2017 has been a turning point in the channel where all of the predictions from the last few years about changing business models, new partner competitors, and rapid adoption of emerging technology began to come to fruition. Most traditional partners have incorporated some managed services or recurring cloud solutions into their portfolios, but too many are dragging their feet when it comes to fully embracing the shift to a consumption-based channel.
When it comes to unified communications, there seems to be a bit more of a clear divide between leading adopters of the as-a-service economy and VARs and MSPs still stubbornly basing their businesses on physical PBX systems, switchers, and routers. But every day it’s becoming clearer that partners looking to build a business for the future need to adjust their mindsets and their business models and embrace UCaaS solutions.
Don’t believe me? Just take a look at the pivots the big, traditional unified communications vendors have made this year. Microsoft is resetting their product strategy around Teams with much of that capability slated to really take off in the second half of next year. Cisco’s acquisition of Broadsoft means a new, aggressive go-to market focused on the cloud customer segment and a continued effort to balance cloud and on-prem solutions. Avaya is emerging from chapter 11, and though its cloud strategy is still rather vague, it’s made its intention to pour what R&D funds it has into cloud solutions. Newer offerings like Oceana and XCaaS 2.0 will be center stage, and emerging players like Ring Central, 8x8, Collab9, and Amazon’s new offerings will gain market share, driving longer evaluations and sales cycles.
Adding to the complexity traditional partners are going to have to tackle next year is the slew of ‘add-on’ services they’re increasingly being asked to provide. Security alone requires an extensive mix of services and solutions in order to craft an adequate defense, and the solutions providers craft for their customers are dependent upon numerous variables and specific to customer vertical and horizontal specializations.
UC partners are traditionally masters at implementations and integrations, but in a cloud world, those efforts barely resemble the services many of them built their businesses on. Today’s systems integrators can’t just be technology consultants. They have to be business consultants, and realize that their fingers are more than likely going to touch every piece of their customers’ IT pies. When you factor in the plethora of choices offered by all of the public, private, and hybrid solutions in the market, the task becomes a lot more complex. No wonder many traditional partners are reluctant to tackle a process that seems to produce pretty small margins for a much bigger effort.
Walter Monasterio, VP Channel and Service Providers Americas at UC service provider IR, says there are a few primary concerns traditional partners have when trying to craft repeatable, profitable UCaaS solutions and develop associated deployment and integration strategies. Most of them stem from a fear of the unknown and a lack of expertise surrounding cloud implementations, but there are ways to make these issues a little less intimidating and more achievable for 2018.
1. Integrations are so much more complex, how can I avoid common pitfalls and complications?
There are a lot of different platforms and choices out there, customers usually aren’t ‘all in’ on either a public cloud or on-prem solutions. Most of them put a subset of users in each bucket. That means they’re going to have to consider possible integration issues--which, along with added complexity, offer added opportunities for upselling for partners.
“Certain systems and applications may integrate into an organization’s on-prem deployments, and some may not integrate into cloud solutions,” says Monasterio. “It’s important to develop a strategy over time.” Customers and partners should work together to answer questions like:
- How many people can I move over to a new shiny toy?
- How do I keep the business critical applications that are linked to my legacy systems up and running?
- What’s the balance from a cost business perspective?
- How long can I do this?
- What are the costs to the business vs. the benefits in return?
“When a customer is looking at a platform and thinking about cloud, they have to investigate which applications are connected to their PBX and determine whether or not they can live somewhere else,” says Monasterio. “Then, they can determine whether or not they can do 100 percent cloud and integrate with everything they have.” The key is thinking through potential issues and developing a strategy to address them before they happen.
2. How do I choose a program that easily scales?
Consumption- and subscription-based solutions are the name of the game in today’s channel, and customers are going to look to cloud providers that have utility models that allow them to turn it off, turn it on, and pay for only what they use when they need it. If a company has peak seasonality, they want to be able to fire up more users and more agents during that time, and then turn that down. Partners need to make sure to evaluate the per seat cost compared to an on-prem environment to ensure the flexibility makes sense and will help customers achieve their business outcomes.
If a company can get that from its current vendor, that’s great. They will then have all their integrations done and will be in a good place. However, it’s becoming increasingly rare that comprehensive solutions can be crafted from a single product line. The days of being an ‘Avaya shop’ or a ‘Cisco shop’ are rapidly fading into a fuzzy memory. Partners need to carefully think through each solution’s ability to scale together. Otherwise they run the risk of some applications putting a hitch in the giddy-up of their UCaaS solution offering.
“As a partner, you have to take your customers through this journey and really understand how good of a candidate they may be or what their UC profile is in terms of what they can deploy,” says Monasterio. Again, preparation and forethought will protect you from having to develop and deploy an entirely new solution as your clients grow.
3. How can I customize a UC solution so that it’s a low-effort/high-margin offering?
By now, you should be sensing a theme. Take a cue from the Boy Scouts, and always be prepared.
“The more legwork you do upfront to deploy and optimize the solution, the more you can come back and sell additional functionality,” Monasterio advises. “This means lower effort because you have documented everything up front, you understand the deployment, it’s stable, it’s working as it should, and you’re delivering value to the business.”
In return, what you should get is a lower effort upgrade or expansion, which will deliver a higher margin back to you as a partner. The more you can invest up front, in making sure things are right, the lower the effort it is to come back to transact with your customers on a repeat basis. It’s all about being able to craft those repeatable ‘in a box’ solutions.
“Maybe you don’t need to use a highly skilled resource,” says Monasterio. “You can use a junior resource because the system is stable, so you’ve got good documentation, and that’s going to return higher margins to your consultancy or your practice.”
Partners are going to have to learn to spend more time presenting options, studying different OEM offers, and defining integration strategies than they probably ever had before, and they’re going to have to prepare their businesses for the resulting longer sales cycles and deal that are broken up into smaller pieces that let customers move at their own pace. They’ll need to do more self-education and more than likely shuffle some resources around as the shift from pure technology consulting and implementation services moves toward solving for business outcomes. It won’t be simple, but it’s definitely doable.
Monasterio advises partners to “get smart”--not only about the technologies, but the expanding ecosystem and partners. In 2018, when the emphasis on hyperspecialization and emergence of new partner types means a crowded channel with plenty of resources for overwhelmed VARs and MSPs, there’s no reason partners have to bite off more than they can chew.
“If you can’t develop a competency around new technologies quickly enough look to build ecosystem partnerships with other players who have the expertise you don’t offer today and can’t build quickly enough.”