ARG Sees Writing on the UCaaS Wall
Seven years ago, ARG saw the writing on the wall for unified communications as a service as a major disrupter to its business. Mike Shonholz, ARG’s (No. 82 on the 2019 MSP 501) chief revenue officer, saw numbers start to swing cloud-ward, and decided to act.
The company went through a significant shift, during which many technological or operational developments occurred to support this evolved business model.
Here, Shonholz talks about those shifts, and the growth in UCaaS and CCaaS.
Channel Futures: Please describe your business model prior to six years ago when you were a pure-play telco agency. Why did that model work then? What were the industry dynamics, customer needs, emerging tech trends and so on?
Mike Shonholz: Growing is easy when you consistently deliver value to clients. ARG started out in the D.C. metro market. The business environment in the Washington metro area is heavily shaped by the government, so D.C. is a three-quote town. As a founding member of the Agent Alliance, ARG could easily facilitate those three quotes with a quick call to a single number. We leveraged our buying power to get “best and final” off the bat and save our customers from extraneous fees and charges through the best contracts in the industry. Couple the ease of a one-stop shop with our engineering, onsite installation support and [around the clock] onshore customer service and we were a no-brainer for companies.
Since most businesses don’t change providers often, we were typically finding 30% savings for clients when they moved to procuring services through ARG — this ability to find savings helped us stay recession proof as we helped businesses weather financial booms and busts. Our clients could count on us to bring renewal options along with new technology options and they appreciated a proactive approach with options served up. With the trifecta of service, savings and ease of doing business, we grew steadily through customer and vendor referrals.
CF: When did you begin seeing a need to evolve your business model? What trends prompted and supported this decision?
MS: Seven years ago, we saw the writing on the wall for UCaaS as a major disrupter to our business. We were promoting SIP and PRI-supported systems and regularly running ROI analyses for clients comparing premises-based systems to cloud communications and saw the numbers start to point to the cloud. In addition to the emerging cost benefit, the maturing UCaaS players offered protection from obsolescence with evolving product offerings.
We also saw Cisco building cloud-based services such as HCS. We saw that Microsoft was moving strongly to the cloud, and AWS was gaining traction — and the proliferation of data centers gave a strong indication where the market was headed. We did not see the similar investments being made in equipment. Any equipment announcements were clearly aimed at the carrier-class — or more specifically, cloud provider marketplace.
CF: What were your first steps (for example: customer discovery, financial analysis, competitive analysis and so on)? What were you surprised to learn during this stage?
MS: Our first step was a deep technical dive on all things UCaaS, creating a 145 questionnaire that addressed the major areas of the technology. We took the top providers we saw in the market through a thorough vetting process to ensure that we knew the benefits and limitations of each providers product.
We began with the assumption that …