Ubiquitous Connections

Trends For the New Year

2010-01-09T13:33:00.001Z

Hope you’ve had a good start to the new decade. Ever since late December, magazines and blogs have published thousands of articles summarizing 2009 or perhaps the whole decade. Instead, lets focus on the days and months ahead. What are the technologies and trends that will shape our communications world in 2010 and beyond?

Cloud-based Communications– The notion of delivering communications capabilities via the network as a service will be a major market force as the customers will continue to demand OPEX based solutions. Vendors will “jump in” and forge relationships with service providers all over the map. The challenges will be bountiful, with transformations of sales models, delivery model and support. What role will the indirect sales channel serve in a cloud environment? Can it evolve quickly enough?

SIP Trunking – My assumption is that every product release going forward will have been architected to support SIP. The value proposition of managing call control as well as reduce the dedicated PSTN lines (PRI) through SIP is too good for corporate businesses to ignore. This will be the year SIP Trunking will take off and drastically reduce PSTN traffic.

Social Media – No question, social media is here to stay but the applications of how to drive business value through social media has to evolve before corporations will invest more. I believe there will be a huge focus on integrating social media applications with communications and CRM platforms to capture online interactions. The need to define the social media universe into different types of connections and networks based on different context will drive much innovation. An important question for the industry is whether social media vendors can employ a business model that is not advertising funded. I wonder?

Mobility – 2010 will be the year of the smart-phone. Google, RIM, Nokia, Motorola, Apple, Samsung and many other vendors will double down on the smart-phones. With the explosion of apps for anything and everything, the smart-phone will become the computing platform of choice. With already several different ways of integrating and managing call control between fixed line networks and mobile networks in existence, business users will only need one number and one telephone device. My guess is that many “information workers” will opt for a smart-phone device for most of their communication needs.

We will see what happens!!

Happy Holidays to you all...

2009-12-23T11:45:00.001Z

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

2009-12-20T14:15:00.003Z

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

2009-12-07T12:34:00.023Z

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.

Channel Marketing – Failing to Deliver?

2009-11-23T08:26:00.018Z

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?

Cloud Based Communication Services- Part 2

2009-11-22T15:31:00.021Z

Greetings,

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?

Reseller Dilemma

2009-11-10T21:16:00.007Z

Folks, it’s becoming increasingly clear to me that cloud-based IT and communications delivery will become a major threat to reseller serving the small and mid market customers, unless they adapt and quickly augment their business models. David Pratt, the COO of ThinkGrid, recently wrote a very insightful article for CRN called; What future lies in the Cloud, where he discussed the reseller dilemma in “cloudy conditions”.

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?

Cloud Based Communication Services

2009-11-01T19:58:00.018Z

Hi Folks!

I've been doing a lot of thinking and speaking to people about what it will take to win, or rather, become a market leader in the cloud based communications market? Which enterprise unified communication vendors and service providers have made the market investments and moves towards delivering communications capabilities as a service? Which providers will be the winners? How will the business of the unified communication vendors change? In a series of articles I'm going to share my view and opinions on what’s happing in this space.

Even if it’s still early in its evolution, sourcing communication capabilities as a service as opposed to buying, integrating and managing premised based equipment is more viable than ever. It’s primarily the current economic climate and focus on cost control that has escalated the rate of adoption of cloud based communication solutions. The increased demands for OPEX based solutions certainly help generating a lot of interest. In addition, while the use of sophisticated communications and collaboration capabilities is often a strategic part of conducting business, it’s rarely a core competency. Result: vendors and service providers of varying types and sizes are hurrying to take advantage of this evolving market.

A historic inhibitor to adoption and growth of cloud based voice and unified communication services are that sceptics and “nay-sayers” have been making lots of noise. Concerns for data security, integrity and privacy have been the most common arguments. All I have to say here is; Come on, look at SaleForce.com. They have convinced hundreds of large global corporations to buy into their CRM solution, delivered as a service. What can be more sensitive than trusting a 3’rd party to control and manage all kinds of data records and correspondence with customers and partners? Yet, SalesForce.com has been very successful and today sports a market cap of more than $7b. I think we have crossed the chasm and corporate customers will now seriously consider cloud based unified communication services.

Even with some customer concerns lingering, as I see it, the biggest inhibitor to growth lies inheritably with the vendors and service providers themselves. In order to execute on the cloud opportunity, vendors and service providers will need to augment their business models and channel strategies. The fact is, the notion of cloud computing represent an open and democratic (so far…) infrastructure to build upon, or a clean canvas on which vendors and providers can paint their technology vision. Thus, the cloud has opened the floodgates for service innovation and market disruption. This disruption will quickly force vendors and service providers to seek new ways for aggregating, selling and delivering communications services.

Lemon-Operations, a services company focused on recruiting, developing and managing indirect sales channels for IT and communications vendors across Europe and United States, is doing a lot of work for vendors who want to win in the cloud. I think Lemon-Operations metaphor for what’s happing in the cloud space is quite astute: While service innovation is shaping the IT revolution below the Cloud, vendor Galaxies will fight it out above the Cloud.

