Jola Cloud Solutions' Blog

The cost-of-living crisis is having an impact. Employees are worried about putting on their heating when working from home, and the rising costs of fuel travelling to the office. Many businesses are worried about how they will carry on with much higher energy bills. 

However, in a crisis, there is also opportunity. The opportunity for employers to react to challenges faced by employees by offering cycle-to-work schemes and cost-of-living bonuses. 

Demand for products such as mobile data is increasing as companies look to implement technology as a way of cutting costs. For example, councils are implementing smart street lighting and smart bin collections. 

Demand for smart meters is high, which creates mobile data opportunities for trusted channel partners to provide and manage. As companies look to cut costs, smart device-as-a-service solutions become more attractive with no upfront hardware costs and the ability to upgrade or switch devices as required. 

Jola has run a successful apprenticeship scheme for many years, allowing us to educate our new recruits on the needs of Jola partners and our unique products. Our team enjoy introducing new people to the channel, with a passion for customer service and developing their skills and experience.

At Jola, we look to match new roles to available courses in each department. We work with a specialist agency that helps us to recruit the right candidates for our roles and supports our apprentices to complete their training courses. The blend of obtaining educational qualifications at the same time as learning on the job works well for us.

Jola has worked with three different apprenticeship training providers over the years. Each one has offered end-to-end support from recruitment, and training through to successful course completion.  Courses are made accessible using a mix of online and face-to-face tutoring as well as on-the-job training and projects.

The courses provide an understanding of important concepts, which our apprentices use and incorporate into our business. The apprenticeship schemes help the whole company to evolve in a positive way.

Jola has been fortunate to retain most apprentices beyond their programme. A successful Technical Support apprentice went on to be employed by Jola as a Network Engineer, further developing their skills.

One of our school leavers successfully qualified at level 4 of the scheme. They are now the go-to person for all our current apprentices, assisting with project work.

New products

For end-user businesses, saving on upfront costs, flexibility and future-proofing are driving the as-a-service market. Many would prefer to pay monthly with no-upfront costs and the ability to upgrade as required.  XaaS is attractive to vendors because they can create MRR from what was previously NRR. This means the company is more likely to grow predictably and survive severe downturns. They can hire staff to support their growth without having to lay them off if orders dry up. COVID was a disaster for NRR/project-based companies whereas MRR companies in general were able to ride it out and without laying off/furloughing staff.

To meet this need Jola offers a range of intelligent, affordable 4G & 5G routers on a rental ‘DaaS’ (Device as a Service) model over multiple terms. DaaS also means faulty routers are dealt with on an ‘Advanced Replacement’ basis and hardware can be upgraded.

As A Service Model Evolving

As the Internet has become faster and more reliable, centralised cloud-based offerings have grown in popularity. Virtually anything can be sold as-a-service and this model benefits both end users and resellers. The pace of innovation has picked up and end users don’t want to get locked into obsolete technologies. For the reseller, the cost of servicing their customers is lower with aaS and recurring margins make their business more profitable.

Key Trends

A key trend driving the as-a-service model is the move to IP and the imminent PSTN switch-off. There are millions of single-call PSTN lines in the UK that are soon to be end-of-life. Upgrading to broadband is expensive and capital costs of converters and 4G routers soon mount up. Jola has solved this problem for resellers and their customers by providing everything they need, on one affordable monthly rental. Robustel and TPLink routers, plus Grandstream ATAs and ISDN-TAs, can all be taken as DaaS.

Key Benefits

Companies with high recurring revenues are more valuable than those relying on one-off sales. This was brought into sharp focus during the pandemic when companies with a high proportion of recurring revenues featured almost exclusively in Private Equity transaction news. Telecoms resellers saw their multiples increase while more traditional MSPs had to baton down the hatches and furlough staff.

For Jola partners, the DaaS OpEx model has many benefits over CapEx purchase, not least for cash flow. From the end users’ point of view, they usually have lower set-up costs and they pay over a period of time without having to sign a third-party lease. The monthly rental usually comes with a service guarantee, support and future-proofing (the ability to upgrade within the term). Suppliers who offer XaaS products to resellers remove the need for them to invest CapEx in stock.

Xaas products are ‘in-the-cloud’ and with little equipment actually, on the end users’ premises there is less to go wrong and by removing the need for engineers to physically attend site, service overheads are lower.

