Jola Cloud Solutions' Blog

Three technology trends that are likely to create opportunities in 2017

If you google this subject you will find everything from 3D printing to virtual reality. I shall focus on technological innovations that will bring business opportunities, particularly in the UK SME market and especially for the voice and data channel. In summary, as the reliability and speed of internet connections improve, so the adoption of business cloud applications will accelerate. As mobile data becomes affordable and manageable so more data SIMs will be embedded in all sorts of devices throughout the world.

The speed and cost of internet connectivity

The real cost per MB of data decreases every year and it is usually only inefficient markets and effective monopolies that keep prices high. Last year, Vodafone hit out at what it perceived as BT’s excessive profit-making from Openreach. Vodafone were able to produce figures purporting to show that BT made excess profits of £1bn from regulated services in 2015, equalling the amount set aside by the government for digital infrastructure in the Autumn Statement. As discussed in previous blogs, Ofcom’s intervention to separate Openreach from BT is likely to lead to a more progressive strategy. Together with EU regulation of the mobile networks this will cause dramatic reductions in the cost of internet and faster, more reliable services over mobile and fixed connections.

The cloud

In 2005, the front page of Comms Business depicted a gravestone on which was inscribed “RIP PBX”. It was more than 10 years before the first failure of a major PBX manufacturer but cloud voice is now established as first choice for SMEs needing a phone system. The market leader, Broadsoft, has around 15m seats installed worldwide – more than all the other vendors combined. Whereas UK business once lagged the world in cloud adoption, as internet connectivity speeds and reliability have improved so UK SMEs have caught up. Today around 80% are using at least one cloud application in their business.

I recently read an article about marketing in the channel. Interesting points were raised about strategic planning and consistency. Aligning marketing plans with business plans and playing the long game were cited as being key. Agencies and suppliers were offering marketing support to help resellers make the most out of funding and materials available, but how effective can they be in isolation?

On the vendor/supplier side you want to create scalable programmes that are easy to manage with measurable ROI. Resellers want hot leads, new customers and increased revenue.

The challenges

The two biggest challenges for marketing are setting expectations from the outset and gaining collaborative commitment throughout the business. MDs are often attracted by the prospect of receiving new leads without committing time or resources. They hope for quick results and disappointment can turn to dis-interest.

Integration

Marketing doesn’t stand alone. It needs to be integrated into core business strategy. Companies that have grown well in the channel with recognisable brands have not only integrated marketing plans with the core business plan but also understood the needs of the market. They have packaged, priced, promoted and supported solutions profitably to meet these needs, often investing heavily to do so. The senior management team are as focused on leads as they are on opportunities and marketing statistics are measured in the same way.

Social trends generating opportunities in 2017

Of course, there are many social trends we could talk about here. I have chosen three that relate to business and are connected. In summary, there are more companies starting up in the UK and fewer of these are failing. The working environment has changed and continues to change, assisted by technology and a more flexible approach to working practices.

Businesses starting up 

In 2016 there were 5.5m businesses in the UK up from 5.4m in 2015 and 5.25m the year before that. 99% of these business employ fewer that 250 people and 96% fewer than 10 people. The proportion of businesses employing any staff at all has been stuck at 24% for the last 3 years and down 1% compared to 2013. In 2015, 383,000 businesses started trading and 252,000 businesses ceased trading. Apart from a small spike in 2009 the business death-rate has always been around 10% however, the difference, 131,000 in 2015, is the largest since records began.

The prominent trend is for very small ‘freelancers’ working in cooperation with each other or for larger organisations. They have very low start-up costs and tend not to directly employ people. Consequently, they are less likely to go bust in slow periods. In 2013 women constituted only 16% of UK board directors and by the end of 2015 this had increased to 26%. This could either mean that more established companies are appointing women to their boards or that most new businesses in the UK are being started up by women.

Location independent working (LIW)

At the end of 2015 1.5m workers in the UK stated their primary place of work was not the office - up 20% in a decade. Many would have expected this to be higher but until now technology and acceptability have applied friction to this trend. Some would say that cloud technology is essential for productive LIW and UK business has been slow to adopt the cloud when compared to business in the US. With fast internet connectivity widely available and the growth of inexpensive reliable business apps, the brakes are off and we can expect LIW to accelerate in the next few years.

