Are dealers ready to unify comms?

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As Vodafone puts the weight of its brand behind unified comms and vets the channel for suitable go-to-market agents, the promise of convergence looks set to be made real. But are dealers ready? We poll the industry

The convergence of technology and also of sales channels has been cited for some time as the natural destination for this market’s chief protagonists.

For more than three years, it has been touted as a kind of promised land for the industry, sometimes in hope as much as real conviction, as profits for traditional voice and box sales have fallen steadily.

Early 2007 saw the introduction of the first-generation iPhone, a device that has led with subsequent iterations and rival devices decisively to acceptance of the mobile internet within the consumer market.

US distributor Brightstar entered a fast-consolidating European market the same year, via a joint venture with IT firm Tech Data, and in the UK via its formidable local subsidiary Computer 2000. The sense was mobile phones were about to get smart and computers were to get more portable, to the point delivery channels blurred.

A year later, Brightpoint, another US behemoth, purchased UK distributor specialist Hugh Symons Telecom (HST), completing its continental advance following takeover of Danish firm Dangaard.

For Brightpoint, HST was a respected niche operative that could usefully run this complementary supply of smartphones and IT solutions into business channels.

The same year, airtime distributor Avenir Telecom set up trading agreements with IT firms Westcoast and SCC.

Fone Logistics and MoCo were branched out into fixed line, at least. Operators O2 and T-Mobile had agreed terms with Westcoast and Northamber, respectively. Service provider Timico had reinvented itself.

Azzurri was buying up complementary business concerns at an astonishing rate. Opal Telecom and all its satellite brands were sniffing around the mobile space.

But, by 2008/9, little had come of this work. The iPhone was a consumer breakthrough. Brightstar was trading boxes into supermarkets, for the most part. Brightpoint was getting success, but because it was pitching to vertical markets in low volumes. Avenir’s distribution arrangements went nowhere. The rest was essentially exploratory in its nature.

That appears to have changed. O2’s Joined Up package, combined fixed line and mobile, and Vodafone’s One/OneNet solutions are very presentable packages for businesses.

The market appears well set too – the iPhone, and the new-breed handsets it has bequeathed, has raised expectations in the industry itself andamong end users.

But are dealers ready, now? This maligned sector has been through the mill in all of this transition, promise and uncertainty. Has it emerged equipped to sell more than boxes with discounted airtime? Can it really add value?

Vodafone evidently thinks it can, or at least is determined to drag a part of it into this new sales era. But, market opinion has it this final re-boot of the sales channel will see a fallout too.

Bob Sweetlove (pictured centre)
HSC business manager

“There’s no massive panic. Dealers have to be ready to react, of course, but let’s take dealers down the road when they are ready; rather than scaring them into action. There is no ‘big bang’; these things evolve.

“The more things like tablet computers come to market, and the more people realise they don’t require a whole in-house phone system necessarily, the more the market will move towards it. These cloud services will get traction, and dealers will have that conversation then. But it is important, now, they do more than just offer to save customers money, and start to have conversations around what customers’ broader needs are, and how they want their staff to be more flexible.

“Knowledge is key. To sell a hosted solution from Microsoft, say, you need a deep knowledge of Exchange – and a company’s IT and landline systems to move an existing Exchange server to a web one. If we want to drag dealers along that path, they have to bring those skills into their businesses. You’ve got to be more aware of customers’ set-ups to sell these solutions because each customer is unique.

“Businesses are, by and large, still talking seperately about mobile, fixed line and IT supply, and each of those channels will continue to stand alone for a while. Dealers don’t need to panic about rushing to sell these products. They have their core business and they can build their buisnesses with ongoing revenue share, and they are starting to see there are more creative and useful ways to tap into customers’ wallets as well.”

Marcus Richardson
Pure managing director

“There is a land-grab for revenue; it is not just about customer headcount anymore. The way to achieve more revenue is through sale of additional products. If you invest in infrastructure and look for quality business, then the networks should reward you accordingly. Those conversations are taking place; it’s the natural evolution of a consolidating market.