The key to success will be for the vendor to establish themselves as a center-of-gravity, or a Galaxy, to which other technology partners and resellers are attracted. To continue with the metaphor, the intensity of a vendor galaxy’s gravity will depend on to which extent other technology partners, resellers and influencers can grow and prosper within that galaxy. As such, the vendors need to get on-top in the value chain by developing compelling value propositions that attract many other types of businesses and partners. Further more; this will require new partnerships and contractual arrangements with infrastructure partners, technology partners, resellers and influencers. Put simply, establishing market leadership in cloud based communications market will require an augmented business mode, a much different eco-system and much more diverse indirect sales channel.

What do you think? Which vendors and service providers are in a position to establish the greatest and most influential Galaxy?

IPExpo: A missed opportunity to make the case

2009-10-12T14:31:00.013+01:00

Autumn greetings to you all! After a very busy start to the fall season, I’m back. The IPExpo 2009 event concluded in London last week, where the leading vendors of IP communications & collaboration, virtualization and cloud computing were demonstrating innovative solutions.

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?

Communication as a Service

2009-08-24T19:11:00.020+01:00

Wow, thank you for all your feedback and email I received on my last post Is Google Voice a Game Changer? I do appreciate it. Here I want expand the discussion around delivering business communications as a Service, and ask what role the voice vendors will play.

Even if Google Voice is primarily consumer focused, it still has merit. What I believe Google has accomplished with its Google Voice launch (only available in the US so far) is to instill a bit of fear with carriers, network providers and even with voice equipment vendors. People go: Google did WHAT? You’re telling me that Google can liberate me from the stronghold of my service provider, circumventing roaming charges, one number, aggregated voicemail etc. Wow, that’s very cool... I want that.

It’s not that I think Google Voice represents technical innovation or feature superiority over what other service providers in the voice space can provide today. The issue is that these other providers don’t have the audience and mindshare to be fully heard yet. On the other hand, Google does have scale and mindshare with us, both as individuals and as consumers in order to bring this type of service model to forefront. Perhaps Google has illuminated what “some-what-more-intelligent” communications is to more people. If so, that is good.

But Google Voice is not business grade and is certainly not a full featured Unified Communication (UC) solution. But for a business who can’t afford an IT staff to manage a UC solution, the alternatives aren’t that obvious. Full featured UC solutions are still complicated to deploy, and the operational footprint is too large for the vast majority of small and medium businesses to seriously consider it. Various types of service providers (SIP, FMC, high-speed broadband) have recognized this and are working feverishly to put themselves in a position to deliver communications capabilities in the network, as a service. However, their biggest challenge is establishing the right sales channels.

What about the voice vendors…are they in a position to deliver UC as a service? No, not yet. Even if Cisco did acquire the voice conferencing service WebEx in 2007, it’s still just one slice of the UC spectrum. The fact is; the business model for most voice vendors is still based on selling hardware equipment and software licenses through an indirect sales channel. But in a world where software and services, embedded in the network is becoming more common, what role will they play?

Question: Which of the leading voice vendors (Cisco, Avaya, Siemens EC, Shoretel, Mitel etc.), do you think will be first in evolving their business model to include Communication as a Service, either as a complement or as an alternative to premise based equipment? Alternatively, who will be first to acquire or create a meaningful joint venture with a network/service provider or a Fixed-Mobile Convergence (FMC) provider? Such a move would open up many more sales channels and make UC more accessible for the small and medium businesses.

Let me know what you think.

Is Google Voice a Game Changer?

2009-08-11T11:33:00.015+01:00

Google un-wrapped its anticipated GrandCentral voice project earlier this year under the name of Google Voice. Although Google Voice only available in test mode to users in United States for now, my guess is it will become the talk of the town going forward. What impact will Google Voice have on the voice communications market? Will it be a game changer… and for whom?

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…

Do Unified Communications and VoIP Vendors Need New Channels?

2009-08-04T12:48:00.029+01:00

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 Margo lis 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?

Driving Sales Performance Through the UC Channel

2009-07-15T14:09:00.000+01:00

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….

Unified Communication: Capturing the Growth Wave

2009-07-06T22:29:00.000+01:00

Summary

Leading research suggests that the Unified Communications (UC) market in Europe is primed for phenomenal growth over the next 4-5 years. Despite this, there is little evidence that the manufacturing vendors in the space are making the required investments in order to capitalize on the growth opportunity. Many of the vendors in the UC space are still too product centric and are suffering from a “box-pushing” legacy of how to do business that is hard to shake.

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...

InformationWeek ...or...

Box.net (No registration required)

Who is speaking the language of the customer?

2009-07-03T13:38:00.000+01:00

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.

2009-07-01T09:08:00.000+01:00

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Microsoft takes a step towards building UC expertise with consultants and integrators

2009-06-26T19:48:00.000+01:00

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?