Simwood has 'grown-up' says Managing Director Simon Woodhead who lets us know what the company stands for as a channel champion in the making.
For Woodhead to put the channel top of the agenda is a sure-fire winner. Rarely has an evolving channel strategy been so wrapped in determination, and on the topic of future developments and Simwood's role in the channel he is emphatically to the point. "Restructure, acquisition, and all that goes with it including rebranding and integration," he stated. "We're 18 this year so it's time to grow up and jump-start our channel proposition."
As of 2014 Simwood came under a new planning regime. Its purpose is simple - to restructure as Simwood Group PLC, focus on the channel, go big on mobile, and just as big on product diversity, innovation and growth. This, believes Woodhead, will release the company's full potential. "We are developing channel focused functions and processes and will be making acquisitions to accelerate that strategy," he said. "We own our platform and supply chain and will extend that tangibility down into an authentic but innovative channel offering. Watch this space."
The first acquisition will give the company a platform to offer hosted telephony to the channel and an outlet for other products currently offered only through wholesale. Referring to the upcoming mobile component Woodhead says nothing like it has been seen before. "Mobile is a big focus for us and we will launch in a few months," he commented. "We have control of our own mobile core and have moved Business Logic to our own stack. That means we can offer wholesale customers and the channel mobile in a way that has not been done before."
How? By divorcing the handset from the number and the network to enable true convergence. "We, and in turn our customers, control the entire experience," added Woodhead. "Customers can have mobiles without numbers as PBX extensions, multiple mobile numbers routing to the same handset, or one mobile number to many handsets - to give just a few examples. They can also inject premium functionality such as call recording into the call flow because we give them total control."
Resellers will respond enthusiastically to clear leadership from their suppliers and if they are given what they want all the better. Woodhead knows what they want: "It is critical for us and key for the market that everyone adds value," he commented. "Value add propositions in mobile are virtually impossible for anyone other than the big MNOs. With us resellers become MVNOs in a couple of API calls without the nonsense and expense they'd face trying to do it through other routes. This is big and exciting."
Woodhead's future outlook on mobile contrasts with his view on fixed-mobile convergence which he considers to be in the same place as fixed-line pre-deregulation. "It's not enough to be able to bill somebody's mobile use along with their fixed line," he stated. "End users want integration and our new platform is a big step towards that. Yet the market remains protected not least by Ofcom which makes it almost impossible to innovate in the mobile space by withholding the necessary numbering resources."
Rather than tear up long-held plans around wholesale, Woodhead has marked out room for strategic manoeuvre. This, he says, is an evolution of the business that brings great potential. "Our wholesale business is growing exponentially but it will be circa 10 per cent of the whole in five years time," he explained. "That 10 per cent will be massively bigger than it is today assuming we get that far independently. We've had two approaches to sell in the last six months and I expect more when our mobile product is out there. We're absolutely not looking to exit, but if we could put our team and network behind a bigger sales function we'd be mad not to."
Simwood's stock-in-trade customers to date are by definition technical - ISPs and network operators wanting to add voice to their portfolio, and other specialist operators such over-the-top app developers. The firm's biggest account is BT, but among other customers Simwood counts two MNOs, the world's largest fax-to-email provider and circa 660 other communications providers of all sizes. "We supply a best-of-breed product to a niche of customers who themselves are operating in a niche," added Woodhead. "Our customers can build a SIP stack from scratch but in many cases won't have heard of WLR nor see the relevance of it. They, and us, are already in the future and we need to deliver some of that innovation to the channel. In our opinion the channel is starved of innovation."
Woodhead's decision to bring innovation into the mainstream of the market by reaching out to the channel may rank as the company's smartest move, but its solid foundations cannot be ignored. "We've always made a profit and our wholly owned architecture has been almost entirely self-funded to the extent we're virtually debt free and I still own most of the business," he noted.
"In revenue terms 2015 will see us top £2.5 million. That's small for this industry but it is important to appreciate we're purely wholesale at present so considering margins for our wholesale customer and their channel partners, that translates into end user billings of circa £40 million. The most interesting year for us will be 2016 when we see mobile gain traction."
