The $29 billion UCaaS journey
The last decade has witnessed the demise of major telecoms hardware vendors that failed to adapt to the world increasingly dominated by software and services. Sahil Rekhi, EMEA MD for RingCentral suggests that the channel needs to take heed and embrace a future where collaboration and cloud based unified communication services offer new opportunities to build profitable value added relationships with an expectant customer community.
The journey to a service based business model has been a hard road for many vendors and channel partners specialising in telecommunications. What was previously a decade long hardware sales cycle with ongoing maintenance has switched to a continual engagement with customers keen to extract more value and features while scaling up and down to meet evolving business needs. Many vendors have failed to keep pace, with the mighty Nortel and more recently Avaya stumbling by the wayside.
The reality is that legacy telecommunications and vendors are at heart, hardware-centric or even hardware dependent. This market is also rapidly commoditising with no real differentiation and little innovation.
The conversation for service resellers with their customers has now moved on from just telecoms to that of the wider business benefit; it’s about productivity, it’s about efficiency and it’s about communication from the desktop and not just the desk. The biggest overarching theme is increasingly focused on collaboration and a demand from the customer to provide a fully unified experience regardless of location, device or communication method.
In a world of the app-laden smartphones and agile clouds; both customers and channel partners are seeking a better option. Looking at the example of enterprise software, almost every major vendor from Oracle to Microsoft has seen the writing on the wall and offered a cloud alternative.
The benefits are well understood and include reduced CAPEX, flexible licensing, continual feature updates and streamlined deployment. The rate of change is accelerating with analyst firm Research and Markets predicting that the sector will grow from around US$17 billion in 2016 to almost $29 billion by 2021 to account for almost half of the unified communication market.
This five year growth spurt is far ahead of the legacy hardware centric model and UCaaS natives including RingCentral and others have already adapted to support channel partners via two key initiatives.
The first is financial, by offering better commissions, greater non-conflicting programmes and options that allow resellers to manage deployments; partners generate both upfront one time revenue in conjunction with a hefty recurring revenue business model.
The second element is enabling collaboration through open technology and the use of more API driven platforms that encourage both resellers and ISVs to add more value through software integration. For example, RingCentral has enabled extensions into its platform that allow easier integration with office productivity suites such as Microsoft Office365 and Google Gsuite as well as sales automation platforms like Salesforce. From the ISV side, adding full telecommunication capability to cloud-based CRM platforms like Prosperworks enhances functionality and promotes team collaboration.
Yet the channel needs to consider the wider potential of dedicated collaboration platforms such as Glip which provides the foundation for multiple enterprise applications to integrate seamlessly into an almost bespoke workspace that customers are increasingly demanding.
For traditional telecoms resellers, the demand for unified communication and collaboration will start to bring them into a more profitable world of software while enabling new forms of value added sale and service that the legacy approaches were never designed to deliver.
For those partners ready to commit, the opportunities are bright and UCaaS providers, RingCentral included, are offering the training and tools to help with this transition. For the laggards, the past should serve as a warning that no vendor is too big to fail and over the next decade, it will be the agile that thrive.
The author of this blog is Sahil Rekhi EMEA MD for RingCentral
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