Jeff Valentine, Executive Vice President for Products and Corporate Development at Fonality, explains why only one in five firms have moved to hosted telephony and what resellers can do to improves sales opportunities.
Comms Business Magazine (CBM): In your opinion what is the state of play with hosted telephony in the market in respect of user acceptance?
Jeff Valentine (JV): I describe the situation as ‘cloud aware but not committed’. People understand there is a better alternative to traditional phone service, but despite the clear advantages just one in five businesses today has chosen a hosted telephone system. There are three reasons for that: force of habit, trust, and inaccurate perceptions of Voice over Internet Protocol phone service for businesses.
Force of habit and trust go hand in hand. Traditional phone companies have had more than 100 years to build trust with customers. We’re newer and less familiar, thus inherently less trusted. Another negative for business VoIP providers are customer perceptions formed around consumer-grade offerings like Skype and Vonage. So, cloud-based VoIP providers face three main challenges to attracting business clients:
Educating potential clients about the reality that business-class VoIP is more reliable and offer advanced communication features than many providers of consumer VoIP.
Convincing potential consumers that their service is optimised for the best possible user experience, not the lowest possible cost.
Demonstrating that they can deliver telephone-quality voice and sharp streaming video in a package that costs substantially less than standard telephone service.
Despite the challenges, I believe that in 15 years there will be no more non‑hosted business phone systems. Everything will be hosted as a service. Knowing that we’ll eventually get there, the only question is which providers will convince customers to take advantage of the upgrades of hosted VoIP. Many are asking for systems that include an onramp for customers to try hosted before they connect to it. Fonality’s hybrid hosted solution is just such an onramp, as it gives businesses the ability to leverage VoIP without giving up their traditional phone line.
CBM: Do you think the Channel has fully embraced the hosted telephony deployment model? Is anything holding back resellers?
JV: The benefit for a Channel partner evolving their portfolio towards hosted/cloud-based solutions is relatively obvious. With the initial revenue stream generally lower, offering a service versus a one-time purchase, partners are able to make more money throughout the life cycle of customers. While I believe the channel has fully embraced the shift towards cloud-based telephony, there will continue to be the need (and business case) to support those customers who’s business is best served with on-premise communication systems. Certain tiers of resellers will struggle to shift their business model in order to support this new level of available cash, which in some cases will lag adoption.
CBM: Are resellers sufficiently skilled to deliver hosted services to end users? What more can could they be doing?
JV: Absolutely. Whether its hosted telephony or managed services, resellers (or even IT consultants reselling hosting products) have been providing these types of services to SMBs for decades. They are well versed in providing the necessary network infrastructure, working with Internet Service Providers, and application integration necessary for a successful hosted telephony experience.
Resellers should continue to review the financial opportunities of a monthly revenue model in an effort to provide equal footing for both hosted and on-premise communication solutions when consulting for an SMB customer. In other words, don’t let the financial impact of the different deployment models impact your consultation in choosing a business communication system for the customer.
CBM: Can you provide a brief checklist of what SMB’s are looking for from a supplier and their service?
JV: I think SMBs are looking for a company that has grown beyond the phone call. A lot of companies can do phone calls, but businesses need the ability do more. They need unified communications and all that entails: phone, data, video, collaboration. Of course, as long as people talk on telephones, calls will be a key component of VoIP, but the best providers understand calls are only a part of the equation.
Second is trust. A VoIP provider must be willing to earn customers’ trust by understanding their needs and providing VoIP services that are specific to those needs. Trust often stems from transparency. Are contracts easy to understand? Are outages resolved quickly and discussed openly?
Third, a provider has to have a track record of helping small businesses add high-end communication features that make it easier for everybody in a given sphere of business — customers, employees, vendors — to stay in touch.
Finally, they want a company that gives them options. A hybrid hosted offering like Fonality’s gives customers deployment flexibility so they can make certain VoIP is right for them and their business.
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