“There has to be some differentiation between those that are making the transition, and those that are not. I don’t want to be in the same basket as dealers who have failed to build for the future, and can’t deliver the brand values of the network.
“But you can’t do everything, right? You either sell a lot of a little or little of a lot, and I would rather sell a lot of a little because you can do so quicker and your cost is less because you are more efficient and dynamic.

“Fixed line, IT and Microsoft products are coming down the pipe from Vodafone. So these will be essential. But BlackBerry is core too. Three of the top five ARPU-generating handsets are from RIM. If we all concentrate on getting BlackBerry penetration up to 50 or 60 per cent, then the place would be richer. Microsoft products will come to this market, but there is still huge margin left in mobile and fixed products, in BlackBerry and OneNet, say. It’s two years away.”

Maggie Kennedy
O2 head of partners

“With Joined Up, we felt it was important to start with a proposition customers and partners could understand quickly. Some are already familiar with fixed, but this is new to many so it was important to build confidence across the channel.

“We have listened and created propositions that work for the channel. It has meant partners and customers have been able to ‘join it up’ and have one conversation about communication needs.

“We’ve also found in our direct teams that conversion has almost doubled when selling fixed and mobile together as the joint proposition is much more compelling – it puts everything on one bill for customers and offers incremental revenue streams to partners. Fixed is part of our programme metrics and is integral to partners being seen as trusted advisors to our customers.”

David Plumb
O2 head of SME sales

“Where a customer is able to buy mobile and fixed at the same time, so where their contracts are available at the same time, then we are twice as successful at selling to the customer.  Our win rate more than doubles if we can sell both because the customer loves everything on a single bill – plus they get to call O2 mobiles for free from landlines.”

Simon Howitt
Outsourcery channel business unit director

“Dealers have to get themselves skilled and comfortable enough to sell unified comms. It requires a change in mindset. They have got to broaden their thinking and evolve fast. Customers want communications to be more efficient and cost-effective. If dealers are not anticipating those things, and not satisfying those requirements, they will be left in the dark.

“The key for dealers is they have a reliable partner that has the expertise to educate them – either they work with a service provider, or else they work closely with an IT firm. But those conversations about cross-channel partnerships happened a couple of years ago, and don’t appear to have developed. Which means they have either failed, or else these firms are just keeping quiet about their successes.

“This isn’t about solution selling necessarily – it’s about the questions dealers ask, and how they interpret the answers they receive and base their proposition around that. It’s about being able to talk confidently in front of a customer of how business operations are changing and how communications can make a big impact.

“A battle between mobile, fixed and IT channels could yet emerge. The winner will combine the expertise from each. Mobile is a very important part of the final proposition, but it’s not the end-all. These other elements are crucial also. The advantage will be in the ability to mobilise software solutions. Dealers should already be unifying communications because it’s a long journey ahead.”

Ian Robinson
MoCo managing director

“Survival will come down to how close you are to the customer, and how well you understand their business. This conflict between the mobile, fixed line and IT channels will be resolved there. This channel is well positioned because of the mobility requirements in unified comms.

“But, right now, I would say only perhaps 20 per cent of dealers are actively unifying communications for customers. The proportion is growing, but there is an associated learning curve still. It is a different set of problems, which requires a different approach and a different understanding.

“This talk of the consultative sale is important – because dealers must consider a customer’s problems with communications and, from that point, seek an appropriate solution. And so dealers should have an evolving knowledge of products and services that are available.

“Dealers must adjust anyway – and move away from pitching on cost. Dealers who can be consultants, available to discuss business issues and suggest new ways, will succeed.  At the same time, they can still play roles as generalists, as well as specialists in the unified comms market. So long as they can approach businesses with that kind of broad mindset, then they can refer customers to specialists where required.

“There is mileage and revenue in partnerships as well; dealers do not always have to provide everything themselves.”

Chris Earle
Unicom operations director

“For many years the trend in the telecoms industry has been to force upon customers the products it wishes them to take. Often the reasons for this relate more to increasing margins and protecting churn, rather than a real evaluation of the customers’ requirements.  BT’s Fusion and many VoIP products are good examples of this.

