Channel Telecom's push into the SME cloud market has been impressive but its advances to date are just the beginning of a revolution in comms, claims Product Manager Tim Nelson.
Smaller firms wanting big company features without the sizeable upfront costs are proving to be a significant driver for hosted telephony in the sub-30 employee sector, not to mention the growing demand among bigger organisations with mobility and home working strategies and multiple sites to manage, creating another opportunity for resellers to capitalise on hosted VoIP. Start-up SMEs also benefit from highly scalable hosted solutions, especially if they have ambitious plans for expansion. "With hosted there is no need for customers to make large upfront capital investments into the phone infrastructure," said Nelson. "The system can grow with the business as it expands. And if the company changes sites there's no obstacle to keeping the same phone numbers. Expanding through acquisition is also straightforward as hosted can be delivered to everyone in the acquired company."
Stark evidence of the sea-change in attitudes towards hosted is revealed in Channel Telecom's order book. At the time of writing Nelson had just got the green light on a SME hosted solution following a sales cycle of only 50 minutes. On the face of things this seems too simple, but, noted Nelson, it's also easy for non-experts to migrate a customer with legacy equipment to the cloud. "Hosted telephony solutions are plug-and-play and can be implemented by any layperson," he commented.
Nelson's optimistic view of the hosted market leads him to believe that the era of CPE is over. "Convergence is now a reality and not a prophecy and it's all moving quickly into the cloud," he stated. "We are doing at least five times as much hosted business compared to two years ago, and we are successfully selling into larger organisations too. Voice is just another app running on the data pipe. Every time we deliver a data circuit now it's the additional services that provide the extra added value, generating profit month after month for our partners. We now sell far more SIP trunks than ISDN30 circuits and believe ISDN telephony will retain only a small market share by the end of the next decade."
According to Nelson, as the market develops it is inevitable that businesses will move to hosted. "Big players like Microsoft offer products such as Lync and Office 365 which have hosted telephony functionality built into them," he explained. "For the channel, hosted VoIP is a great way to retain customers, keeping them sticky by future proofing their investment. This means that end users will continue to use their hosted solution for years, creating a reliable monthly revenue stream for the reseller. This is surely more profitable than a one-off PBX sale, but many resellers haven't yet got into this way of thinking."
Perceptions about the commercial model are said to be a barrier to many resellers introducing a hosted component to their product portfolio, but Nelson confirmed that margins for hosted telephony are significant in terms of call charges and licences with greater scope for profit when providing extra features and SLAs. "For customers, hosted telephony as a cloud-based service is provided on a monthly licence basis, making it a fully tax deductible service charge, unlike capital expenditure which is only partially tax allowable," Nelson explained. "Hosted telephony also requires minimal capex outlay for hardware such as handsets and routers. When the customer moves premises they just reconnect at the new site without any cost for engineering support or other delay. Hosted telephony also makes it easy for customers to port numbers and to use virtual numbers."
Such is the trend towards the cloud that Nelson has witnessed more and more resellers turning to Channel Telecom's hosted VoIP proposition. But to say that some are being dragged into the cloud kicking and screaming would be to overstate the case, however a number of resellers are being pushed against their will into hosted by customer demand. "Data savvy and IT resellers are leading the way," added Nelson.
Resellers who are advancing beyond the contemplation phase of cloud adoption towards the action phase should partner with a hosted telephony provider that offers a bundled solution which includes hardware, licences, data lines and calls, advised Nelson. "Some providers insist on this approach and for a good reason," he affirmed. "It is, after all, easier to manage an end-to-end solution if you control every element of it. This can also benefit end users by providing them with a simple package and monthly bill with no additional costs."
However, noted Nelson, in many situations a customer might not be willing or contractually able to switch from their existing ISP when they introduce hosted telephony. "Some hosted telephony providers will either offer all or nothing," he added. "But companies such as Channel Telecom prefer to provide a total hosted service package without restricting partners. We will provide just the hosted telephony service if that's required.
"Naturally, there's a balancing act and if the underlying data connection is poor it's unlikely the hosted telephony service will work as intended, which will inevitably lead to a dissatisfied customer. Either way we believe that it's important for the partner to have that choice, and at Channel Telecom we can also advise, based on our experience, on which ISPs are likely to provide a service that will perform well enough to allow hosted telephony to work well."•