Telephone lines as we know them will not exist in a few years’ time and millions of end users will need to decide what to do with their existing phone numbers. Jola has come up with a free white-label application that resellers can use with their customers to forward calls from landlines to mobiles or to add landline numbers to mobile data SIMs.

Jola operates both a mobile data network and a SIP network and has developed an innovative application that partners can re-brand. CloudNumber is available to download free from the Google Play Store and the Apple App Store. Instead of having to use an analogue phone or Analogue Telephone Adapter (ATA), CloudNumber allows users to connect to Jola’s PSTN replacement services via their mobile phone. Experts in number porting, Jola can facilitate the porting of both landline and mobile numbers. Jola partners have the choice of ordering new numbers or easily porting customers’ landline numbers, who can carry on making and receiving calls, without the need for any additional hardware.

There are millions of individual PSTN lines in the UK that are soon to be end-of-life. Upgrading to broadband is an expensive overkill solution and can come with significant upfront costs.

Jola is in a unique position as the sole channel-only provider of both mobile data & SIP and has put together a webinar which focuses on PSTN Replacement Toolkits with multiple solutions for every requirement.

A record number of participants have signed up for the webinar. With the PSTN switch-off looming, the channel is looking for cost-effective solutions they can sell, deliver and control with ease.

Jola has created zero-CapEx hardware rental packages for single PSTN lines supporting phone calls, alarms, EPOS machines, door entry systems, CCTV, lift lines and calling kiosks, among many others. 

‘Resellers can replace common PSTN solutions at a really competitive price, managing operations and usage within Mobile Manager. End-users can retain their existing numbers and choose their preferred SIP Overlay solution with additional options such as voicemail and call recording.” Lee Broxson, CSO, Jola.

In the channel, we are seeing an exponential rise in demand for mobile data SIMs, not only for use in 5G/4G routers, pre-Ethernet connectivity and Ethernet back-up but also for digital signage, gaming machines, vending machines, monitoring devices, sensors and ATMs. SIMs are being used in wind and solar farms, measuring and tracking key variables, they are also being used in smart TV cameras, which roam internationally. Manufacturers and service companies are finding new uses for mobile data daily and, as we accelerate towards 5G, this is unlikely to slow down.

It's practically impossible for resellers to provision and control SIM estates without a comprehensive, well-established real-time portal. Choosing a trusted channel-only supplier means the reseller can take advantage of their knowledge and experience when they are bidding for deals. Jola’s most successful partners involve our Partner Managers directly with their customers without fear of disintermediation. Price is really important and mobile data suppliers need to understand that their products have to be priced so that channel partners can win deals at decent margins.

Millions of PSTN lines won’t be able to use a SoGEA or FTTP type replacement due to costs, incompatibility or logistical challenges. Mobile data will be a requirement for customers replacing PSTN lines for intruder alarm monitoring, call points and many other applications.

When the networks made 4G available to the channel around 2016, it changed the game. 3G SIMs running at only a few Mb/s struggled with email but 4G started to be used as a substitute for fixed-line broadband. When, due to political pressure, MNOs swapped out manufacturers recently, they upgraded many towers to support 4G+ which offers download speeds of up to 300 Mb/s. Although the networks do not publish 4G+ coverage it is estimated that over 90% of the UK population has access to 4G+. As 5G becomes ubiquitous it will overtake the number of fixed-line data connections very quickly.

The opportunity for the channel is significant and for those resellers not sure where to start, Jola has productised its unique process of helping customers successfully sell mobile data. It is called The Mobile-Data Revenue Generator (The MRG) and it helps partners to identify low-hanging fruit and win their first significant mobile data opportunity. From there they can start to productise mobile data and develop the eco-system required to sell, support and bill it.

What are the benefits to businesses of a strong female presence in boardrooms?

According to Deloitte, gender diversity in UK board rooms is lagging behind European counterparts with only 1 in 5 board room seats held by women. I sat on the board at Jola for over eight years and was the only female board member. Being a female on the board sends a positive message to other females in the organisation that there is not a glass ceiling and it is possible to progress to more senior positions within the organisation. If you can see someone similar to yourself doing the job you want in the future, it makes the goal seem more achievable and you can often gain a mentor to help you learn the skills to be able to get there. I like to think that I brought a new dimension to the team and some complementary skills. Board discussions were always inclusive and a female marketing perspective from a detail-orientated person was often useful in decision-making. The Jola Board has learned that it’s not enough to have female representation you have to make sure decisions are not made without everyone’s input.