“There are a number of problems with the current range of products that unify fixed lines and mobiles.  Small businesses want calls to the customers’ premises to be taken at the premises.  For credibility and identification purposes, small businesses want an 01 geographical number for their advertising and marketing, rather than a mobile number.

“Customers are concerned about the increased costs of calling their business, whether those costs are paid by the caller or the small business.

“Small businesses do not wish to change their main business telephone number, which they may have had for many years.

“Finally, small businesses have a general dislike of new technology, and prefer to keep things simple. For these reasons, we think it is too early to offer a unified product.The offerings need to become more established, cost effective, and problem free. We do not wish to be the pioneers of new and innovative products, and we do not wish to take on the role of educating customers as to the benefits of these new products.

“We will wait until somebody else has done this, and then get involved when demand is established.”

Mark Gordon
Evolve Telecom managing director

“Unified comms hasn’t taken off as quickly as people expected because broadband connectivity hasn’t been good enough to allow business customers to invest. That’s getting better at the same time that mobile operators are starting to get their acts together.

“Dealers have to have the right people in place who know how to sell these solutions. Traditional mobile salesmen may struggle to get their expertise to the right level to succeed. Dealers need to recruit staff with the specialised skills, able to cross-sell unified comms products to customers.

“Over the next three years, unified comms is going to be crucial. And mobile will be the driving force behind its development.”

Paul Hooper
Uplands managing director

“To take it seriously, you have to change your business. If you get fixed line wrong, you’re going to cause headaches. There are dealers with a little knowledge of fixed line going through an implementation process they don’t understand, and leaving customers short. And IT knowledge is the light running through it so if you get that wrong, it’s going to fall over. And you need the know-how to get it up and running again.

“But I don’t believe that if you’re not unifying comms, you’ll get left behind. There is a place for dealers selling BlackBerrys with a reasonable base. If your model works, then you might not need to worry. But if you want to grow, then it’s urgent for most.”

Rob Shardlow
Vodafone SME director

“The majority of our partners are really excited about the future of unified comms and the sales and revenue opportunities it presents them. The level of interest in OneNet is very positive  and partners understand the commitment and level of investments needed to make it successful.

“But unified comms isn’t the answer for every partner – it is an important  and exciting  step change in the channel. Our  partners will be essential to making it work.

“Most of our channel partners who are ambitious and want to grow their business are very aware of the need to build on voice revenues. Unified comms helps them satisfy their increasingly broad customer needs while building increased commercial returns. A growing product set, with solid plans in place to make them happen is the only option for partners who wish to flourish.

“Are dealers equipped to enter in to discussions with businesses to discuss services such as IT, fixed line and data themselves, moving away from the traditional handset and network sale? Some are and some aren’t.

“What’s important is our partners realise there is a difference in skills and capabilities and if they don’t have what is required, they start to invest in that now.

“Partners are beginning to appreciate the time, cost and management commitment required to successfully make the transition. We are committed to working closely with them.

“Unified comms represents a new world of opportunity and increased integration in which all partners – fixed or mobile – can play an increased role in the value chain.

“Both ‘ends of the spectrum’ will face similar challenges in evolving their respective businesses to allow them to succeed in the centre ground. There will be winners and losers – those that focus on customer needs and organisational efficiency will win through.”

Nigel Garnham
Mainline business development director

“Some dealers are more adept at doing these things than others. The dealers that want sticky propositions for customers will be most interested because unified comms generally provides opportunities around not only mobile, but fixed line, collaboration and conferencing, right down to doing desktop sharing activities such as Hosted Exchange.

“Dealers are looking to differentiate themselves and unified comms allows them to have closer relations with customers and offer value-added propositions in the future rather than just doing a one-off deal around mobile. Customers would expect a high degree of first line support, and dealers will not want to refer back to their supplier each time. Some dealers will find it straightforward to sell, particularly those who offer a wider systems integration piece. Smaller dealers would have to ‘come up the curve’ and we would encourage them with product collateral and training. Dealers need to take these services very seriously.

