Wednesday, 23 December 2009
Sunday, 20 December 2009
As we’re approaching the end of 2009, I wanted to revisit the red hot topic of channel sales performance. This is a topic I covered in July in the whitepaper Unified Communication: Capturing the Growth Wave.
So, the question was, and still is: Are the manufacturing vendors in the Unified Communication (UC) market sufficiently tuned-in to have an affect on the sales performance of their indirect sales channel?
As you know, the assessment back in July was a resounding “No”. The main reason being, that the vendors were not sufficiently engaged at the field level to offer the proactive support the resellers needed. The economic crisis had a strangle hold on the market, which accelerated the market disruption and the vendors were unable to keep up. UC vendors turned inward to sort out their own problems, while their VAR’s were at the epicenter of the economic downturn, experiencing severe problems with shrinking margins, poor cash-flow and limited access to new capital.
So where do we stand now? Well, much has happened in the last 6 months:
- In a market with increased demand for OPEX based solutions, the customer’s focus has shifted away from product features and towards the operational details and proficiency of the solution provider. As such, leading vendors, including Cisco, Avaya, Siemens EC, Mitel and Shoretel have announced new products or changes to existing product roadmaps, which are more aligned with these demands. Examples of these include, focus on software and standards (SIP) based voice applications, focus on data center integration and virtualization for scalable service delivery, and focus on integration with standards based collab and social media services.
- Lots of intense recruitment activity. Vendors have been trying to “steal” resellers away from their competition.
- The customer demand for OPEX based solutions has made cloud-based communication capabilities more viable than ever. As such, there has been an influx of new players coming into the market offering hosted or managed communication services. It’s predominately classic network providers (wireline & wireless) that are moving higher up in the value stack, monetising their assets through more services.
- Several vendors have also been busy re-launching their partner programs. Hopefully with simplicity in mind.
Unfortunately, newly recruited resellers, new products and new or simplified partner programs generally don’t have much affect on the business for existing channel partners. No, in order to improve sales performance of the indirect channel, vendors need to find ways to have meaningful impact on their reseller’s sales capability and loyalty. What has been done there?
Are the vendors actively making progress in:
- Developing and transforming their channel partner’s business, to where the market is today?
- Driving continuous demand for OPEX based UC solutions, for the indirect channel to fulfill?
- Developing new commercial assets and marketing automation tools that drive channel commitment and loyalty?
What do you think, which vendor is winning market share due to effective channel development and demand generation? Please add your comment below as I’m very interested in hearing from you.
Monday, 7 December 2009
In part 3 of the blog series Cloud based communication services (See Part 1 and Part 2) I’m shifting the focus over to the vendors and voice manufacturers. Those of you who have followed Ubiquitous Connections over the last few months know that I firmly believe that the vendor’s position in the value-chain is changing significantly. The premise for my claim is of course that IP telephony and associated voice applications are largely becoming:
- Software and standards based
- Device independent
- Network independent
Furthermore, sales efforts and campaigns during the old CPE days, I mean pre-economic meltdown in 2008, were largely based on feature comparisons of the vendor’s products. In a market with increased demand for OPEX based solutions, the customer’s focus has shifted away from product features and towards the operational details and proficiency of the solution provider. Thus, providers of voice & UC in a service model will advance in the value-chain, while the vendor of discrete products will likely do the opposite. This will have a huge impact on the vendor’s product and channel strategy.
As an example, cloud-based delivery offers the potential of increasing the ratio of customers per physical infrastructure deployment, shielding sales organizations from integration and deployment complexities. Thus there is increased demand on vendors to optimize their products for data center deployments. These developments have disrupted the product strategy and vendors are hurrying to realign and take advantage.
I believe Mitel’s new strategic direction has a lot of merit. Mitel has not only embraced the shift from hardware to software head on, but is also supporting cloud-based delivery by investing heavily in applications and virtualization. Its strategic relationship with VMware enables customers to run Mitel’s voice applications in a virtualized environment, building scalable clouds. With increased focus on data center integration and virtualization, Mitel is driving much of the change and market disruption themselves. If Mitel’s new strategy proves to be a recipe for accelerating growth of cloud-based communication services, its decision to drop its distribution partners in favor of direct reseller relationships may prove to be a hugely important one.
