We are starting 2015 with a look at what our distributors are up to in the market; what they believe the hot applications will be, their observations of trends and how they are reacting to cloud and hosted based deployment models eating away their CPE business.
For channel resellers and VAR’s it is difficult to keep up to date with distributor activity. In the main most resellers deal predominantly with one or two key distributors, often with limited portfolios, but are then not fully aware of what the other players may have to offer them.
Speaking to a wider number of distributors we asked them questions we knew resellers wanted answers to starting with:
What you consider are likely to be the hot products and applications for 2015?
“We will be targeting the Mid-Market Opportunity with Avaya’s IP Office and Radvision. There is a huge opportunity here for existing partners and net new partners, and we are encouraging them to sell the entire stack of voice, video and networking to increase revenue.
Secondly, Skype For Business where in the first half of 2015, the next version of Lync will become Skype For Business with a new client experience, new server release, and updates to the service in Office 365. We believe that Skype For Business will again transform the way people communicate by giving organisations reach to hundreds of millions of Skype users outside the walls of their business. Westcon will be developing its ecosystem around the Lync deployment, which is an area of growth for resellers.
Thirdly, Extreme Data Networking where Westcon looks forward to another successful year with Extreme Networks, and welcomes the opportunities ahead working with the newly combined organisation and the opportunities it will bring.”
Vincent Leahy of Manchester based Trust Distribution, where 80% of their sales are generated from PBX, and are made up from the NEC, Mitel/Aastra and Panasonic brands, says that they have witnessed over the last 12 months these and other brands extending the functionality of their products.
“There has been no radical change in the PBX over the last year; rather the changes have been made in identifying and addressing key or specific vertical markets with applications where user productivity can be enhanced.
This has been true of Mitel with their MiVoice Office 250, MiVoice Office 400 (formerly Aastra 400) NEC recently launched the new 9100 series along with Panasonic releasing the eagerly awaited NS700 product at around the same time.
Going forward Panasonic will be consolidating their system product range and set price points that should prove successful in the very competitive SME market.
With each of our brands success can be found by identifying vertical markets to target. We were once famously described as a nation of shopkeepers and in many ways that sentiment can still hold true today. Businesses want simple solutions that help them with their basic needs – such as communications. With the growing trend for business to have home and remote workers applications such as mobile to voicemail and mobile twinning are finding success as today this increased mobility for an organisation is seen as a key attribute that delivers competitiveness.
Another driver for change has been presence but for many users, especially SMEs, the cost of deployment has been too high but now, with applications from third party OEM suppliers such as Kelmar, who work very closely with NEC as well as directly with ourselves, that cost element should no longer be a barrier for resellers.
Likewise the Xarios Phone Manager is now an integral part of the Mitel platform with its own Mitel part number. This has proved a popular application with many resellers asking for the product as a feature set with which to spearhead their sales approaches. Once installed the Mitel/Xarios application can lead to margin rich upgrades downstream for the resellers as well”
Darren Garland, Managing Director of ProVu, says they are due to see a number of new products arrive in 2015, at the top end of the SIP phone market and a convergence of SIP phones and tablet type devices to allow the phone to become a device to control other applications such as access control, music, concierge services etc.
“The battle for the high volume low price end of the SIP phone market continues at a pace, we predict this will continue through 2015 with a number of vendors continuing to reduce price or launching basic models to try and gain market share in this space.”
Richard Carter, Group Sales & Business Development Director at Nimans believes that Wireless LAN will be one of the biggest growth areas this year, along with Machine to Machine connectivity, low cost video conferencing and hosted services.
“WLAN is here and now. It’s one of the most exciting areas of our business. There’s 25% year-on-year industry growth – according to the figures I’ve seen from one leading manufacturer – and it’s already larger than the PBX market which illustrates its current value and market stature.
In the years ahead it will become the norm in SMB businesses so there’s tremendous sales potential for resellers to exploit – backed by our in-depth support and expertise. Most small businesses do have a Wireless LAN but they don’t tend to be very good and often they still use traditional plug-in cables. The technology being developed now is very high performance and capable of transmitting much further, much faster, providing resellers with a great sales platform to build on. People will no longer be plugging in equipment with cables. Those days are disappearing fast.”
Carter says general industry trends will see hosted services continue to grow, with the standard PBX ‘holding its own’. He pointed out: “Machine to Machine intelligent devices is another area resellers should be aware of. We are already starting to see interest accelerate, alongside hosted services. Our own GS-hosted voice platform for example has been a resounding success since its launch last year and continues to grow month-on-month. The sky is the limit.”
Steve Harris, Managing Director, Siphon Networks, believes that cloud-based unified communications (UC) will continue to grow significantly throughout 2015.
It’s easy to say once again this year, but Microsoft Lync should also experience a surge in uptake, particularly as its continued evolution and enhancements make it a genuine and viable substitute for the IPBX. Lync still remains the most economically feasible on-premise solution for the mid-market and larger enterprises, whilst small IPBX’s and cloud-based UC are successfully gaining footprint within the SME segment.”
How do you think the market is evolving and what has changed in the last 12 months?
Trust Distribution is quite unequivocal when they say that consolidation ‘just had to happen’.