“The fixed operators are doing quite a lot to position themselves against the mobile operators. BT, say, sees mobile as a real threat. The difficulty is it’s much easier for a mobile operator to do something that looks like fixed than it is for a fixed operator to do something that looks like mobile.

“If you look at the traction around BlackBerry and iPhone products, then it is converging around mobile. People want to have the same themes and interfaces on their desktop at home as on their mobile. That joined up experience shows a strong impetus towards unified comms.”

Andy Tow
Avenir Telecom managing director

“All SMEs want is to be able to focus on their core business, and to be helped to do so if possible by telecoms providers. The easier dealers can make their clients’ jobs, of working with their customers, the more likely they are to return to them. The fact convergence of technology brings all the strands of telecoms together and simplifies things for customers means dealers can be a single point of contact for them, which adds huge advantages on both sides.

“There are huge opportunities for dealers in the unified comms market – to expand business, develop new contacts and secure additional revenue streams. The dealer market has benefitted from certain operator products, which have made it easy for them to bundle together mobile and fixed line services. And comms resellers are starting to come to us to sell mobile, so there is crossover of channels already.

“There is a worry that without the right suppliers, knowledge and training, the telecoms channel will end up as a jack-of-all-trades, which is where the distributor comes in. But a joined up approach will help businesses excel, especially given the opportunity technology affords and the need for better working in the present economic climate.”

Richard Hunt
21C Telecom managing director

“Dealers are not in a position to unify communications. Most don’t have the necessary expertise – this isn’t selling a mobile phone, it’s considering a whole range of other factors. Mobile is a price-driven commodity in the main. Unified comms represents a solution sale; you have to understand what the business you’re selling to is looking to achieve and where it is failing. It might have 10 receptionists, and the solution you put in allows it to cut back to three.

“So there is a much deeper understanding of the technology and the business that is required. The value for customers from these types of solutions is in better working practice and compliance, and reduced overheads. But it’s not a box solution; it has to be bespoke.

“Trying to convert a mobile-centric dealer into a unified comms reseller is impossible. It requires a blank piece of paper. There has to be investment in training and infrastructure. There has to be enhanced understanding of technology and solutions. And there has to be closer relations with customers.

“This big and necessary change in attitude worries me. Dealers have had it good and haven’t tended to invest to hit volume targets. But all channels face barriers: the IT market has the capability, but I’m not sure the way it conducts business by charging for services on an hourly basis best suits this new space, and the fixed line side struggles with the mobile element, although it has had the systems in place for a while.

“It is a cultural thing, and, compared with parallel channels, the dealer market should win because it is most used to change. And Vodafone and O2 are huge brands to lead the charge.”

John Doughty (pictured right)
Micro-P general manager of mobile

“Is the dealer channel ready to unify communications? Yes, absolutely. But the main driver for unified comms is not necessarily the market sector the dealer sits within; what’s more important is the mindset of the reseller, and its commitment to expand beyond its legacy business.

“There are strong reseller businesses in all the channels expanding into new fields. You also find some concentrating on business they know.

“One of our selling points is the fact we have all the knowledge, from all the sectors, in one place, so dealers don’t have to invest necessarily until they have got some traction, and can then develop expertise as they go.

“But it cannot be ignored and the technology itself is driving towards a more integrated solution.

“The networks’ offerings are a great introduction to unified comms, and allow the mobile sector a platform to launch, and also a new conversational tool for fixed line and IT resellers. They perhaps require a stronger focus and push, still, and a way to ensure they do not detract from dealers’ existing propositions.”

Jason Ellis
Everything Everywhere head of data access

“Today, Orange dealers are mobile-focused. But the channel is readying itself for new multi-play bundles and the more complex telecoms needs that fixed line represents. In doing so, dealers will be able to add value by supporting more than just a mobile proposition.

“Steps are being taken, also, to see also how mobile can become a part of the fixed line and IT reseller channels, and a part of a broader proposition. But all of this largely seems exploratory at the moment as dealers look to assess the needs of their customers.