Mitel’s main challenge will continue to be the development and alignment of its indirect sales channel. To support its new strategic direction and drive sales growth, Mitel will need a massive channel overhaul. The current channel simply won’t adapt fast enough. Thus, Mitel needs to augment its channel with new types of channel partners and resellers. What I’m talking about here is for Mitel to forge relationships with key service and infrastructure providers and jointly develop a sales channel for driving demand of their communication services. It also needs to revamp and align its channel program and incentives with its new channel focus. Having said that, they can’t afford to divest or reduce focus on their current channel partners. Mitel is still financially dependent on its traditional resellers, so it will need to tread carefully.
With its new product and channel strategy Mitel is one of the few vendors that has fully embraced its position in the UC value-chain. So is anything missing? Not really. I guess it all comes down to channel execution. But if Mitel can succeed in enabling a new type of sales channel through key service providers, I believe Mitel will gain significant market share in the small and medium sized business market.What other vendors are making the right channel investments and why? I’m very interested in your opinions.
Monday, 23 November 2009
As you know, I have been quite critical about the UC vendor’s Channel Marketing efforts over the last few months. Apparently, I’m not alone… Sam Trendall published the article, Vendors Failing to Equip Resellers in CRN, highlighting some key findings from a channel study conducted by consultancy Demuto:
- Less than one in 10 VARs feel they have a "relevant account plan" with their vendors
- Less than one in 10 claimed vendor marketing material was always suitable for use with clients.
- Two-thirds of VARs claim they have no input into channel strategy.
Although this is very alarming data, the vendor’s have had the criticism coming for a while. During the summer I published the whitepaper, Unified Communication: Capturing the Growth Wave, where I criticized many of the UC vendors for how they managed and supported the channel during the economic downturn. I also came out swinging in the blog post, Who is speaking the language of the customer? Reviewing several of the vendor’s sales collateral or web sites at the time, it was clear that vendors weren’t paying attention to how the market had changed.
In August, I wrote a article about UC vendors needing to recruit and develop new sales channels. Surely, technology disruption and hard economic conditions had a negative impact on the indirect sales channels, yet nothing was really happening.
But there is progress as well... I’m actually seeing more Channel Marketing activity by several of the vendors now than just a couple of months ago. A few of them have launched a new and simplified version of their partner program and there has been a lot of recruitment activity. But, I’m still critical about the resources and efforts dedicated to developing new or key reselling partners. Vendors need to claim ownership for what their markets are and lead their indirect channel to it. The resellers will merely fulfill the demand.
What do you think, is Channel Marketing delivering enough value to the channel?
Sunday, 22 November 2009
Thank you for all your comments and email messages in response to my blog post Cloud Based Communications Services. As a follow up I wanted to elaborate a bit on one service provider (part 2) and one vendor (part 3) I believe are making the right moves in the voice and unified communications market. Of course, the premise for these articles is that the focus on cost control and increased customer demand for OPEX based solution will continue to drive adoption of cloud based communication services.
In a world where communication capabilities are offered as a service, service providers of different types are poised to benefit. I for one think that Vodafone’s entry into Europe’s enterprise communications market is a very interesting and exciting development. Quite frankly, as mobile and IP based communication technology converge, this is a natural yet bold move by Vodafone. In the case of Vodafone, its primary objective is not just to monetize its mobile network infrastructure but to deepen the commercial relationship with the enterprise market. Through its acquisition of Central Telecom, a multi-vendor solution provider and system integration firm, Vodafone will be able to provide customers the full range of unified communication (UC) capabilities, either as a service or as CPE. Its inherit ability to bridge the gap between the mobile and fixed IP networks is yet another differential value proposition. With its recent hosted UC service, Vodafone OneNet, targeted at small and mid-sized business, Vodafone can offer business customers both simplification and cost reduction for their communications needs. Down the line I’m convinced that Vodafone, together a fixed line provider, will be in a position to attract larger enterprise customers with managed UC services as well.
The biggest challenge I see for Vodafone is its ability to develop an attractive channel proposition such that other businesses which can thrive and prosper by selling and enhancing its communication services. Vodafone needs a well functioning eco-system of different types of business partners, such as value added infrastructure and application providers, system integrators, resellers and influencers, to further its business and cover all distribution paths to the customers.