Vincent Leahy, “In the last 10-15 years there was no doubt that the PBX market was oversubscribed in terms of the number of vendors and products available. We have had first hand experience of Mitel and Aastra and who knows what will happen at ShoreTel. But overall this is good for us as it enables Trust to focus very clearly on a tight portfolio of vendors, all of whom are keeping their products up to the market with new features and applications.”
With Panasonic launching a very good looking NS700 product it’s inevitable that their TDE and NCP product ranges will be declared ‘end of life’ which, together with the NS1000 will represent a far better channel proposition for the vendor as the recent launch has seen the NS700 take off better than anyone predicted.
Tony Nevill at Westcon says he has seen an increase in complex multi-vendor deployments driven by end-user demand. “Our partners and vendors are coming to Westcon to ask us to build a solution and to be included in the jigsaw of multi-vendor implementations.
This is a big change in the market where vendors are asking to be included in a solution that requires competitive technology – this certainly wouldn’t of happened five years ago! However, vendors are supportive, and they acknowledge that they don’t always have all of the products for a given solution, which is why they work closely with us across our Solution Practices to meet the customers’ requirements.
Over the next few months Westcon will be identifying and leveraging opportunities arising from our recent restructure and acquisitions. The Solution Practices are Centres of Excellence so it makes sense to leverage that across the group; identifying opportunities and supporting resellers with seamless end-to-end solutions.”
Darren Garland at ProVu, “We have watched with interest this year as a number of distributors have entered or further extended their propositions to offer connectivity to sell into their customer bases. ProVu have made a conscious decision to not offer competing services with our service provider customers that supply connectivity into the channel, time will tell if we have made the right call.
We are seeing demand for more webinars and on line resources, to that end we have stepped up the number of on line webinars we are doing on our products and have developed our first on line technical product training course with more to come in 2015.”
How are distributors coping with the trend towards cloud based applications and services?
Darren Garland at ProVu, “We have launched a number of cloud based products in 2014, mainly in the UC space with products like the Counterpath Bria for SaaS and the Opticaller Application. ProVu’s provisioning and ordering portals have been available through the cloud for a number of years including the ability for channel partners to pull pricing, stock availability, product information and images. We are seeing a number of service providers building this functionality into their online ordering portals. We believe that our cloud related sales will grow significantly this year.”
Will Morey of Pragma Distribution believes the confidence in the market has changed with end users customers recognising the need to invest and seeing real opportunity to transform their business using technology.
“Resellers have responded to this with a better understanding of what it takes to win and retain a new customer. Pragma have worked with resellers to help them really understand the needs of their customers and of vertical markets and deliver winning solutions that go beyond simple voice and connectivity.
UC technology is better understood as end user customers are starting to embed processes, working structures and people into their business who can make real use of this technology. The increasing impact of Gen Y on the work place very quickly impacts technology use. As more Gen Y users join the work place and move into decision making roles collaboration technologies and the associated flexibility to remote or home working practices are pulled through.”
How are distributors responding to the trend towards cloud based applications and services?
David Galton-Fenzi, CEO at Zycko, says more and more vendors are developing cloud-based alternatives of their traditional product lines to address the growing demand for more flexible (in terms of volume and cost) options.
“This is likely to encourage more widespread adoption but initially in smaller volumes, with the aim of scaling as requirements change.
Hybrid architectures are also likely to change the status quo as end users look to develop cloud computing alongside their on-premise IT solutions. Analytics-driven architecture will also play a large part in this as organisations look to retain control of their estates.
As the allowance for downtime is almost non-existent in today’s 24-hour business culture, next generation network management and analytical tools that allow seamless end-to-end real time QoS are also likely to grow in popularity in the near future.”
Richard Carter at Nimans “We are very much on the front foot with hosted and continue to develop new products and services. GS-hosted was our first foray into this area and demand for this ground-breaking voice platform has exceeded all expectations. It offers upfront or recurring revenue opportunities, or even a combination of both. GS-hosted includes a free three-year hosted seat licence (worth £360) with every handset purchased.
On the back of this we are about to launch Microsoft hosted which offers much more than just traditional Lync functionality. Low cost video conferencing via the Cloud is also gaining great traction and will continue throughout 2015 and beyond.”
Vincent Leahy at Trust Distribution recognises both the threat and the opportunity presenting itself to resellers and their own organisation.
“There has been a lot of hype said and written about the cloud over the last few years but there are a number of observations we would make from the coal face.
We believe it is a myth that cloud based alternatives to CPE solutions save money. Of course there is less of an up front cost element with cloud but in the longer term the cost is higher. We see flexibility of supply and scale as being the key benefits for cloud solutions and believe that hybrid cloud/CPE solutions are more likely to the future deployment models for business.”
Trust considers that there will be two key events that could trigger a much wider uptake of cloud-based applications in the channel.
“Firstly Resellers need to deploy the very different type of sale into their business model and end users need to get used to the subscription model, as consumers have done already with mobile phones and TV subscription bundles. When users are happy with the concept for business it will start gaining traction. Likewise, in the PBX market many users are looking for a lead from BT; when they start selling cloud or hosted telephony with commitment then the independent suppliers and resellers will follow suit and Trust will be there to help resellers with offerings from Mitel and Panasonic who are shortly to announce their offerings for the SME in the cloud/hosted market.”
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