AS2005 draws to a close, the Ericsson Racing Team has started its assault on the Volvo Ocean Race in an ambitious bid to conquer the toughest of ocean going races. But this year, already, has marked another 12 months of success for Ericsson and its reseller channel in the UK. Jonathan Smith, VP Enterprise EMEA, looks back on the latest leg of Ericsson’s voyage to reseller sales success, and forecasts clear waters ahead for 2006.
Q. What has Ericsson’s involvement in the Volvo Ocean Race got to do with growing revenues in telecoms markets?
A. We’ve built our success to date on the principle of finding difficult challenges and overcoming them. Our approach to solving problems and achieving success is all about perseverance, teamwork, competitiveness, professionalism, responsiveness, using quality materials, and having respect for the environment we work in. You don’t grow a business in the telecoms industry without those attributes, and you certainly wouldn’t get a 70ft boat around 32,700 miles of potentially treacherous ocean without them either.
Q. Ericsson has also sponsored the event, providing a mobile portal with real-time mobile downloads worldwide. But where does mobility fit into the overall Ericsson enterprise strategy?
A. The Sony Ericsson consumer brand is synonymous with mobility, but voice resellers know us more for PBX systems like the BusinessPhone and MD110. The telecoms industry is changing though and the lines between fixed and mobile enterprise solutions are blurring. Fixed-to-mobile convergence (FMC) promises untold benefits and ROI, and resellers should be cautious that they don’t get swept away. Ericsson is excellently placed in this emergent market (a fact that Gartner and Ovum both support) with products such as Mobile Office and MX-ONE.
Q. If FMC is the biggest focus for Ericsson today, how do you see this market opportunity developing?
A. We’ve integrated mobility into every Ericsson product and application because we understand the enterprise customer’s mind-set. Fixed PBXs and IP-PBXs are reliable platforms that are here to stay because enterprises have built their businesses around them. We have led the market in extending PBX functionality onto mobile handsets: responding to enterprise demand for greater productivity from employees wherever they may be. As we move further towards this FMC market, traditional telephony partners will need to draw upon more data-centric skills. Converged solutions will increasingly manifest themselves in the server environment as the inexorable march toward IP continues. Our pure- IP offering – the MX-ONE – is a network agnostic, an open standards Linux-based IP server, extending mobile interaction from a fixed line platform. We launched the full version in August to much excitement amongst channel professionals, market analysts and end-users alike.
Q. What will the mobile operators’ influence be on FMC?
A. Already in Europe we have seen mobile operators adopting a flat-rate tariff approach to call pricing, and this could happen in the UK as soon as next year. The knock-on effect in places like Germany and Ireland has been to significantly boost enterprise adoption of PBX-driven enhanced mobility functions. Resellers should try and capitalise on this before flat-rate mobile pricing comes to the UK, rather than wait too late and have a competitor eat their lunch. Don’t concentrate too hard on what the fixed line operators are doing; keep a close eye on the mobile operators!
Q. You’ve also talked a lot about teamwork over the last year. How has Ericsson specifically been working with its channel to win business and sustain good margins?
A. We have a very strong hybrid IP-PBX story, and that is helping resellers overcome customer fears about infrastructure and services disruption. Gartner predicts that 70% of enterprises will be building hybrid voice solutions between now and 2010. That fits with our present sales activity, where 20% of our revenues are pure-IP sales with the remaining 80% buying hybrid. Customers don’t want an IP revolution to come and hit their businesses overnight; they want a predictable, cost-effective IP evolution to migrate with over time. We’ve been able to support the demand for this evolutionary approach with an innovative product-set, and have secured large deals alongside channel partners throughout 2005. Ericsson is helping its partners navigate the best passage through the challenges ahead, whether their customers want to renew, migrate or upgrade.
Q. What notable successes has Ericsson achieved as a result of this partnership approach?
A. We recently secured a large contract with Global Crossing to provide enterprise mobility solutions to the UK train operating companies. Mobile network operators are increasingly relying on us to satisfy their enterprise solutions, and use the expertise of our partners to deliver and support them. With the Global Crossing example, this has brought Thales, Nimans and Premises Networks Management to the table. Half a dozen more deals are in the offing, including hosted services contracts where the role of IP is becoming more prominent. We’ve won the iNode portion of BT’s 21CN project as well, which in turn will provide further opportunities for channel partners. The key driver for this is convergence.
Q. What else is on the radar for next year?
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