So, is Vodafone going to become a dominate player in the enterprise communication market? I think the word dominance is too strong but they will likely be a contender. With cloud-based delivery gaining momentum, the benefit Vodafone and other service providers have is that they already have much of the costly operational and business support infrastructure in place. So, if cloud model for aggregating, delivering and consuming voice services, voice based applications and infrastructure takes holds, Vodafone has a fair chance at grabbing meaningful market share. However, Vodafone will not be able go it alone. Whether they can build a channel proposition and develop an indirect channel capable of aggregating, influencing and selling, remains a question. But so far, I’m certainly impressed with its strategy.
What do you think... As a consumer focused mobile network carrier, will Vodafone have the "market permission" to deliver a wider range of communication services to the enterprise market?
Tuesday, 10 November 2009
To capitalize on the cloud wave, resellers must master the art of selling capabilities and value as opposed to selling gear and software. Have you heard that before? Of course you have, but a reseller’s ability to fully embody this becomes pivotal when there are choices in delivery models. What I mean here is; as a reseller of unified communication, the whole organization needs to be fully prepared and able to deliver those capabilities as a service OR as premised based equipment and software licenses. This is where complexities set in. Transforming a business model and its organization which is hard-wired to sell customer premised based solutions into a service based business is quite daunting. Every corporate function of the business needs to change and adapt in order to be successful in the cloud.
Mr. Pratt also makes a great point when he says that the hosting and cloud infrastructure companies don’t typically have the customer relationship and unique customer knowledge that the resellers have from years of serving a particular market. As such, the hosting and infrastructure companies are potentially great partners for traditional resellers entering the cloud.
The resellers in the voice and data space have gone through demanding transformations before. However, the business transformation required to adapt to cloud-based delivery will perhaps be their biggest challenge yet.
Are there resellers out there willing to share their experiences or comment on the challenges?
Sunday, 1 November 2009
Monday, 12 October 2009
Autumn greetings to you all! After a very busy start to the fall season, I’m back. The IPExpo 2009 event concluded in
There was definitely a buzz around the infrastructure players promoting cloud computing and capability delivery as a service. My guess is… at this point there are enough major players investing in cloud and SaaS delivery to make this a realistic alternative to premised based software and equipment. Thus, I believe the infrastructure fans and customers were quite pleased with the show.
However, I’m not sure what the spectators of voice and Unified Communication (UC) solutions thought? I for one was quite disappointed with presentations and messaging around the UC vendor’s solutions. The majority of the communications vendors spent their energy explaining and “educating” the audience on what UC is, what the perimeters of UC are, plus highlighting the value of their product features. Except for Mitel, no other vendor tried to leverage the Cloud buzz in the hall or surf on the Cloud wave. It was almost as if the vendors felt they needed to defend their own existence while trying to claim as much of the UC “solution space” as possible… Very frustrating!
Did anyone try to make an operational case for:
- Improved reliability and scalability?
- Improve productivity yet reduce TCO?
- Utility pricing (pay for what you use and when you use it)?
- Minimize or eliminate capital expenditures?
- Open standards for interoperability?
No! In a world of increased pressure to reduce or eliminate capital expenditures, the UC vendors missed a golden opportunity to talk about operational differentiation, key partnerships for delivery options. To my knowledge, Mitel was the only vendor trying to differentiate themselves on anything other than product features. Who cares about product features such as 1-number dialing, unified messaging, fixed to mobile convergence, video and collaboration unless the overall solution delivers meaningful results to customer’s business.
It’s time for the marketing folks to step it up: this is just not good enough. It’s been more than a year since the credit crunch stalled or slowed down the markets, surely the vendors have noticed.
What say you?
Tuesday, 11 August 2009
Key Google Voice features:
- Calls are routed to all my registered phones simultaneously. In other words, layered integration of mobile and fixed line phones
- Text messaging & conference calling feature.
- Inexpensive international calling
- All my voicemails are aggregated at Google Voice. Transcribed voicemails or voicemail notifications are emailed or sms’d to me.
However, it is the flexible service layer of Google Voice handling inbound and outbound calls that is the differentiator. With the ability to port existing mobile number to Google Voice, I can rid myself from long and expensive contractual commitments with other mobile carriers. By loading Google Voice apps onto a smart phone, my outbound calls can be routed through Google Voice with significant cost savings as a result.
