Changing Tides in the Channel – Opportunities and Considerations in 2017
The opportunity in the global UCaaS market was pegged at US$8.23 billion in 2015 and is projected to be worth US$79.3 billion by 2024. That represents a huge opportunity for growth, and we continue to hear our partners say they are experiencing a spike in demand for cloud technologies, particularly among enterprises. Businesses are savvier today than in previous years, and there’s much to be said for securing value for investment while also mobilizing and conducting business more efficiently.
Because enterprises have a myriad of options when it comes to evaluating the technology landscape, the channel provides the voice of reason they often need to pull the trigger on big deployments — like migrating to the cloud, for instance. Enterprise customers are seeking best-of-breed cloud solutions for their next transition and turning to channel leaders for guidance and support. According to Frost and Sullivan, “Depending on how you count, between one-quarter and one-third of hosted IP telephony and UCaaS sales go through a channel, including white-label, wholesale, and other resale arrangements.”
According to a recent NoJitter report, more than half of companies surveyed said they currently use or will be using the cloud for their unified communications needs in the next 12 months. Although the opportunity is great, so is the challenge of migrating enterprise customers from their legacy on-premise systems to a cloud solution. As enterprises continue to shift from a hardware-first model to a cloud-first model, it’s important that channel partners have the latest, best-in-class technologies to bring to customers. If partners are appropriately armed, they sell better and help enterprises thrive.
For vendors in our space, the words of Frost & Sullivan’s Elka Popova reflect what we look for in a channel partner: “Voice and data service expertise, multi-vendor technology familiarity, ability to integrate communications with other software, and a consultative approach will be critical for partners to remain competitive in the cloud communications market.” For the channel, deciding who to partner with is most critical. Here are some suggestions on what to look for in a unified communications technology provider:
Integrations: The ability to integrate with applications that your customers are already using will not only be critical in the sales process, but also expedite deployment. Key applications to consider include Google Apps, Microsoft Office 365, Zendesk, Salesforce, etc. The plug and play ability to facilitate phone calls, text messages, video conferencing, and team messaging into tools like these can provide a massive advantage over the competition.
Customer Focus: Alignment with the intended customers is critical. Is your future partner trying to provide technology to everyone, or have they built their products to service your customer base specifically? Do they have the ability to service an ongoing engagement or the ability to scale as your customers grow?
Transparency: Knowing your provider’s product roadmap, availability and customer satisfaction status is critical. These factors will help determine how much time after deployment your team will be spending with customers and how your reputation may be adversely affected if customers have ongoing issues. The provider’s financial status is also critical in determining their long term viability.
Channel Strategy: Your provider recognizing the value of the channel is critical. Providers who sign too many master agent agreements are unlikely to be available when you need them. Expect top-notch sales support to help increase close ratios.
Enablement Support: Request subject matter experts to be available, at no cost, to assist in the sales process and close deals. Only end-to-end partner support that encompasses sales, implementation and the provisioning and ongoing support of your clients should be accepted from your vendor partner. Close ratios are generally higher when your vendor relationship is a partnership instead of a transaction.
Industry Validation: Customer references and analyst validation will prevent a lot of “why them?” questions when dealing with your customers, but it will also arm you with validated details on where the vendor fits in relation to its competitors, why customers have selected them, and where their vision and strategy rank in terms of what your customers are asking for.
According to The Var Guy’s own Kris Blackmon, the days of vendors launching new and incompatible products is drawing to a close, with the UC market expected to mature in 2017. The floodgates to UCaaS are opening as enterprises are realizing the cloud has won. While there’s lots of change ahead, it’s the transformational type of change that will yield incredible results. It’s an exciting time for the channel, and establishing the right vendor partners will help ensure a fair shot at this nearly $80 billion market opportunity.
About the Author
Zane Long joined RingCentral as Vice President of Global Channel Sales in March 2016, bringing more than 20 years of leadership and management experience in the telecommunications industry. He held several leadership roles previously, including: VP Global Strategic Partner Group at Vonage (1.5 years), National Vice President Indirect Cloud Channel Sales at Cbeyond (3.5 years), where he was instrumental in transitioning the company and partners to cloud services (UCaaS and IaaS), Senior Vice President of Global Partner Sales for Genband (3 years), where he led and managed international strategic partners and National Vice President of Channel Sales at Level 3 Communications (7 years).