The difficulties of selling convergence products and voice over IP (VoIP) are numerous. During the conference call that announced the joint venture between Avaya and Extreme Networks, seven reasons for poor take-up of convergence were listed.
The missing reason was the lack of a route to market for converged products. At the channel level, we already know that marrying voice and data selling methods, business models and margin levels is a major challenge for any reseller involved in migrating to the converged nirvana.
In addition, EuroLAN Research recently discovered some interesting cultural differences that make the vendor's and channel partner's task even more challenging.
While interviewing more than 100 voice, data and 'converged' partners (those who sell both voice and data products) across Europe, including 66 companies that specialise in traditional voice products, EuroLAN found that:
- Typical telephony resellers have a relationship with an average of only 1.9 vendors, compared with the data reseller's average of six vendors;
- Forty per cent of telephony resellers work with a single vendor, and another 40 per cent work with two vendors;
- Among telephony resellers, the main supplier represented an average of 75 per cent of the company's total hardware turnover.
So what does this mean? Telephony-only resellers are accustomed to commitment, focus and dedication from one or two vendors. They have worked with these vendors for a long time and do not like to change vendor. Their business is driven by, and depends on, their relationship with the supplier.
Also, product changes are infrequent and rarely require more than a software upgrade for existing clients.
Networking VARs, on the other hand, typically deal with a flurry of suppliers to offer a complete and best-of-breed enterprise portfolio (networking adaptors, hubs, switches, routers, virtual private networks, security and other PC software solutions).
They are accustomed to different pricing, margin and reward models, training and certification programmes, marketing support structures, and business cultures. They are more agile in selecting and recruiting vendors for emerging markets. They are capable of reacting to new business models and up-selling new technology options to their client base.
For a telephony reseller interested in converged services and solutions, losing that dependency on a single supplier is attractive. However, it also means getting involved in multiple business plans, expensive certification programmes and radically new approaches to selling and marketing multi-vendor solutions. This is not easy.
For a networking supplier interested in recruiting new voice resellers to sell VoIP systems, it will take time and effort to effect the cultural changes faced by their channel partners. This is not what a vendor wants to hear right now.
Telephony suppliers should be aware that partners are loyal and dedicated, and rely on the supplier to strengthen their business. It would be a mistake to over-burden them with unnecessary certification requirements and programmes.
So, vendors, by all means drive VARs to the converged world, but do not lessen your commitment to them. And remember that resellers should resell and integrators should integrate.
Is the world ready for VoIP and converged products? It may be, but we won't know until the channel has evolved.
Keith Humphreys is managing consultant at EuroLAN Research.
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