Happy Holidays to you all...

Cheers!

First of all I want to thank all of you who have been reading and contributing to Ubiquitous Connections this past year. I appreciate your feedback and commentary as I have learned a lot from listening to many of you.

As 2009 draws to a close, it's time to slow down and spend some quality time with family and friends. Same goes for me, I plan to spend Christmas in Sweden and New Years in south of France. The focus will be to eat good food, hang with the people you love and to rest & recharge the batteries for the new year.

Happy Holidays & Happy New Year!

It seems like there is a good chance for a white Christmas in many parts of Europe and North America this year.

I look forward to catching up with you in early 2010! Until then, have fun and enjoy!

Channel Sales Performance

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.

Cloud Based Communication Services - Part 3

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.