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Business Opportunities in the UC Channel - Part 1

by Russell Bennett, UC Insights

March, 2012

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This is the first of an 8 part weekly series of articles that leads up to the UC Summit 2012 that will take place May 6-9 in La Jolla, CA.  See the UC Summit website for more details.

I attended last year’s UC Summit and I heard a lot of anxiety from the channel executives about increasing challenges in the telecom channel, including:

  • Eroding margins

  • Competition from vendor sales teams in their accounts

  • Lack of understanding of the role that the channel would play in the UC era

I recall thinking: “Well, that’s great – you have come to the right place to meet the new leaders in the communications space and to learn how you can re-launch your business to address the new opportunities in UC”.   On the other side of the fence, I hear lots of UC vendors saying how they are disappointed by the channel uptake on unified communications and that this is potentially impacting the market adoption rate for UC systems.  These two points of view are clearly at odds with each other, possibly born of a lack of mutual understanding.  So, in the run up to the 2012 UC Summit, I thought it would be useful for me to lay out my perspective of the opportunities in the UC Channel and how existing telecommunications resellers can leap upon an, as yet, undiscovered pot of gold at the end of the UC rainbow.

Rather than lay all that out in a single paper, I plan to cover this in 8 parts, approximately 1 per week:

  1. Overview & Project Management (this paper)

  2. Vendor Selection

  3. Migration Strategy & Legacy Integration

  4. Bandwidth Planning and Branch Strategy

  5. Route Planning and Directory Integration

  6. Disaster and Failover planning

  7. Network Edge Security, SIP Trunking & Federation

  8. User Training

Overview & Project Management

In terms of the overall opportunity, the migration of your business to becoming a UC ‘value added reseller’ will be dependent more on the ‘value added’ rather than the ‘reseller’ aspect.   Whatever margins are on offer from the various UC vendors, they are going to be considerably less, in absolute numbers, on a per user basis purely because UC is so much cheaper than a PBX.   My colleague, Marty Parker, has a lot of hard data on this, but the ballpark costs are coming in at 50% or less for UC than for telephony.   So the opportunity isn’t in the markup, but in the upsell; and if you are doing the selling, then the upsell is yours for the taking.

As a technology in the ‘early adopter’ or (maybe) ‘early majority’ phase of the technology adoption lifecycle, UC is new to many people; and that is a major opportunity by itself.  Companies and IT groups who have no deployment experience are looking for providers of that experience and for knowledge transfer.   All of the topics listed above are distinct areas of domain expertise that will attract premium rates.   If you look on LinkedIn in the UC discussion groups, you will see that they are flooded with job adverts for UC architects and deployers.

Clearly, therein lies a challenge: how can you re-skill your company for UC if people with UC experience are such a scarce resource.   The old ‘no experience, so no job’ conundrum can be resolved by initiating a UC deployment within your own company and learning as you go.  Furthermore, the UC vendors typically have programs to train and empower the channel.   UC isn’t so much a new set of technologies as the amalgamation and evolution of existing technologies, so your existing team can be retrained and will, no doubt, welcome that career-development opportunity.

In terms of UC migration and implementation project management as a business opportunity, it may be tempting to believe that IT departments, by their very nature, are full of competent project managers.   While this may be true, as discussed above and over the next 7 weeks, a UC migration is not an everyday occurrence.   The company I worked for during its transition to UC had 800 PBXs to retire and 3 new data centers to spin up, along with the integration of email, voicemail, PSTN, video conferencing – the list goes on.  This is not a trivial undertaking that a hard pressed IT staff can add to its ‘list of things to do’.   If you think back to the Y2K era, when systems integrators made enormous amounts of money helping customers through another major technology transition, the size and scope of a UC migration project starts to become apparent.

I have some hard data on UC deployment across 355,000 companies world-wide that indicates that only 3% of companies have deployed UC.  However, the Fortune 500 UC deployment rate is over 33%, so there is a positive deployment trend.  The good news is that 97% of your customers are going to need your UC deployment services sometime in the next few years.

In the next installment, we are going to examine the opportunity to assist customers in UC system/vendor selection.

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