I’m sure it will take some time for the market to learn and adopt Google’s new voice proposition, but if successful Google will likely change the game for service providers and mobile carriers.
Question: Does Google Voice give Google an entry point into business communication market? For example, could Google Voice serve as a cost effective mobile integration service to the SMB and enterprise market?
I’m interested in your opinion…
Tuesday, 4 August 2009
After a couple of weeks of holiday and R&R it’s time to get going again. During my time off, in between dips in the ocean and naps in the shade I couldn’t help but ponder how the Unified Communications (UC) and VoIP market is changing. What’s happening? Where is the technology disruption heading? Is the channel capacity of the vendors wearing down? Who are the most suitable channel partners going forward?
One thing for sure, the indirect sales channel for Unified Communication (UC) and VoIP is a lot more diverse today than just 12-18 months ago. Today, Service Providers, IT consulting firms, System Integrators, technology VAR’s, vertical software & ISV’s, cloud/Saas providers etc. are all part of the collective sales channel for UC and VoIP. But, they are all selling and delivering customer value differently, aren’t they.
What the UC and VoIP vendors have been slow at recognizing is that the classic channels for “moving” product to the end customers are eroding or diverging. The vendor contest for market leadership will not be decided on technology alone but rather on who can develop the most comprehensive distribution paths for their solutions to the end customer. It’s all about reach, far and deep. Geographic coverage used to be the critical dimension for reach, but that is far from sufficient today. Delivery models, influence, capabilities and commitment are dimensions that also need to be considered. The vendors that can develop the most comprehensive and low resistant distribution paths to the end customers will benefit massively. You would think that UC and VoIP vendors already have a functioning model for selling through service providers, system integrators or vertical consulting firms. Not so, think again. There is still not enough focus or flexibility in most vendors operations and underlying infrastructure to accommodate different sales models and delivery models.
Heather Margolis at Channel Maven Consulting wrote a great article on the “New Breed of VAR” as an enabler of new routes to the customer. Ms. Margolis is spot on in her assessment. The technology disruption along with new delivery models (cloud or as managed service) and more sophisticated financing options have opened the market for a new breed of VARs that perhaps were not selling UC or VoIP before. However, recruiting this breed of VARs and enabling them to sell UC value in what ever way that suits them, with an attractive commercial proposition, is the responsibility of the vendor organization. This is an area where vendors are struggling. What new channels have Cisco, Microsoft, Avaya, Polycom, Shoretel or Siemens EC enabled today?
What do you think?
Wednesday, 15 July 2009
First, I want to give a shout-out to all of you who sent me such positive feedback on the whitepaper Unified Communications – Capturing the Growth Wave. I truly appreciate your comments and will refer to them in future posts.
I’d like to continue on the topic of improving channel sales performance. As an industry poised for significant growth, the Unified Communications (UC) market is getting quite crowded. More competing vendors are coming onto the UC stage bringing disruptive innovation and new business models, all claiming market leadership. As a result, the resellers of UC aka VAR’s will naturally align with vendors and delivery partners that can lead them to sustained sales success with the least amount of resistance and complications. Are the UC vendors prepared to deal with this?
Question: Are the manufacturing vendors in the Unified Communication (UC) market sufficiently tuned-in to have an affect the sales performance of their indirect sales channel?
My answer is: For the most part, no, not really. Of course the vendors should be in the driver seat when it comes to driving sales performance of their indirect sales channel. However, the economic downturn has accelerated the disruption and evolution of the UC market and the vendors haven’t kept up. Unfortunately some UC vendors have turned inward to sort out their own problems, while their VAR’s are at the epicenter of the economic downturn, experiencing severe problems with shrinking margins, poor cash-flow and limited access to new capital.
Assertion: Sales performance of a UC vendor’s indirect channel is the product of the VAR’s Capabilities and relative Loyalty to the vendor.
- Capability is defined here as the reseller’s knowledge and ability to sell, install and service UC solutions (directly or indirectly), with satisfied customers.
- Loyalty is defined here as a reseller’s enthusiasm and focus on the UC market and commitment to the technology set from the particular vendor.
Based on the assertion above, UC vendors need to find ways to have meaningful impact on their VAR’s capabilities and loyalty (the loyalty aspect will be discussed in a later blog post). However, with the sheer volume of VAR’s, many vendors are struggling to drive incremental, yet meaningful impact of the channel’s capabilities.
