters to be addressed about rising customer expectations on what is technically and regionally possible in networking, just as influential is a lowering of service expectations led by the usage of Apple, Skype and FaceTime, believes Davis. "Rather than high-end video conferencing people are happy to use an iPad," he said. "They have become used to a poor service and this experience has an influence in the corporate market. You have to steer clients through that whole swamp."

The depleting service expectations of end users will reinforce the widening gap between traditional comms and the Internet era, and clinging to old values could prove to be a grim legacy, warned Keith Harvey, Head of Sales, Partners and Channel, TFM Networks. "There is a perception in our marketplace that the phone must work, but in the case of a computer-click that fails it is natural to simply try again with no questions asked. That perception is also generational. The younger generation don't see this differential in service requirements and there is a danger that we could get side-swiped by someone coming along with a different way of doing things. There are plenty of people asking for 3G, for example. It's not going to be about five-nines reliability, it will be about ease of use and the application, and because it's hosted users will just want an interface. This is a totally different perception."

Changes in the perception of what constitutes good service is a sure sign that the Internet age is advancing in leaps and bounds but for those beyond the fringes of coverage ubiquitous superfast connectivity will remain a pipe dream. "The connectivity is so poor in most rural areas, and the response and lead times in providing services are such that the tin versus hosted argument in the countryside is for the most part irrelevant," stated Giles Ecclestone, Sales Director, Ocean Telecom. "We can't cost-effectively deliver hosted in some areas. It's got to be about the service and what the customer wants to achieve with their business. Small businesses generally get a better deal with CPE if they are under served by poor connectivity. People will still want tin, although enquiries about hosted have risen this year. The key aspect is how we support the network, and the tricky bit is making it work properly."

The rise of hosted is blatant and Michael Thornton, Sales and Marketing Director, Frontier Voice and Data, believes that the progressive move towards bigger and more reliable networks will open the hosted floodgates. "Every product we sell is predicated by the fact that we need a good network service," said Thornton. "In hosted telephony we've gone from one per cent to 15 per cent of revenue in 20 months. Prior to this growth period we were stuck at one per cent because of poor networks. People ask for assurances and guarantees and you have to deliver that. The product to deliver hosted is here now and the demand will get massive. Look at the adoption of video: Not so long ago you needed a costly camera, but now a device is all that's required. The adoption rate is high and it will be the same with hosted telephony."

A sign of this technological advance can be clearly seen among the generation leaving school and university who are not interested in fixed line, don't use email, are immersed in the digital age and for them hosted is the only option. According to Rainbow Global's Sales Manager Fred Barton there is an unbreakable link between Generation Y and the future uptake of cloud models. "Graduates coming into companies expect services like FaceTime," said Barton. "We have seen a big shift to hosted telephony. Voice is now a service. At one time we sold many PBXs, now it's just four or five systems a month but we're doing 200 seats a month on hosted. The connectivity is better, the pricing has come down, the porting agreements are better, SIP is improving and the engineering is much easier. You don't need to ask about hosted now, customers know about it and it's exciting to sell."

There is a lot more to be said on the future of networks. They do, after all, provide the ability to harness data for detailed research and analysis. The exploitation of Big Data to gain new insights is where the network is heading, and Harvey is already engaged in putting the power of hybrid networks into the hands of customers who want to understand data and use it to make a difference. "We are starting to fill in networks with Wi-Fi, most notably selling to marketing analysts who, for example, want to measure footfall, gain an understanding of who's walking past and what that means in terms of marketing the information," he commented. "In such cases the conversation is not about coverage. We talk about what customers want to achieve and how we can help them through networking."

With the market turning on its head it should come as no surprise that customers expect a different conversation with their ICT supplier. "Before the recession IT directors took the purchasing lead, but there has been a big change in who calls the shots around the applications," added Davis. "Now it's more the remit of business analysts, knowledge workers and the CIO - the people who understand value. Once the decision has been made it's the IT director's job to make sure the infrastructure can deliver the solution. There is a change in who you talk to."

If we want to set the networking world to rights we should do it with total commitment and that means all parties in the value chain having a new conversation based on close collaboration and a shared vision. In a move that advances the value of quality relationships BT has set up a new team to drill into the SME and corporate sectors and find ways to better engage with customers. Georgina Williams, General Manager for Cross Product, BT Business, is the woman tasked with plugging the gaps. She commented: "Were focusing on understanding how we can bring products together in a seamless way, with one person to deal with and one bill. This means understanding the pinch points when customers buy multiple products. They expect a better price, a better service and a SLA that covers everything."

Williams' extended role testifies to the fact that our networked future needs more than just talk. It is right to debate the issues, but a deep commitment is required if we are to strive towards the goal of connected digital ubiquity, pointed out Martin Clarke General Manager, BT Business Partner Sales. He said BT's strategy will ensure that we are not lost in a morass of disconnectedness, highlighting hybrid networks as the tour de force. "The work we've done with our mobile strategy is a sign of our strategic vision around a combination of fixed terrestrial networks with 4G and Wi-Fi services seamlessly integrated for voice and data," he stated. "It's about hybrid networks. This is where BT's investment will be in the core network."

The future of networking will draw on the best of ingenuity and innovation in the channel and will show a wide divergence of options brought together into a single networked solution, and the ability to disentangle the impact on customers will be the measure of resellers, according to Steve Rathborne, Field Sales Director for UK SME, BT Business. "Hybrid networking is a double edged sword," he said. "It means greater complexity but there is a real demand from customers for trusted advice from their partners. It's important we don't lose sight of the crucial role of resellers in the success of networking today and in the future."

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JMC IT is set to host one of the UK's largest IT business events at Manchester Airport's Concorde Conference Centre on 11th November.
 
The IT Strategy Briefing 2014 (ITSB14) will see Salford-based JMC joined by Microsoft in presenting the latest technologies and applications to business people from across the region.

Over 300 attendees have registered to attend from national organisations and suppliers including Microsoft, Dell, Citrix and Symantec will be exhibiting.
 
Taking place beneath the wings of the iconic Concorde aircraft, the event will also showcase JMC's 'Re-engineering IT to empower people and business' vision and feature a demonstration of Microsoft's Azure cloud platform.
 
JMC's MD Andrew Burgess said: "We want to show business leaders how innovation through IT can bring about massive cost reductions and enhanced profitability for businesses - especially through off-premise cloud solutions that reduce capital expenditure.

"ITSB14 will be a fantastic opportunity to make connections and gain such insights from top industry thought leaders."
 
ITSB14 will take place between 8:30am-2:00pm on Tuesday 11th November.