The Rise of OTT Apps

The way we use our phones has undoubtedly changed over the last decade and communications in our personal and business lives is now split over a number of different services. Facebook, WhatsApp, Skype, among many others dominate the communications market which has left the operators with eroding profits and a major headache. What about the Channel? Does the Channel have a part to play when it comes to apps? David Dungaywent to find out.

screen-shot-2016-10-03-at-16-27-12If you use a smartphone in your work life there is a pretty decent chance you also use several apps to go about your daily business. A quick tally from my own app usage indicates that I use between six and seven apps on a daily basis just going about my regular work day. Some of these are obvious business orientated apps like email but increasingly I find myself using consumer style apps just to communicate with various members of the industry. In fact, although email is the focal point of much of my day it has become far easier to use one of the several messaging services to keep in contact with people. It’s quick, easy, no junk filter to avoid, and in the main people are far more responsive than they would be via email.

We asked key members of the Channel what thought the major use cases were for apps in business.

Todd Carothers, CounterPath’s VP of Sales and Marketing “The major use cases for apps in business deal with the intersection of business workflows into communications. Enabling sales professionals to not only receive calls but enable the context of the call to be integrated with the CRM solution is an example case, as well as being able to escalate communications with customers from text to voice and back again.

However, the Enterprise OTT is the only solution category that enables this use. It ties it to the business workflow by enabling collaboration with disparate groups of users without sacrificing the features available to the group. It enables employees from different companies to contribute to projects as if they worked in the same company.”

John McKindland, Head of Solutions Sales at Nimans, added “The use of apps in business continues to grow. Collaboration is a key driver and with ever more diversity these trends will only accelerate. Clearly the mobile phone is king but different people use apps in the workplace in different ways. I use it for social media, instant messaging and will make calls through our new office phone system – once it’s been installed. Other people use LinkedIn etc. Right now from a distributor point of view we are seeing voice applications through an app on a mobile as the most popular service.

I think the lines between the consumer and business world are blurring and that line will eventually disappear. With BYOD we are seeing consumer apps being brought into the workplace in increasing numbers.”

Nolan Braterman, Chairman of App2Chat, commented “Through our own research, ahead of the launch of App2Chat last year, we realised that many business owners felt tied to their desk by the traditional desk phone systems, so we developed an app that provided them with the same service on the move.screen-shot-2016-10-03-at-16-27-39

The apps used by smart devices have also become useful for teleconferencing with the rise of solutions such as Skype and there are now many businesses using apps to manage their business either through online accounting or record keeping of invoices and receipts. So there is a definite market for apps out there, it’s just all about finding the right niche.

This emergence of business apps is a result of owners wanting the same services provided in an office, while on the move. The best apps improve efficiency, help with employees work/life balance, enable remote working and reduce office costs.”

Developing Apps for Customers

In the main, resellers haven’t really got into developing apps for customers yet. Whether this is through simple lack of knowledge or a perception about the mark it is not clear. We asked our experts if they thought there was an opportunity for resellers to develop apps for their customers.

Todd Carothers, CounterPath’s VP of Sales and Marketing, said “Yes. This can be achieved with supportive APIs into products and solutions. This enables resellers to provide more value to their customers by creating new solution augmentations or finite adjustments than meet even the most stringent requirements.”

John McKindland, Nimans’ Head of Solutions Sales, commented “At this stage I think software developers hold the advantage in creating apps. For us, we are not seeing large numbers of resellers joining the party. It can be a laborious, time consuming and expensive exercise that may not generate a big return on investment. There are lots of hoops to jump through and factors to consider.”

Dom Ferkin, Director of Salpo Technologies, disagrees with McKindland. He commented, “Resellers may not like the thought of developing an app as it’s a bit out of the ordinary for what they’ve been used to but there is massive opportunity for them to increase their revenue and margins through app development.

screen-shot-2016-10-03-at-16-27-30As well as our own product suite, we help resellers to do this by offering outsourced development at very competitive rates. We work with resellers to help scope the project and even meet with their client to help define the requirements. We can then give them the development costs and timescales through our outsource programme, leaving the reseller free to agree a commercial deal direct with their client, and with our rates they can make an incredibly healthy margin. We will even project manage the development for them and liaise directly with the client if they are happy for us to do so.

Not every reseller wants to go and build their own development team, and having done this for quite some time I can understand why. This is why outsourcing the development at wholesale rates and putting their margin on to the overall deal is an ideal way for them to add another string to their bow and increase revenue and margins exponentially.”

Shanks Kulam, Co-founder and CMO of x-Mobility, thinks expecting resellers to embark on the tricky road to app development is not realistic. He says, “As it’s now about land grab, expecting resellers to develop their own App is both a big ask and non- core to their business. The least path of resistance would be for resellers to take an existing, proven and non- beta white- label service to their customer base. Thus allowing them to gain some experience and start to gain revenue, as well as further differentiating their offering in the market place.”