How are you taking a lead on the issue of increasing female representation at the top in your business?

At Jola, we focus on hiring and developing the skills we need to satisfy the demands of our partners. We use our own technologies in-house to facilitate flexible working and run training and development programmes, which has helped us to recruit more women into management positions within the organisation.

I have championed a few different initiatives to remove the barriers some women face working in the channel such as work-from-anywhere and part-time hours. This has facilitated Mums working from home, doing school drop-off and pick-ups, attending parents' evenings, school productions, sports days and taking kids to after-school clubs. It has also allowed Mums to be at home to look after ill children and relatives globally, whilst being completely focussed on the needs of Jola, our sales team and our partners’ requirements during working hours.

We have introduced fantastic EMI schemes and employee benefits to compete with much larger organisations offering the same flexible working and gender-diverse culture locally.

We changed the way we recruited to remove the barriers of very specific qualifications and experience and focussed on finding smart people who share the same values as the Jola team and who are looking to grow and develop with us.

We are supported by entrepreneurs who have given us a voice at every level of the organisation and a career path to progress. We introduced work experience schemes, apprenticeship schemes, sandwich year placement schemes, graduate training schemes, and we advertised roles internally so women could progress inter-departmentally. We encourage and pay for our staff to gain qualifications to progress within Jola.

We have official training and development programmes as well as unofficial mentoring programmes. We encourage networking and personal development sessions with organisations such as Reframe, Women in Tech.

What initiatives and developments do you participate in to help increase the presence of women on boards in the wider industry?

I actively contribute to industry magazines and attend events speaking on panels discussing diversity and inclusion.

What are the objectives of these efforts and how are the initiatives being progressed? 

My objective is to raise awareness, inspire and to demonstrate how small changes can make such a big difference to the quality of female candidates being recruited and the success of organisations in the channel.

What more action needs to be taken to boost the number of women on boards?

I don’t think there is a quick fix. We need to increase the number of experienced candidates to recruit from. The more we can influence young people to reach their potential, the better the recruitment pool will be for us when they are ready to start work. We could go into schools and talk about the careers we can offer in IT and Telecoms and get them excited about learning new skills. We can offer work experience programmes, apprenticeship schemes, mentoring schemes, re-training schemes, back-to-work schemes and graduate schemes to grow our own talent internally and offer career development and share schemes. If you are on the board you often own a stake in the company and to do this you need to be able to invest. This is a barrier in itself. I was lucky enough to be part of a start-up with seed money, of which my share was a percentage I was able to invest.

What barriers have you identified to having more women on boards and how is Jola addressing these challenges?

To recruit the best talent into the industry we need to look at barriers. Do our daughters want to become board members in IT and Telecoms? My daughter did want to be a YouTuber or an actress but has recently said she may start her own business and aims to be CEO. She is more aware of what we do as she spent so much time sharing my home office being home-schooled.

Jola addresses some of these challenges because we need to grow our own talent internally. We are not specifically focused on hiring more women, in fact, we are against positive discrimination. If board positions are recruited for, the pool we recruit from needs to be more diverse and to do this we need more experienced women with great track records in previous board positions, who can add something extra to the existing board.

What cultural considerations need to be taken into account and why?

If you have children, someone needs to look after them. If I look at the school gates 97% of the parents doing the pickup and drop-offs are women. If you don’t have children it may be more of a level playing field. Do we then need to look at job descriptions for potential board members to see what they are looking for and work backwards? Do we have the connections and network to be recommended for openings? Do we have the track record and experience required? If not, we need to build that and work with brilliant entrepreneurs who can help us achieve our goals.

There are millions of individual PSTN lines in the UK that are soon to be end-of-life. Upgrading to broadband is an expensive overkill solution and can come with significant upfront costs.

Jola has solved this problem for resellers and their customers by creating zero-CapEx mobile data rental packages for single PSTN lines serving phone calls, alarms, EPOS machines, door entry systems, CCTV, faxes, lift lines and calling kiosks, among many others.

We have a wide range of DaaS (Device-as-a-Service) bundles which include the router, the SIM card, the SIP Trunk, porting, ATA and airtime. There are no upfront costs and in-term devices can be upgraded, with faulty equipment getting an advanced replacement as standard.