Be the bearer

10 years ago we saw demand for white label managed broadband. Traditional telecommunications providers decided to sell own-branded internet connectivity. Their objective was often to win future hosted telephony business running over their data connection. They were billing and supporting new revenue streams, increasing ARPU and the potential value of their companies.

Today we are seeing the same trend with managed mobile data. IT companies are adding fixed and mobile data connectivity to their portfolios to act as a conduit for the sale of hosted services. Their objective is to support devices and applications connected to the internet.

Demand

4G routers are being used as primary connections where broadband service is poor but also for pre-Ethernet connectivity and Ethernet back-up. Mobile data SIMs are being fitted in many gaming machines, vending machines, monitoring devices, sensors and ATMs as standard. Every day manufacturers and service companies are finding new uses for mobile data and as we accelerate towards 5G this is unlikely to slow down.

SMEs are demanding faster, more competitive access to the internet, whether that be wired, wireless or 4G. Services are viewed as a commodity so businesses want to know what is available at what speed and who has the best deal. Partnering with companies who have multi-carrier quoting tools and experience working with the carriers, is essential to winning the business.

Mobile data

Mobile data has its own unique set of challenges. Managing usage is essential to avoid bill shock. Partnering with companies that have portals to allow you to manage vast estates of data SIMs at a touch of a button, will help to grow this revenue stream.

With advances in hosted telephony and increasing demand for compliance-based systems, the call recording market remains buoyant. There are a range of solutions to suit all business types and budgets. Cloud-based call recording has several distinct advantages over on premise alternatives as follows:

It is generally cheaper.

Often businesses don’t need all their extensions monitored and paying by the month per extension is easier and cheaper than installing a server onsite connected to a PBX.

It is more secure.

Any onsite system needs to be firewalled and backed-up, either online or by physically taking backups and locking them in a fireproof safe.

It is more flexible.

Certain professions (lawyers, IFAs) must record their calls and onsite systems tie them to the office. Cloud-based recording means they can work anywhere and still have their calls recorded.

It is more scalable.

Onsite systems need to be physically upgraded whereas a cloud-based system never runs out of capacity.

At the right price, many companies will opt for call recording even if there is no regulatory requirement to do so. It is essential if a company wants to take orders over the phone and is a great tool for training customer support and sales people. 

Of course pricing is important and suppliers that try to extract too much margin from their resellers will lose out because their channel partners will simply not be able to win business at a reasonable margin. However, having the best margin is no good if you don’t win the business. Here are some ways in which your best suppliers will improve your conversion rate with customers and new prospects. 

1. Software tools and automation

Smaller resellers will rarely want to deal directly with carriers and the networks don’t have the capability to properly support more than a handful of super-resellers, distributors and aggregators. This means bespoke pricing (e.g. leased line quotes), orders and support often have to pass through an intermediary. Suppliers that don’t automate these processes with portals and APIs are injecting significant time and potential for error. When responding to a prospect or customer need, speed and accuracy are often key factors in winning the business

2. Competitive analysis and benchmarking

Resellers often don’t have the resource to constantly monitor the market and their rate of order may not be sufficient to give them enough first hand data to shape their proposition and beat the competition. Suppliers with hundreds of reseller partners should be harvesting feedback from their partner network and conducting their own research. The output should be constant price benchmarking and helpful documents lke competition matrices – comparing pricing and features to your main competitors.

3. Pre-sales technical and sales support

Pure wholesalers cannot afford to supply this resource except for the largest bids. Even then you might be disappointed in the quality of sales skills and technical knowledge available to help you answer queries and handle objections on your way to winning an order. Again because of the relative rate of order, your supplier may be able to justify this resource where you may not. You will be able to trust your best suppliers to respond quickly and accurately and often you will involve them, as part of your team, in conference calls and meetings.

According to a recent report by IDC the implementation of Internet of Things (IoT) is growing exponentially due to several simultaneous new developments: leaps in innovation around computing, storage and analytics; falling technology costs; and a sharp jump in mobile device use. They predict that by 2020, there will be 28 billion connected units globally and the market for IoT solutions will top £5.6 trillion. They see growth from the business market outstripping that of the consumer market.

