With BT Wholesale having launched Avaya Cloud Solutions last month at BT Tower, Comms Business Magazine talks to BT Wholesale’s Avaya Cloud Solutions Programme Director Simon Orme about whether the product can bring together contact centre and unified communications into one package for the channel in the form of a fully-integrated front and back-office solution.
Comms Business Magazine (CBM): Avaya Cloud Solutions sounds like it could be an exciting proposition that covers both contact centre and UC. How would you describe it?
Simon Orme (SO):Contact centres and UC can be quite scary terms, so perhaps a better way to describe it is front office and back office environment. So in the front office, you tend to be talking to an organisation’s customers, either in a desk-based selling or service operation. The back office could be a mix of different functions, so product management, HR but also in this UC environment, people out on the road in field. Every organisation that has a front office has a back office. And many organisations with a back office also have front office activities, even if they don’t describe them as a contact centre. So for a channel partner there is always a cross-sell opportunity from contact centre into UC and vice-versa. It’s all about cross-sell and gaining higher profitability for the channel provider.
CBM: Why is BT Wholesale launching this proposition?
SO: We have seen a gap in the current market, specifically in the mid-market and enterprise and government segments. Most current offers are targeted at the SME. We think there are clear differences between what is required to serve the SME versus the enterprise both in terms of end user needs, the kind of channel provider (partner) – segmentation in the channel and at the end-user.
CBM: How would you describe the proposition?
SO: It’s not shrink-wrapped at all, it is highly- componentised and channel partners can put together solutions for customers that are available from the menu of services. Over time we can make that even more componentised.
CBM: How big do you see this opportunity?
SO: The contact centre market is worth about £2 billion a year, with about half of that in these target segments. A billion pound opportunity, including the full suite of ICT spend. Currently about 10-15% of that is cloud, so probably about £150 million, but growing a very fast 20-30% a year in the cloud. So it could grow to £300 million in 2-3 years.
The UC Market is worth about £500m per year, and more than 50% of this is already delivered as cloud. This market is growing fast as legacy PBX systems get replaced with UC. We see channel providers getting 50%/50% monetary value splits in terms of UC and CC.
CBM: What sort of channel providers are you seeking to work with?
SO: Larger organisations tend to look for something specific for their requirements, whereas in the SME marketplace requirements tend to be more standardised and more commoditised. In the enterprise market, customers tend to be writing quite detailed statements of requirement. In terms of channel providers, it’s those that are experienced in providing solutions to those specific customer needs. For example the customer might want to change just one element and therefore they don’t want something that is shrink-wrapped. They want something that is ‘componentised’ and can be integrated with an existing ICT asset. More specifically, we are looking at those providers with Avaya accreditation. In the first wave we will be selecting partners based on their accreditation.
CBM: Why Avaya?
SO: Avaya are the leading provider to these segments both in contact centre and UC, with Gartner ‘Magic Quadrant’ status in both propositions. Channel providers can then address the full requirement set of the end customer. So when we looked at the market, vendors may be strong in one area – contact centres, but not UC as well. Avaya has that footprint.
CBM: What factors are driving the take–up among end-user organisations?
SO: Contact centres are dynamic applications in terms of peaks and troughs; think of an international flower company on celebration days. But also think of the pro-active and reactive activity in any organisation. In large organisations they would have to buy for those peak events and pay for that over the life of the contact centre. Locked in to an incredibly fixed model, plus more money to pay for features. Typically in a 5-7 year period, you could have two hardware upgrades. All in all a very large capital injection into the life of a system. Then you have an army of people to help keep maintaining that platform.
The bigger issue is that in an organisation the contact centre is an internal supplier so there are internal customers – it could be marketing or customer service or someone else. There are lots of changes happening in whatever industry vertical they are in; they want to be responsive to drive campaigns etc. They are continually pushing the contact centre manager to do new things. However the manager is completely hamstrung by this locked-down monolithic infrastructure that he bought some years ago. Both a cost and CAPEX- OPEX argument, but a bigger argument is the internal value benefit by having a contact centre infrastructure that is responsive to business needs.
CBM: What are the perceived barriers and how might they be overcome?
SO: Contact centres are mission-critical so the infrastructure cannot be allowed to fail. So companies have concerns about resilience and security.
We need to understand what their benchmark is, and the on premise site may be constrained by physical assets or IT skills in the organisation, or money. It’s rare that the organisation will have built a full disaster recovery geo resilient infrastructure.
We have built this using high availability architecture incorporating Vmware to create extremely high availability – full resilience in the data centre and then mirrored in a geographically separate data centre. This is then sat in the same location as our IP Voice switches. All within our own domain – no third party components. Its’ a highly secure environment.
Something could be built very well but in only one data centre, or two data centres but with no geo-resilience. Or built with geo-resilience, but relying on internet connectivity. There are very few cloud providers able to emulate this end-to-end secure and resilient approach.
Secondly it’s an Avaya branded solution. The channel partner is able to market that as well as it being underpinned by the BT infrastructure. Thirdly it’s a strategic sale where the provider can differentiate and become a strategic communications partner for that enterprise.
The proposition is modular, within the core you can pick from a menu and then there are also a lot of additional services that sit around the product such as access network, end point devices, network CPE, in and out bound calls as well as CRM apps.
We have built this so users can buy all these services from BT Wholesale or self-provide. The proposition allows the partner to be flexible and differentiate.
CBM: What are the benefits – how and where can partners make money?
SO: Our proposition delivers good quick margins for resellers – it’s a purpose designed wholesale proposition, it’s not a retail service shoe-horned into the indirect channel.
If you look at channel partner business today, they tend to build it around professional services – good gross margin but having to cover costs of people. Most of the gross margin is eaten back by people costs. One of the interesting things about cloud deployment is that you can sell and deploy and get strategic revenue from the cloud much faster, monetised quicker, with far less people resources. Most of the margin will then flow through to the bottom line, with very significant cash flow uplift.
In summary, we have created an innovative, flexible commercial model based entirely on utility usage. Not being shrink-wrapped, we have given reseller partners the keys to the bridge. It’s as if they have their own commercial platform, and so they can price as they like and the flexibility to price in very creative ways.
CBM: What is the next step for resellers?
SO: Speak to us. If you are Avaya accredited and a BTW customer, please contact your account manager. If you are not a BTW customer, then call into your Avaya team and then they can help introduce and establish you to BTW.
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