In the mid-1980s the government broke British Telecomm's monopoly and suddenly anyone could sell telephone systems to businesses.
Although some companies started up specifically to sell telecommunications most of the new suppliers of phone systems already sold office equipment (fax, copiers, furniture) and had decided to diversify. To a lesser extent IT Support companies also added telecommunications to their portfolios but they were more service-orientated than equipment and early set-backs with these products often put them off. When the market for telephone calls liberalised later in the decade the channel was really born and thousands of small local companies started supplying calls and lines as well as telephone systems. Some of the large indepedent telecommunications companies we see today e.g. Daisy, Alternative, Kcom were only made possible by the actions of the government.
Although nowadays most of us roll our eyes when we hear about another government scheme in the SME sector, they do occasionally throw up something that creates opportunity. Take for example the current voucher scheme. It was designed to help SMEs upgrade from broadband to leased lines by getting rid of the £3000 set-up fee. Of course by the time it was launched the industry had solved the problem themselves by amortising once-off charges over the contract period, however there have been spin-off benefits. Since the scheme has been extended to Fibre broadband, thousands of SMEs have upgraded and are enjoying super-fast connections to the Internet – often 20 times faster than they had before. They are now able to experiment with cloud computing applications ranging from online backup to hosted desktop and cloud voice. The interesting aspect to this is who is capitalising on the opportunity. Traditional telecoms dealers are struggling to take advantage because they don’t sell and support desktop services.
Regional IT support companies are emerging as the real beneficiaries of this government intervention. They have no legacy base of calls, lines and on-site phone systems to protect and they understand IP configurations, routers, switches, firewalls and portals. Their customers are super-loyal because they depend so heavily on their IT supplier and because they tend not to employ high-pressure sales people. They usually already manage their desktop and it is much more natural for an SME to trust an IT Support company to supply cloud-hosted solutions.
One final observation is that it seems the SME demand for a one-stop supplier has finally arrived. SMEs that remember when the only choice was BT were put off trusting just one company for everything but monthly contracts and transparent pricing have made SMEs more comfortable with going to just one supplier. Now that technologies have finally converged and everything really is IP there is no point in having both telecommunications and data suppliers tripping over each other. At the moment it is the IT support sector that is winning this growth business and it will be interesting to see how the telecommunications sector responds.
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