The industry seems gripped by fixed-mobile convergence as a category similar to nirvana, but it is more than solely billing fixed, mobile and connectivity on one bill, reaffirmed Woodhead. "It should be about making them work together," he commented. "For example, if customers had true voice mobility with their office extension on their mobile, their home number in the car, their on-call pager to their house, and billing extended to family bundles that over time make the Internet of Things a commercial reality, then we'd really be in an exciting place. There are technical solutions out there, but arguably they're far from production ready and not in the channel in a palatable form. So we built a reliable solution that will be available to the channel."
Rewind the clock and Woodhead's interest in technology first showed itself while at primary school, but the headmaster made a miscalculation of titanic proportions when he judged that Woodhead lacked the aptitude for such a pursuit. He has remained disrespectful of authority ever since, with a no-nonsense irreverent vigour that keeps the likes of Ofcom in his sights.
Woodhead's uncle came to the rescue. He too was a teacher with access to computers and tutored the budding technology entrepreneur at weekends. Woodhead also grew up in a commercial environment, his parents being industrial launderers. This experience instilled a strong work ethic and gave him a firm grasp on book keeping while still a teenager.
"I shunned university but managed to get into the graduate selection for a wealth management company that is now part of Deutsche Bank," recalled Woodhead. "I came top in the aptitude tests so they took me on as a graduate trainee anyway. I managed £40 million by the age of 21, but IT kept finding me. The big legacy systems and network fascinated me so I was pulled away from fund management into technological roles."
In the mid-90s Simwood's Chairman Grahame Davies co-founded Demon Internet and made the Internet accessible to all, including Woodhead. By then he'd been headhunted by a company that later became known as Barclays Wealth. "I was interested in the convergence of Internet and mobile and developed eSMS, which at the time was the world's first global gateway between the two," said Woodhead. "We pioneered bulk SMS delivery but our main product was two-way email to mobile phones using SMS as the transport. We also enabled SMS between networks."
Woodhead quit his finance job to concentrate on Simwood and other start-ups. "I refocused the business on VoIP in 2005 and Simwood as you see it today was born," he commented. "We spent five years replacing our supply chain to own our own national IP network and SS7 voice interconnects. Joining the London Internet Exchange was a key milestone, not because it was any technical or commercial achievement but because it took us, me especially, out of our petri dish into a world of people like us."
With the sublime concentration of a scientist Woodhead has redrawn Simwood's strategic lines in favour of a pledge to 'be more channel friendly', but the company's pedigree will be strongly felt for some time to come. "We're an interface between old and new telephony," he added. "We provide UK numbering and termination, all orchestrated through an innovative API. Our USP is complete vertical ownership from the IP network to the VoIP stack and the entire business process in between. We resell nothing and have complete control and agility.
"We didn't retrofit IP and VoIP to a legacy network. We had them so our integration has been backwards, adding more and more legacy capability behind contemporary architecture as we climbed the food chain and needed them. We've done things differently to maximise uptime, flexibility and economics for our customers. Our platform scales and is already handling 300,000 operations per second."
Woodhead's blogs (http://blog.simwood.com) enjoy extraordinary intellectual sway and, for example, he speaks on VoIP fraud around the world citing his research and making data available to all. "We have hundreds of checks and limits that are applied for every call, and that customers can apply to individual trunks," he said. "Crucially, they're all real-time. A customer can use our API or portal to see the calls in progress on their account right now. Should a customer fall victim - and generally those who apply the controls we offer tend not to - then all of these mitigate and contain an attack. We provide real-time alerts by SMS and masses of features network side. That is the authentic thing to do."
The industry will learn nothing by ignoring visionary tacticians such as Woodhead. His insights provide a signpost to the future and, like his viewpoints, defy all challenges, especially when striking a blow for equality. "We're open with our thinking and view of the world," he said. "We've been vocal on some of the backward steps the industry has taken, such as the Narrowband Review, a punch that us and other non-incumbents have had to take. Our ethos is about getting the best technology and innovation into the hands of end users through a fair and transparent market, neither of which we have."