John Rees, Commercial Director at Content Guru, talks to Comms Business Magazine about how the company is approaching selling cloud based products and applications to the channel.
Comms Business Magazine (CBM): Why should voice resellers now be delivering IT services from the cloud?
John Rees, Commercial Director at Content Guru (JR): When we came to market seven years ago, many customers weren’t convinced that cloud was a viable option for the delivery of IT services. Today we’re past the question of whether cloud will make it and it’s now a case of how far will it go.
The market for on-premise solutions is not going to change for the foreseeable future. That being said, it is currently going through a steady decline, with figures we’ve been given for the UK PBX market showing a 7% year-on-year decline. We are seeing some growth in the contact centre market, with certain analysts predicting growth of 4% per year over the next five years. Compare that with competitive cloud services, which are experiencing growth in excess of 20% per annum and it’s worth taking a serious look at what cloud communications can offer.
The upsides if you get it right are fast-growth revenue opportunities and relationships with customers that are much longer-term than less commoditised solutions. If the wrong decisions are made, however, the downsides can include severe reputational damage and massive service overheads that will kill any profits.
The cloud space is undoubtedly hot at the moment with fast-growth, sticky revenue and high margin, but moving into the market requires careful thought if resellers want to avoid being burnt.
CBM: How do suppliers ‘shake’ the resellers out of their CPE-based comfort zones?
JR: At Content Guru, we believe in providing a solution that enables our partners to undertake the move to cloud on their own terms, and at a pace they are comfortable with. Resellers can, and should, be able to adopt cloud and incorporate it into their product portfolio without stepping outside their comfort zone.
There is a common misconception in the market that resellers looking into adopting cloud must take an ‘all or nothing’ approach to the technology; that incorporating cloud services into your portfolio is entirely incompatible with the sale of traditional on-premise solutions. This is not the case.
Hybrid deployments provide resellers an opportunity to introduce cloud to their portfolio gradually, without disrupting their existing CPE-based business. Cloud services can overlay and integrate with existing on-premise infrastructure, complementing and even adding considerable value to CPE offerings.
CBM: What type of IT applications may be suited to these types of reseller?
JR: We have found that the most effective services for resellers apprehensive about adopting cloud are those that can overlay on-premise solutions as part of a hybrid deployment.
Cloud-based number management and IVR services, for example, can sit in front of on premise PBX and field all incoming calls in the cloud before they hit a single site. IVR in particular can be used to automate common enquiries and route calls to the most appropriate location across the business, raising efficiency and reducing the burden on the on-premise estate. In the past, we have seen services of this kind help our customers automate over 90% of enquiries during peak periods.
This kind of service enables resellers to introduce cloud technology to their portfolio gradually. As on-premise equipment goes end-of-life, resellers can offer a replacement CPE solution, or equivalent functionality in the cloud according to the preferences of the customer. The presence of the cloud in front of the customer estate gives the reseller options, empowering them to offer the best solution according to the needs and preferences of the customer.
CBM: What are the first steps that resellers should take in their journey to the cloud?
JR: Even in today’s maturing market for cloud, moving into selling cloud-based services and applications is a learning process. There is no fixed formula for success in cloud and resellers must be prepared to make some mistakes as they begin to put the necessary processes in place.
Resellers who are new to cloud can benefit greatly from migrating existing customers with whom they already have strong working relationships. Delivering cloud-based services needs resellers to be able to provide complete end-to-end solutions requiring the successful implementation of multiple supporting processes. Getting these processes right can take time and having a loyal customer who will work through this teething process with you is an invaluable asset.
CBM: Are cloud-based services a key to building business value for the reseller?
JR: Compared with traditional on-premise solutions, the flexibility of cloud-based services provides a huge opportunity for resellers to differentiate and add value to their business.
Unlike physical equipment, cloud-based services have a fluid set of functionality. Additional services and features can be switched on and added to a solution as and when the customer requires, offering a powerful proposition to the reseller. Resellers can build tailored solutions that are designed to suit the specific needs of individual market segments or even individual customers.
This flexibility is one of the key benefits of cloud technology, particularly for the channel, and one which vendors should seek to emphasise as part of their offering.
We do not offer our NGware partners a set of fixed features, but powerful building blocks with which resellers can build their own white label services. Resellers can repackage features from a range of inbound, SIP, cloud PBX and cloud contact centre services freely to create their own products and intellectual property which cater to the needs of their own customers and target market.
CBM: Are the sales of cloud-based services being driven from the consumer market, i.e. influenced by users’ experiences of social media, web mail and smart phones?