Consumer Impacts

Many of us who work in smaller companies have taken to consumer grade apps to get our jobs done more efficiently. Although these may not be specifically designed for our roles they are often adopted because of their functionality, ease of use and their cost, which is mostly free. However, is the consumer app space impacting the reseller landscape?

Nolan Braterman commented, “Almost certainly, there are so many apps already on the market and many more in development that fulfil the services once sold by ‘traditional’ resellers.

They [apps] are definitely a disruptive force within the industry, but that is not to say that resellers themselves should be scared of them. Instead they should take an active part in their success through doing their research and taking the plunge. In this way they can hold on to their share of the market, instead of being pipped to the post by their competitors.

Staying still and hoping for the best is not a strategy that you can rely on, you need to be constantly innovating and improving your services – and apps have a large part to play in this. “

Carothers added, “Not directly, but it’s certainly having an impact. Consumer OTT applications are being used in small to medium businesses because they are free. However, they do carry risks and feature degradation from a business point of view, which is where Enterprise OTT solutions such as CounterPath’s Bria + Stretto come into play. Solutions like this provide the features of consumer OTT applications but in the context of the enterprise, supporting the necessary security and ecosystem requirements. Enterprise OTT is a newer category that will enable resellers to make a significant impact to their customers.”

Getting the right approach

When it comes to deciding to get into the app landscape there isn’t a one size fits all approach. Resellers will have different levels of understanding and/ or propensity to learn about technology which could be far removed from what they are already doing.screen-shot-2016-10-03-at-16-27-23

McKindland believes there is a lot of opportunity surrounding the white label app space. He said, “There are a number of ways that resellers can white label apps and this is where a lot of traction is currently being generated. Apps create a lot of potential but careful consideration is needed.

The market is dominated by big players which makes it harder for a reseller to steal their thunder. Resellers need to also be aware that their own skills sets may be limited which can curb activities.”

Carothers believes resellers shouldn’t be stepping too far away from their comfort zones. He commented, “The significant opportunity is in integrating apps into what they [resellers] are already selling. Enterprise OTT is a perfect fit, but other applications that drive the user productivity and cost savings and leverage what enterprises already have is a clear winning strategy.”

Braterman added, “Those providing apps have realised that IT and data resellers offer the best opportunity for the app market, as they better understand the technology behind apps. This has given them a near-monopoly on the market, which ‘traditional’ telecoms resellers are yet to catch up with.

However, focusing on the development or management of an app can pay dividends when it is done right. Just launching an app on to the Google or iOS market and hoping for the best is not enough.

This hyper-competitive market place is already full of competing ideas, so it is important that you make your solution stand out from the crowd. “

Long term thinking

If you are reading this wondering whether getting into apps is a good idea or not you are probably missing the wider picture. According to Dom Ferkin app development isn’t just a handy value-add, it’s a window to expand your business into previously undiscovered verticals.

Ferkin commented, “Once the product is developed, assuming IP isn’t an issue, then a solution that fits well into a vertical that the reseller has a large presence in, can open up a licence revenue source where they charge on a per user/per month basis. This is very appealing to resellers who grow based on recurring revenue and the margins tend to be a lot higher than traditional comms revenue.”

“The additional opportunity is the fact that this technology can span all verticals and flex to meet the client’s requirements. A lot of resellers work to target a couple of verticals, but by having a digital offering that can work with all verticals, will open up more opportunities for them to sell the solutions into new clients.

We’ve already seen exponential growth in the IOT space and that is only going to grow further, and resellers don’t want to miss out on that. Using off the shelf or bespoke app solutions hand in hand with IOT can help embrace the client’s requirements and give the reseller a whole new revenue stream, which is how we will continue to see exponential growth throughout the channel.”

Braterman added, “For those willing to put the work in, apps and solutions can provide excellent opportunities, but for those thinking that simply having an app or solution will improve their standing are likely to be disappointed.

Just being innovative is not enough, you must be able to sell this innovation to businesses – many of whom have a very entrenched idea about the delivery of services and solutions. “

Ed Says… Don’t ask yourself whether you want to do apps or not, that isn’t the question. The question is do your customers need apps to go about their business and do you want to discover new streams of income from different market verticals. If the answer is yes, then you need to look at how you can leverage apps to get you there. I personally think that the Channel is currently ripe for a wave of digital disruption, and apps will undoubtedly have a part to play in that. As the IoT markets continue to gather momentum apps could become the focal point of many businesses in the future also. It is also worth thinking about the impact of services like WhatsApp, that now have voice calling, on your business. The more business users insist on using these platforms the more calls will slip through free of tracking, call recording or other compliance services. It’s important to guide your customers through their OTT activities and advise them accordingly.

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David Dungay

Editor - Comms Business Magazine