UCaaS Channel Building

UCaaS Channel Building

By Dave Michels April 4, 2013 Leave a Comment
Dave Michels JPG
UCaaS Channel Building by Dave Michels

Hosted voice has been quietly evolving. Vonage quickly became a household name in the early 2000s, but businesses were slower to embrace the cloud. It did not start to build traction until probably around 2005, slowly growing and evolving into unified communications as a service (UCaaS). Most of that was accomplished through direct sales. That is, most providers didn’t get serious about indirect channels until about 2010 or even later.

Suddenly, it’s channel time for UCaaS. Three big drivers are: low hanging fruit disappearing, major carriers are embracing hosted services, and the premises-based firms finally figured out the cloud. This post is about the last factor.

Hosted services represents a major business model shift from traditional equipment sales. Most premises-based vendors were pretty cautious with hosted services - probably hoping it would blow over. That hasn’t happened, so it has become necessary to join the fray. But how? A direct hosted service model could compete with both current premises-based sales as well as create channel conflict. The goal needs to evolve the business model without prematurely hurting the current business.

The following UC vendors are directly hosting UC services:

* Indicates service was launched or rebranded less than 15 months ago.

Another vendor strategy is to sell UC products as infrastructure to cloud service providers. This is what Cisco has done with HCS. Avaya and Mitel also have similar models. (There’s also the flip side of this approach where BroadSoft offers its service provider solution to enterprises through an arrangement with Aastra.) The service providers, which are increasing in quantity and size, are also developing distribution channels.

The rapid increase in channel activity is noteworthy - suddenly all the traditional UC VARs, as well as a slew of other influencers (IT VARs, insurance agents, accountants, etc.), are being courted to add UCaaS to their portfolios. The premises-based channel partners are the prime target. They already understand UC, and have probably been selling against UCaaS. Add in the trusted advisor status they wield, and they become quite the coup for hosted service providers/vendors. The “convergence” is happening both ways too – some cloud-only partners are getting into premises. ShoreTel recently announced many of its longtime M5 partners are now certified to resell ShoreTel equipment.

The premises-based vendors have some advantages in recruiting their channel partners to sell cloud. Cloud isn’t for everyone, so having a full portfolio (with the same endpoints) can be attractive. The combined purchasing power of hosted and premises-based solutions (and endpoints) can result in improved vendor commissions and discounts. In some cases, a single vendor’s solutions allow customers to migrate between deployment types. NEC and Mitel are even enabling hybrid (premises/cloud) solutions.

It is fascinating to watch this transformation as the premises-based camp flips from cloud laggards to advocates. NEC, Digium, and Mitel are incentivizing their channels to embrace hosted services with channel-first strategies. As noted, it isn’t just the premises-based vendors either. UCaaS service providers and carriers are also recruiting channel partners.

The hosted channel model is still young, but it is clearly the direction the industry is heading. It’s a different business model for the vendors as well as the VARs. So while VARs will be happy to see sales shift toward indirect channels, transitioning from products to services can be tricky as dealers need to revisit transaction economics including margins and commission plans.

 

No Comments Yet.

To Leave a Comment, Please Login or Register

UC Alerts
UC Blogs
UC ROI Tool RSS Feeds