JR: The consumer market for technology has undoubtedly had a profound impact on the demand for cloud services in the workplace. Through the widespread popularity of social media and Google-style web services, the average consumer has become well accustomed to the benefits of cloud. Meanwhile, the proliferation of smart devices in recent years has led to a generation of consumers who expect on-demand access to the information they want as and when they need it.
This rising consumer expectation around technology, ‘consumer techspectation’ as we like to call it, have very real consequences for the business world.
We are all consumers, and in our private lives we are used to the likes of Amazon and Google using joined-up technology to deliver a consistent customer experience across multiple channels and media. We are used to being able to access the information we want, when we want, from any location with an internet connection, and we are bringing these expectations with us to the workplace.
People are seeking the same joined-up experience in their professional lives that cloud technology is able to deliver at home. The challenge for providers of cloud-based communications is to mirror the seamlessness and ease-of-use that companies like Google have demonstrated in delivering it.
CBM: Is the market being driven from the bottom-up i.e. SME first?
JR: The market for cloud is remarkable for the role that SMEs have played in driving demand for the technology. Traditionally in the communications space, we have seen a tendency for large enterprises to lead adoption of new technology, with the SME market following suit as prices fall. With cloud, we have seen the reverse happen. The SME market has embraced cloud-based solutions relatively quickly, whilst large enterprises have been comparatively hesitant. This goes to show how cloud is fundamentally changing the paradigm for technology adoption.
In part, this can be attributed to the scale of prior investment that these businesses have made in on-premise equipment. We find that these larger enterprises often possess expensive legacy equipment that they want to leverage maximum value from, and are therefore reluctant to replace. As a consequence, we find that many of our solutions for these types of customer require more complex levels of integration in order to extend the life of previous investments.
CBM: What issues do data protection, retention and e-discovery present vendors, especially regarding issues such as audit and compliance?
JR: We have found that some of the most common questions about cloud, particularly common amongst larger enterprises, relate to security. Many businesses are apprehensive to outsource sensitive processes to the cloud, but there are measures that vendors can take to reassure their customers about the security of their data when using cloud-based services.
At Content Guru, we are fortunate enough to be able to leverage the work we’ve done for enterprise customers to ensure that the NGware platform offers the appropriate standards of data protection and security. Each of our clients is provided with a secure partition on the platform, and on an architectural level we use telco-grade infrastructure and data centres to ensure optimum security.
As part of those commitments, we hold both ISO 27001 and Level 1 PCI DSS accreditations, which are essential in demonstrating that we can meet the highest international standards of data security. However, achieving these certifications is not easy and it requires significant dedicated resources to maintain them, so vendors have to be prepared to invest heavily in ensuring their internal processes stand up to scrutiny.
It’s a cultural challenge just as much as it is a business process challenge, because ultimately your systems are only secure if your people understand their individual responsibilities. Regular audits, reviews and training are paramount in keeping employee awareness high and minimising the risk of a security breach.
CBM: Is it simpler to keep hosted apps up to date, enterprises might run the risk of appearing sluggish or out of date?
JR: The right type of cloud platform can offer businesses a future-proofed solution for their communications. It is all a matter of scale.
At Content Guru, we take a very particular view when it comes to the distinction between cloud and hosted solutions. Whereas hosted solutions denote equipment housed in a data centre, we like to define cloud solutions as those which are embedded in tier 1 carrier networks at multiple different points.
Cloud solutions as we define them are able to deliver massive scale compared with hosted alternatives, supporting more users and allowing those end users to benefit from economies of scale.
Put simply, the more users there are sharing a platform, the more resources there are to invest in it. As a result, vendors operating large scale platforms can update their technology regularly, keeping its capabilities in line with leading edge functionality. These ‘evergreen’ deployments, as Gartner call them, far from running the risk of appearing sluggish, provide enterprises with a cost effective means of maintaining future-proofed best-in-class communications functionality.
CBM: What advice can be given to UK VARS looking to move into selling cloud-based services and applications?
JR: The market for cloud services operates differently to the traditional CPE market and resellers should be prepared to work more collaboratively with vendors than they have perhaps been used to in the past.
Identifying a suitable technology partner is an important step when looking to move into selling cloud-based services. An ideal partner will just possess a strong technology offering, but will also be willing to support you through the on-boarding process. Unlike CPE, cloud requires resellers to take ownership of a complete end-to-end process in the delivery of services, and a partner who will work closely with you to prepare for this will prove invaluable.
When you have found your ideal partner, a good next step is to begin by using your chosen cloud technology internally. We have seen several of our partners take this approach, and have found that this has helped them become intimate with both the way the technology works and the benefits that it has to offer. Not only that, but it demonstrates real belief in the technology you are selling, which can be a powerful asset in those crucial first discussions with potential customers.