“Mobile communications continues to take share from rival channels as the  natural migration from fixed to mobile continues. However, in my opinion, in order to meet and deliver on all possible business communications needs, there has to be a balance between both mobile and traditional IT and fixed line players.

“Orange will continue to look at its channel partners in order to match the needs of customers and to make this proposition as successful as possible. It will mean stepping up some channel partners’ capabilities.”

Scott Harrhy
Totel sales director

“You have to gear yourself up to be in a position to sell unified comms, and support it. OneNet requires quite a lot of investment from the dealer channel – in terms of infrastructure and personnel.

“It is not something you sell in a box; it has to be a planned solution for the customer. Vodafone is incredibly serious about this. You have to be ready and prepared to sell convergence products or you won’t survive.

“This is the way the industry is going, and the benefit is it will allow us to provide a solution that ties the customer down.”

Huw Stiley (pictured left)
The Word managing director

“Dealers need to decide if they have the appetite and motivation for it. If they don’t they will get left behind.

“It’s no longer a commodity sale; it’s a solution sale where you need to demonstrate capability – not just understanding of technology, but business planning and project management.

“You need to be well-funded. You need broader knowledge. You need to develop and recruit staff. The winners will be those who invest. No single channel will win; if you are aligned to an operator with a compelling proposition, you start in a great position.”

Dave McGinn
Anglia Telecom managing director

“Go back five years ago and look at whether dealers were in a position to sell mobile email solutions. They weren’t. We are in the same position now with unified comms. But they got there, then, and will do so now.

“Unified comms is a solution sale. It is about understanding customers future communications requirements as well, and represents a richer sale for those who understand it.

“But dealers do not necessarily have to understand every part of the proposition as there are specialists in the background who can fill in. They just have to know where to go to find answers.

“One channel won’t win. There will be organisations that do very well out of it and others will catch up. Mobile seems to be leading the way – if you look at operating platforms in the market, it’s mobile-led. By January, more dealers will be involved.  Vodafone’s OneNet solution will make a big impact.

“Some dealers will be happy to sell mobile only, but those who are ready to go deeper with customers and show the efficiency gains they can achieve with these types of solutions will be in a strong position.”

James Phipps
Excalibur managing director

“Do I think the whole dealer channel is ready for unified comms? No. Right now, probably only 10 per cent of the channel is in a position to attack this market. And which dealers will actually see it through will be clearer in the coming months. The difference will be whether they can back up their talk with action.

“You have to invest in your business because any part of it that relies on a party you can’t control – like an operator or a distributor – is at risk. We are the ones who hold a relationship with the customer, and if something is not right then it reflects on us.

“IT and fixed line resellers have struggled to get in to the mobile world. Yes, they can have the conversation with the right person within business and, yes, to an extent, mobile has been an irritant sale for some.

“But conversations around a customer’s mobile estate have become more sophisticated and technical and increasingly IT directors are taking charge of the mobile account too, so we can have that conversation with them now, about fixed line and IT also. The mobile network and tariff is a secondary conversation.

“The problem for dealers who rely on distributors, say, for knowledge and technical accreditations is they are plainly not as good at these complex unified comms sales as those with Microsoft Gold certification, for example. Why would they be relying on others for that if they were?

“Dealers may be able to survive on selling handsets with data for a bit longer, but there is no longevity in that model. Bigger dealers will become bigger and the smaller ones will vanish. The writing is on the wall.”

Oliver Rowe
Phonebox sales director

“It’s paramount dealers understand the products they have at their disposal because unified comms brings everything together. Dealers will gain higher ARPU and better customer loyalty, and customers will gain cost saving and operational improvements.

“The fixed and IT channels find the mobile element difficult, and will look to us. We will see a lot of mergers, takeovers and partnerships. The elite within the dealer community are being groomed to lead from the front. Dealers should have been getting ready to sell in this space a year ago. If they haven’t started already they will be left behind.

“Early on, it will depend on the return on investment and whether it’s viable to buy the customer out of their contract – fixed line deals can span five years.

“There is an initial investment to get unified comms solutions running in the first place, so it might not be feasible to buy them out of longterm deals. But it opens the door to much longer term contracts for this market.”

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