Resellers can replace common PSTN solutions at a really competitive price, managing operations and usage within Mobile Manager. End-users can retain their existing numbers and choose their preferred SIP Overlay solution with additional options such as voicemail and call recording.

Clear strategy

Jola was set up in 2014 with an SEIS investment, owned and managed by the team that built and sold Griffin Internet. The business was established as a channel focussed telephony provider. Jola has a strong focus on process automation as a key aspect of customer experience and this has enabled revenue growth with modest overhead increases. Early successes with M2M, and a clearly identified opportunity in a growing market, led to an early pivot to mobile data connectivity. Other key components of strategy are focus on intellectual property in the service offering, recurring revenue, a broad customer base, and customer retention. Clear articulation and delivery of our strategy was a key component of our Information Memorandum (IM) when we launched our investment process.

Key Performance Indicators

Jola is highly focused on KPIs and monitors them rigorously at both company level and for each staff member.  This is how we align company strategic objectives with those of our staff. Performance against these targets is a key determinant of staff progression and reward.

Establish a reputation

The Jola team, made themselves known to the investor market from the outset. This included building relationships with private equity, focussing on investors who understood the TMT market and, more importantly, wouldn’t baulk at high valuation multiples. We used trade publications, awards submissions and attended events where we might bump into investors and acquirers. That was how we first met BGF. We also built a relationship with analysts Megabuyte as a means of creating awareness of our strategy and financial performance.  Our golden rule was that we would only share revenue and EBITDA projections that we could achieve with certainty.

Financial planning

Jola operates a 3-year rolling financial plan. Our budget is the first twelve months of the plan, fixed at the start of each financial year, and the remaining 24 months provide a longer-term outlook. Having this 12+24 as an ingrained discipline made it easier to prepare the IM and is welcomed by investors. Setting achievable targets was fundamental as we knew that investors would look at the record of achieving budget. Our budget is shared with all staff, and we update them at monthly team meetings. We re-forecast quarterly for cash flow purposes and to measure if we are on track to achieve budget. The cash flow forecasting was especially important in the early Jola days. An advantage from having a realistic three-year plan meant that we could quickly assess the value of potential earn-outs offered by investors.

Transaction ready

From Day 1, Jola was set up to be ready for external investment with a particular focus on being paperless in every part of the business. We keep soft copies of our Intellectual Property, our key business processes, and our legal agreements. We used lawyers to review our customer contracts and service agreements before they went live. If we must deviate from our standard customer terms, we attach an addendum that clearly sets out the non-standard terms. We started our data room the day that the company was incorporated and used it to store our key documents.  We knew that an investor’s lawyer would review our legal documents thoroughly and that being transaction ready would make it easier for the management team to survive the due diligence process and have lower costs.

Understand your numbers

Financial due diligence is the most rigorous part of the investment process, and we knew that preparation is key. This involved producing a full management accounts pack every month, including income statement, balance sheet and cash flow, with analysis of performance and trends, including versus budget. This was supplemented by various KPI packs with both financial and non-financial measures that were discussed at a monthly board meeting, chaired by an experienced non-executive chairman. After the first couple of years, we elected to have audited accounts because we knew they would provide comfort to investors and ensure we were compliant with accounting rules. All of the above meant that we were match fit when financial due diligence reviewed our financial statements (current year, two prior periods and our budget and projections) and KPIs.

Why did we choose BGF?

During 2020 the shareholders decided to de-risk their personal financial investment by selling a minority stake in the business. We produced an Information Memorandum and ran a beauty parade with a handful of investors. We did not speak to investors that required a majority stake with control, as we wanted to keep control of Jola to take the business forward to a full exit. Although the business was ready for full scale due diligence, we were attracted by BGF’s lighter touch approach and that we could complete a quicker transaction with less distraction. We considered raising bank debt rather as an alternative to selling equity but, for tax reasons specific to our SEIS investment, this route wasn’t open to us. 

Finding the right investor isn’t always about the highest headline price. We took references on all potential investors with particular focus on those that could transact quickly, had access to funding and were unlikely to price chip as we neared completion. It is easy to focus on a headline offer but it is not the actual cash amount that the shareholders will receive. There are many additions and deductions to arrive at the final value and having the right advice in this area is essential.

