“While there is a growing demand for these solutions from end users, the level of uptake is still being led by the resellers themselves, in particular those in the hosted IP Telephony market, working towards unified communications.
The rise of Next Generation Access stems from the gap EFM, FTTC and Annexe M bridge between SDSL and expensive leased lines. In the past, resellers would often come across end users who would want high bandwidth connectivity, without the budget to afford it. Now, the introduction of NGA means the reseller is able to offer a number of different solutions to resellers for varying budgets, meaning they are no longer having to turn down business based on price or bandwidth.
We are witnessing an enormous uptake of EFM as it becomes the replacement service for people to whom leased lines are out of reach. Smaller businesses, which in the past couldn’t afford the expense of a leased line, are now in a position where they can access higher bandwidth due to EFM.
However, the roll-out of these solutions on a carrier level can also drive demand. For example, although we are seeing a huge demand for FTTC, not all cabinets have been upgraded with fibre, therefore marketing campaigns must be targeted.
Resellers who do adopt these solutions are more likely to already understand data and have the confidence to sell it. This type of resellers will almost certainly have the support of a distributor behind them, providing them with the education to take these products to market. The main driving force behind them adopting these solutions is the promise of higher margins and longer term contracts.
In terms of ‘When are they going to be in the mix for exciting sales opportunities?’, that is really a question for the reseller. These application services are out there being sold and developed all the time. Everyone has a responsibility in helping the channel get up to speed with these new solutions; we need to approach these with a team mentality and work more closely with our clients. I think there has to be an element of responsibility put on the channel to seek the guidance and find ways in which they can differentiate their solution. A well-positioned distributor can only do so much; resellers working with their supplier will be more successful.
For resellers who have yet to adopt these solutions, it is mainly down to a lack of education. The carriers’ intentions of taking the SME market also makes selling a lot more challenging. It’s therefore increasingly important for the reseller to know exactly what they are trying to achieve; they need to know how their value add is going to persuade the end user to take leased lines from them rather than the larger carriers.
The resellers who are too afraid to introduce NGA products into their portfolio are massively limiting their chances of growth. Traditional lines and calls resellers, for example, are going to get left behind if they don’t adopt these new solutions. They are ultimately going to lose business to the resellers who are able to offer a complete portfolio of services; if one of your end users has to approach a different reseller for EFM – and they too sell calls and lines – then you have just introduced a competitor to your client base.
For end users, education is growing; the consumer market is often where people are first introduced to new products and the same is happening with NGA. Television advertisements promoting fibre broadband and IP television is bringing education to the end user – many of whom are running a business. If companies are not already running some of the software packages available, it is in the pipeline for them. They are recognising that NGA products are what will make their business run more efficiently. The quicker the broadband up and down load speeds, the more applications they are able to run succinctly. If a reseller doesn’t have the bandwidth to support resources such as sales support and portals for their end users, their clients are going to suffer. Those end users will be operating a lot slower, thus impacting on the services their taking to their own clients.
From O-bit’s perspective, we have seen an increase in the uptake of NGA applications; we view it as a necessary step for our resellers to secure their future and ours. Where buying data services previously involved huge bills and installation costs, NGA services have made way for more affordable solutions and opened up a middle market which our resellers now operate within. We have taken a data team on board to purely educate our resellers on these services in order to take them to existing and new client bases. It’s an area we have invested a lot of money into in terms of our network, so we can offer these services independently.
To summarise; from the NGA products already out there, we know we are going to get very fast broadband, opportunities for better margins and stickier clients, but we also know we are going to face challenges as we do with any new products. As always, success is going to come down to how those solutions are packaged and how we identify our unique route to market. While aggregators have a duty to educate the resellers in the benefits of these solutions, resellers themselves need to accept an element of responsibility and recognise the importance of moving forward.