In the channel we are seeing an exponential rise in demand for mobile data SIMs and not only for use in 3G/4G routers, pre-Ethernet connectivity and Ethernet back-up. Mobile data SIMs are being fitted in many gaming machines, vending machines, monitoring devices, sensors and ATMs as standard. Every day manufacturers and service companies are finding new uses for mobile data and as we accelerate towards 5G this is unlikely to slow down.

The challenges

The issue for many is one of management. Unlike FTTC, which is largely unlimited (usually with a fair use policy), mobile broadband is sold with monthly usage allowances and financial penalties for over usage. Pricing is high and there has been no easy management portal until now.

The company that supplies the internet connection to an SME is often the first choice for cloud applications like online backup, 365 and cloud voice. Many SMEs will default to BT even though they may not offer the best and most cost-effective solution. Local IT and Telecoms providers can capture this business and secure future cloud opportunities, by following three simple rules.

Rule 1 – Use the waiters list

If your SME cannot currently get fibre broadband or justify an Ethernet circuit, contact your connectivity partner who can add them to the waiters list. As soon as fibre broadband becomes available, you will be alerted and can contact your customer with the details.

Rule 2 – Monitor movers and shakers

Around 1% of UK SMEs move office every month and half again will open an additional office. There are 5.5m SMEs in the UK so that’s 82,500 opportunities to sell a new connectivity circuit every month. Our most successful Partners have regular (3 to 6-monthly) scheduled reviews with customers where they get wind of early plans for expansion. Also consider regular emails re-enforcing the portfolio of products you can quote for.

Rule 3 – Monitor contract end-dates

The cost of bandwidth is halving every year and BT are very active in re-signing Ethernet and fibre broadband customers to new terms before they come out of contract. Although these new terms look favourable, they are often much more expensive than the new market price. Find out the expiry dates of your customers’ connectivity, make a note in the diary and bring it up at every review. BT are now set up to accept a phone call as a legally binding contract and many SMEs have been caught out by this. Advise your customers not to agree to anything until they have spoken to you.

Companies that possess detailed knowledge about their customers and use it to their profitable advantage are successful. Knowing specifically what buyers want, savvy leaders can build and deliver the precise solutions to meet their needs. They have the knowledge to offer the right products at the right price with the appropriate service wrap. They mirror problems and propose appropriate solutions to create positive buying experiences.

In marketing we look to better understand the needs of our customers to tailor offers to meet these requirements. When our partners look to marketing for help, they are often looking for new prospects to sell new services to. By first analysing their existing base, for what sales like to call ‘low hanging fruit’, partners gain a clearer picture of the required price point and service wrap needed to win the business. It is much easier to sell to an existing customer and once the first deal has gone through, confidence and commitment to the new revenue stream grows. With the right reference sites, partners start to build a pipeline of opportunities from their target profile.

By understanding the changing needs of an existing customer base and evolving to meet future requirements, companies not only protect future revenues, but also increase ARPU and have the knowledge they need to win new business.

As many of you are aware the staff at Jola have all worked together before at Griffin. Griffin was a channel ISP that won multiple awards and was regarded by many as the UK’s leading white label broadband supplier to the channel.

Griffin predicted early on that when internet connectivity became fast enough and reliable enough, that there would be a market for cloud-hosted applications. Griffin invented managed broadband and enabled hundreds of resellers to become virtual ISPs.

Prior to the launch of MOPS (Griffin’s Managed Online Provisioning System), telecoms providers selling internet connectivity did so on a commission basis. As the market converged, they saw suppliers more as competition and needed to take back control of the customer experience. To eliminate the risk and maximise the value of their businesses, they wanted to provide broadband under their own brand. The prospect of becoming an ISP in 5 days was appealing.

Griffin developed MOPS to meet this need and helped the telecommunications channel grow new revenue streams from ADSL, SDSL, ADSL2+, FTTC and leased lines.

Could the same thing be happening with mobile broadband?

4G is widely available in the UK with typical download speeds of around 20Mb/s and theoretical speeds of up to 150Mb/s. We have seen a surge in demand for data-only SIMs in devices other than smart phones. Business users are keen to use 4G to connect devices to the internet, especially in areas where broadband connectivity is slow. The issue for many is one of management. Unlike FTTC, which is largely unlimited (usually with a fair use policy), mobile broadband is sold with monthly usage allowances with financial penalties for overusage. Pricing is high and there has been no easy management portal until now.