How to catch the bigger fish
Convergence is now seen as far more than just a cost-saving drive. To be successful in selling to large corporates, resellers should be able to demonstrate just what a useful tool it is for them, writes Mark Dye
Today, large companies, lured by the increased efficiency and cost-saving advantages offered by voice over IP (VoIP) and mobile technologies, are talking convergence. Many are looking for new ways to retain competitive advantage over their more agile medium-sized counterparts, and technologies such as convergence allow them to do this.
Indeed, the move to an IP converged network makes life easier when it comes to the remote management of business infrastructure, for example. For this reason, convergence is now largely accepted in this sector because the rewards are clear to all.
There are also other benefits. The move from analogue to digital is approaching quickly, so the enterprise market is keen on the adoption of IP. This is not just because of potential costs savings and low price of entry, but because such a move can prove a useful tool for both recruitment and retention of staff.
Other issues further the cause in the boardroom. One important factor is a significant increase in the demand for technology to support business continuity strategies that have emerged on the agenda following events such as the World Trade Centre attack on 11 September 2001, last year’s London bombings and the Buncefield fuel depot explosion.
In fact, the business case for VoIP is so compelling that VAR Logicalis estimates that about 40 per cent of medium to large enterprises are already in the process of implementing a voice and data convergence strategy.
According to Alison Brewer, solutions marketing manager at Mitel, IP convergence certainly has a role to play in providing flexibility so that communications remain constant, regardless of whether staff can access the office or not.
“This is really turning heads in organisations that want to ensure operations can continue from another office or home in the event of a disaster, bad weather or transport issues,” she says.
With voice-call costs, especially mobile, seen as a major issue in enterprise telecoms use, Rob Bamforth, principal analyst of service provision and mobility at analyst Quocirca, says that mobile and remote access is becoming increasingly necessary for a growing number of people in their working day. This is the case particularly for people whose employers are looking for a reduction in complexity and communications contracts.
Bamforth thinks this provides financial transparency, potential savings and simplifies matters for end-users.
“The other reason to make things more simple for the end-user is fixed mobile convergence,” he says. “End-users tend to use their mobile in preference to a fixed phone, even when sitting at their desk, because of the convenience of the address book. But the flip side of this is that the fixed phone is integrated into the PBX.”
Nigel Jones, marketing and business development manager at Alcatel, says collaboration is also creating further demand for convergence because of its ability to improve business processes. He points out that web-based collaboration tools, which support voice, email, data sharing and video, allow staff to gain quicker access to important information and colleagues from multiple locations and multiple devices.
“Given that staff in today’s organisations are more mobile than ever, and 38 per cent of the workforce typically uses five or more communication devices, collaboration tools are ideal for meeting the needs of today’s working environments by extending workspace beyond the office,” Jones says.
Of course, the ability of convergence solutions to improve customer service is another major draw for large corporates.
Jones adds that improving customer interaction through online communication, and intelligent call routing with CRM desktop integration, can also improve customer satisfaction.
Roger Jones, convergence business development director at Avaya, says that most large organisations are interested in IP telephony and fixed mobile convergence. This is because it allows them to centralise the key technologies and applications in their headquarters or a data centre before distributing voice and applications out to branches and remote workers over IP, or a mixture of IP and traditional time-division multiplexing connections.
“Centralisation brings economies of scale, centralised management and support, consistent features and functionality to all users,” he says. “Fixed mobile convergence takes this model and extends it out to mobile workers on a range of devices. In most cases this will significantly increase mobile-worker productivity and reach ability. In some cases it can also reduce mobile telephony costs.”
Robin Goad, lead analyst at Datamonitor, agrees. “Email is the most obvious area, but other enterprise applications such as salesforce and fieldforce automation are also gaining in popularity,” he says.
While the most significant early adopters are large corporations, Goad says VoIP is becoming mainstream. He points out that there are now more IP telephony systems sold than their more traditional counterparts.
However, this doesn’t mean major users of converged systems are always the largest companies. Instead it is businesses that have large amounts of knowledge workers that need access to information in real time for financial and professional services, and large field salesforces.
“Typically, resellers with a strong solutions background are more successful at selling converged solutions than the pure telephony players,” Goad adds.
The rapid emergence of new technologies means that it is often not practical for a business to have a single vendor supplying its IP convergence. Many businesses are reluctant to rip out existing technologies to upgrade their IT infrastructure. Instead, they prefer to have a gradual migration path, running systems in tandem before switching to the new technology.
Unlike desktop applications where enterprises tend to be a ‘Microsoft shop’ or ‘Linux house’, enterprises are less concerned about their core infrastructure coming from a single vendor, according to Brewer.
“[Large corporates] would rather have the best-of-breed systems, providing that they use open standards and can integrate with the rest of the network,” she says.
Many think it is the role of the channel to recommend compatible and cost-effective solutions so that instead of investing in a whole new system, companies can add new applications as they see fit. In this way, businesses will be able to invest in the best technology available, Brewer claims.
While the IP communications market is just reaching its tipping point, the industry itself has been around for at least 10 years. It appears to have justified its mature status because early adopters have been up and running for several years with the market now in acceleration mode.