Advice and managing the transaction

I joined the Jola team as part time CFO, mainly to prepare the business for external investment and manage the transaction, including writing the IM and setting up the formal data room. Every deal is different, and having in-house experience meant that we didn’t engage a third-party corporate finance advisor. To avoid unnecessary distraction for the rest of the team and to let them to focus on their day-to-day roles, Andrew (CEO) and I took on the bulk of the workload. This allowed us to over-achieve on our projections and avoid any difficult discussions with our investors.

Working with trusted legal advisors is critical, and price isn’t paramount. Based on previous experience, I introduced Jola to the team at Pinsent Masons, who helped us negotiate the legal and tax aspects of both transactions. From experience, I avoid working with advisors who need to prove they are the smartest guy in the room. However, we did run a competitive process to ensure they kept their pencils sharp.

Sale 

All the above meant that we were in good shape when we were approached by Wireless Logic. The due diligence was certainly deeper and more onerous, but we were well-prepared and were able to complete a relatively speedy transaction. Wireless Logic referenced very positively, and this was a key factor in our decision to start an exit process within twelve months of the BGF investment. It was pleasing to provide BGF with a strong return in a very short timeframe.

And finally

It has been an eventful and thoroughly enjoyable couple of years working with the Jola founders. The shareholders have had a great outcome and the business has found a great home.

Ronnie Smith, Jola CFO

All 4 major UK networks are well underway with their 5G rollouts. Three and EE are ahead in terms of numbers of cities compared with Vodafone and O2, however the reality is that most major cities now have 5G which accounts for over 50% of the population. The expectation being set by the operators is that it will take a further 5 years to reach 90% of the population. Achieving this will involve turning off the 3G networks to re-use that spectrum to support 5G.  The last 10% may well require technology or an approach that has not thus far been used in UK mobile networks such as using 5G satellite constellations to provide infill.

Opportunities for the channel

5G has opened many opportunities for the channel. The performance offered by 5G can be better than the performance offered by the fixed line broadband service available in many locations.  The channel are bound to have customers with poor broadband performance and 5G could well be the answer, especially when combined with a high performance 5G router and external antenna.

5G provides high performance Internet access in locations where there is no fixed line connectivity at all.  This means locations where solutions such as hosted voice, collaboration, IP CCTV could never have been supplied are now accessible for the first time.

5G requires new devices to take full advantage of the increased performance.  A fact often overlooked is that all the UK networks support LTE-Advanced or 4G+ with a much larger footprint than their 5G networks and yet the vast majority of 4G routers on the market today don’t take advantage of the extra performance.  In some cases a good quality LTE-Advanced or 5G router would provide up to 4 times the performance on 4G compared to using a device that doesn’t support LTE-Advanced.  In many cases where you’re deploying 4G in a fixed location we would recommend installing a 5G router because it will provide much better 4G performance and will be ready for 5G when the coverage reaches that location.

Jola launched our Device as a Service offering to solve a problem that has been caused by 5G. Good quality, high performance 5G devices are expensive, potentially three or four times the price of the equivalent 4G device. Our channel told us that this was an obstacle to 5G adoption. So now we offer all our devices on an OpEX model so that then channel partner and the customer don’t have any hefty upfront costs that might put them off taking advantage of 5G.

2G/3G Sunsetting

The 5G rollout is leading to the 3G networks being switched off over the next 3 years. This is a huge opportunity because there are millions of devices that are 3G only and don’t support 4G. This means that when the 3G network is switched off suddenly payment terminals, tablets, kiosks, digital signage displays and many more devices will just stop working! 

This means that you have the opportunity to generate revenue from the hardware swap-out but also this is a great time to speak to your customers about swapping out your customers mobile data SIMs.  Many organisation did deals years ago with MNOs (particularly the M2M / IoT divisions of the MNOs) that the channel could replace via an aggregator like Jola, saving your customers significant money and making a healthy margin at the same time.

5G in the future 

Today 5G is being delivered using the same frequencies as 4G and typically delivers average speeds of around 150Mb/s and over 500Mb/s in perfect conditions. However, to unlock the true potential of 5G and deliver multi gigabit ultra-low latency performance then the operators need to start using the spectrum in the millimetre-wave (26Ghz – 40Ghz) bands and this will require regulatory change and significantly higher investment.  When this happens I think 5G can really deliver on the promise of any application anywhere and it’s not inconceivable that fixed line access is no-longer essential for many businesses and use-cases.