Invest in Sales Capabilities
Of course we need to recognize that much has changed since the start of the economic downturn. The business imperatives addressed by UC before the decline embarked on strategic aspects such as driving growth, innovation, speed and flexibility. Vendors pushing this agenda today will find themselves struggling. Our collective logic which justified the business value of UC just 12 months ago is now being heavily scrutinized. Today, the business imperatives and purchasing behavior have shifted to a more balanced and refined criteria, driven by operational economics, such as ROI and TCO. Having said that, it’s almost like some of the vendors haven’t noticed that the market has changed or are waiting for the market to come back to what it once was. We all know it will not. In fact I commented on some marketing messages pushed by leading UC vendors, in a previous post: Who is speaking the language of the customer?
Some VAR’s are struggling with the shift in purchasing behavior and have resorted to compete on price, stripping the solution of most value beyond the intrinsic product value. In order to maintain the focus on value and avoid technology commoditization, vendors need to ensure their sales channels are trained how to sell solutions that deliver measurable business results, not just how the technology works and is installed. The vendor’s success or failure depends on this. The name of the game: Consultative Solution Selling.
To have a chance at driving positive impact on the sales performance, vendors need to take ownership of the sales education beyond traditional product training:
- Consultative selling of UC solutions
- Analyze and calculate solution ROI and TCO
- Selling solutions through leasing or financing options
- Selling UC solutions as a service (Cloud or Saas)
I would also claim that the large volume of VAR’s typically have negative impact on the channel and thus on the sales performance. Since the majority of VAR’s in the channel typically only produce insignificant sales results, vendors should be bolder and drop or de-authorize VAR’s that don’t produce or only sell the vendor’s products when the customer demands it?
Interested in your comments….
Monday, 6 July 2009
Leading research suggests that the Unified Communications (UC) market in
Recognizing that UC represents an expanded chapter of the convergence of voice, data and video, vendors need to develop sales channels with improved capabilities, new routes to market and simplified delivery models. Vendors should hit the reset button, and revaluate how they sell through indirect channels and how they manage, motivate and support its value added resellers.
Download This Whitepaper here...
Box.net (No registration required)
Friday, 3 July 2009
When I look at the websites and sales collateral of some of the leading Unified Communications vendors I’m struck by the language used to market their solutions. Has the vendors not noticed that we’re still in an economic slump. Has the vendors not noticed that the business imperatives for customers have changed? Or, has the marketing staff been laid off?
The customer imperatives addressed by UC vendors prior to credit crunch and economic recession were strategic and were articulated as driving business innovation and acceleration or building for growth and flexibility. Today, the business imperatives have changed and are more tactical and driven by cost savings and operational economics, such as ROI and TCO. Yet the vendors don’t seem to accept this and are sticking with the same tone in their communications and marketing. To illustrate the point, I included a few positioning statements from a few leading UC vendor’s websites:
- Innovate across the value chain (Cisco)
- Streamlining for Speed (Siemens EC)
- Accelerate decision making and customer service cycles (Cisco)
- Collaborate effectively in your broadly distributed, mobile environment. (Avaya)
- Communications are no longer a utility, they're an enterprise enabler (Siemens EC)
Juicy, isn't it? Do me a favor and read them out load to see if you believe these messages resonate with customers today.
If you’re a reseller, just ignore the marketing messages coming from the vendors, for now.
Wednesday, 1 July 2009
Friday, 26 June 2009
The Unified Communications Group at Microsoft just announced the Microsoft Unified Communications Consultant Program (UCCP), a program designed to provide consultants with resources and tools to build and enhance expertise with Microsoft UC solutions. The program will offer forums to forge and cultivate key relationships with Microsoft subject matter experts, dedicated program lead from MSFT and loads of marketing support.
Depending on the resources Microsoft will push towards the UCCP (I doubt it will be nothing short of significant), this is a brilliant move. Given that IT consulting firms and system integrators are heavy influencers of VoIP & unified communication, other UC vendors need to step it up and enhance the capabilities of its channel partners. The UC space is getting very competitive and integrators and solutions providers will align with vendors that help them develop the right skills and expertise.
Who is next?