Brewer says her experience at Mitel makes her confident that the market is ready to adopt IP convergence.
“Having evolved from a telephone supplier into an IP communications specialist, our customer list is a strong indication that it is not just the largest corporates that are generating demand,” she says. “It is organisations of different sizes across all sectors.”
Indeed, the argument for IP convergence in the enterprise sector is compelling. Most large businesses have multiple sites and a substantial mobile workforce and IP. Convergence allows for smooth, cost-effective communications in a world where tracking people down is becoming increasingly difficult.
As enterprises tend to focus on efficiency, it is not unheard of for them to look to their IT reseller for advice and recommendations about IP convergence, rather than doing the research themselves.
“The challenge for the channel is getting into a large organisation to speak to the chief information officer or IT director,” Brewer says. “However, the advantage of selling IP convergence is that the return on investment is easy to demonstrate, which will often loosen the purse-strings of senior decision makers.”
For some chief information officers, reducing the corporate phone bill will be enough. But for smart businesses the migration to a converged voice and data network will act as the catalyst for the implementation of other voice and data services to form the bedrock of future business.
Significantly, says Ian Cook, chief executive of Logicalis, these ‘enabling’ technologies do not require the complex or costly back-office and infrastructure upgrades of old. Instead, they are focused around the desktop.
“They are easy to use, easy to deploy and make use of the existing IT infrastructure,” Cook says. “In fact, in many instances they are actually already being embraced by the workforce.”
IP-based technologies such as instant messaging, for example, are helping staff speed up processes, break down barriers and ultimately do their jobs more efficiently.
According to the Economist Business Intelligence Unit, electronic tools such as email and mobile phones have improved employees’ ability to connect ‘live’ with others, which has encouraged them to become more flexible in their responsiveness as a result.
“The ubiquity of IP has made extending corporate resources beyond the work desktop, out of the office and into the home an attainable goal with very real business benefits,” Cook says. “Historically, complexity, security and cost have been the principle barriers to extending this flexibility beyond the office firewall. But with converged communications this no longer need be the case.”
But what of the software itself? Bamforth suggests that this innovative market contains plenty of tiny minnows, as well as big fish, which aren’t all swimming in the same direction.
He adds that dual mode – Wi-Fi and cellular – handsets and PDAs are starting to appear on the market and will probably fly in bigger numbers next year.
“The larger enterprises [and operators] can build VoIP backbones with powerful switching,” Bamforth says. “At the SME end, there are Vonage and Skype, and coming down to the mid-market are integrated packaged solutions, such as the recent Avaya platform.”
As large companies tend to be multinationals, there is also the “multi-geo” challenge, as Bamforth puts it. This will involve keeping mobile roaming costs down but in addition, there has been a demand for a single multi-country agreement and contract with consistent billing across different countries.
“This has led to acquisitions and the alliances of Starmap and Freemove, neither of which has been spectacularly successful,” he says. “Perhaps large enterprises like the idea of a single multinational contract, but when it comes to the reality, many decisions are still taken on a local basis.”
These companies may also have the fatter backbone network that can accommodate more converged services, but this means VARs then need to guarantee service levels.
Bamforth adds: “Who wants the VoIP sales department calls to be swamped by IP video conferences by the HR department doing interviews?
“Managing, controlling and streaming the converged applications are potentially more important to larger organisations because they may be pushing more and different applications over the same pipe.”
Alcatel’s Jones says that resellers selling into this space should already be equipped with the necessary skills for selling to large enterprises, in particular being able to tap into the specific business challenges of such organisations. Therefore, those that prove to be the most successful VARs should be those that can understand and illustrate how technology can be applied in the right areas to improve existing and new business processes.
Also, it seems there is a growing need to tailor solutions around each business on an individual level. This, in turn, places demands on the platform for a fully open systems approach, minimising any proprietary elements within the offering.
“The possibilities for mixing and matching technology to suit the needs of corporates are vast,” Avaya’s Jones says. “Resellers need to show more hesitant companies exactly how they can benefit them, without bombarding them with technology they won’t necessarily use.”
It is fair to assume that when telephony is part of the responsibility of the IT function, voice and data convergence solutions are an easier sell. If part of a solutions value is the impact it has on reducing office space, – mobile, flexible desktops, roaming, VoIP – then other departments well outside IT become part of the cycle.
“As much of the short-term value of convergence is based around cost saving, it is also a matter of making sure the finance director or department is in the loop,” Bamforth says.
This is important when articulating the business value.
“It’s not about convergence for the sake of convergence, and trying to sell a solution based on it being more elegant and simpler, because this doesn’t cut it with the finance director,” he adds.
Goad adds: “The main issue is to move away from cost arguments, such as converged voice and data systems reducing networking costs. The most successful resellers are those that can emphasise the business benefits, particularly those related to improved employee productivity.”
CONTACTS:
Alcatel (0870) 903 3600
Avaya (0800) 698 3619
Datamonitor (020) 7675 7000
Logicalis (01753) 777 200
Mitel (0870) 909 2020
Quocirca (01753) 754 838
Tiscali Business Services (0870) 740 0804