Ribbon Communications: Channel Leader Talks R&D, Partners, Optical Networking, More
Ribbon says it is making investments in tools that enable partners and customers to run a healthier, more secure environment.
September 15, 2022
Channel Futures: How many partners do you have and where are they typically located?
Ribbon’s David Hogan: We have partners on a global level. We have distributors on a global basis, and they span a variety of solutions. We have some partners that are resellers and they’re transacting and reselling that in a traditional environment. We have others that are systems integrators or managed service providers where they’re taking Ribbon’s products along with other elements and bundling that into a solution.
We have some that are full systems integrators. They manage everything down to the desktop, and we provide architecture design solutions there. Then we have others that are taking our products and integrating them within their offer and selling it on a per-network or a per-seat basis. It’s a flexible solution within the partnership community.
CF: Can you say what percentage of the business is dependent on partners?
DH: Thirty percent of our business is dependent upon partners and we know we expect that to grow significantly because of our relationships with partners, not only here in the U.S., but on a global basis as well. We have partners in the U.S., Canada, Central and Latin America, South America and Africa. I think Antarctica is the only continent where we don’t have a partner.
We’ve got large relationships. What we try to do is align partners based on their customer base and develop solutions with them that meet the needs of those customers to provide a great experience. It’s never a cookie-cutter, one-size-fits-all, so we do our best whether it’s by segment, by vertical, or by region to find the best partner for end users.
CF: Aligning partners based on their customer base … Do you think that’s typical for channel leaders to do?
DH: I think it depends. I think you have some companies that are investing in technology that they want to scale rapidly that suits a mass market model. And for that they’re going to drive as much volume and consumption as possible.
We have some products in that area, but we also have a lot of products that are geared more toward large enterprises and highly skilled technology businesses that require a deeper understanding of our products. This means we have a more intimate relationship with a partner based on the needs of their business. We have to be more flexible than I think some of our peers in this space do.
CF: The responsibilities can vary for channel leaders, and so I wanted to know in your words what are your daily responsibilities like?
DH: I have three hats that sit on my desk. One is a football helmet, one is a construction helmet and the other is a fireman’s hat. The hat I wear depends on the day and situation.
Where I spend a majority of my time is with the people within our organization as well as the people with our partners and distributors and strategic alliances. My goal is to understand what it is that they need to be successful. What do we need to do to improve a product? For example, do we need to improve a process? Do we need to take a look at promotions and pricing and incentives in order to meet the needs of the business?
CF: If you had to explain Ribbon’s business model in the most basic terms, how would you do that?
DH: I would say that at a fundamental level we have a direct and indirect approach. We also have strategic alliances and partnerships that we align within what I call an ecosystem model. We do transact quite a bit with direct relationships with service providers because of the history and relationship there on the commercial side with enterprises, with midmarket customers with small businesses. We have a full-scale model with distributors, with resellers and cloud providers, where we work with them on how we transact and go to market there.
CF: Ribbon recently announced $52 million in private placement financing. Could you explain what that means exactly, and will partners benefit from the proceeds from that?
DH: So private placement is essentially a term used to go raise more funding from a stock standpoint. Ribbon is a very healthy, very profitable company. We see great opportunities to improve some research and development. We had some opportunities for additional investment capital, and we did a private placement to raise those funds. We’ll look to make strong investments into the company overall with that private placement.
Partners will benefit when we’re able to take funds like that and look at ways to further develop our products, further develop programs, further develop campaigns and promotions that will enable our partners to be more successful with their customer base.
CF: Can you comment on what areas of research and development that you’re focused on?
DH: We continue to make investments in our cloud and edge business as well as within our IP and optical business. Those are constantly developing, constantly evolving architecture and technology. We continue to look at the needs of the business and the needs of end users and make investments in areas that are beneficial for our company, for our shareholders, for our partners and with their customers as well.
We continue to invest in security for a more secure, reliable solution to protect the networks of our partners as well as their customers. We see frequently companies that don’t have a robust security system, whether it’s a voice over IP network or a data network, a firewall. And the last thing any of us want is consumers is to have our information available to bad actors. Also, we continue to make investments in tools that enable our partners and their customers to run a healthier environment.
We run a great analytics platform that handles operations, handles security and handles discovery. That’s a tool that we see being more and more widely adopted because of this hybrid world of working. The CIO or his staff must be available to manage and monitor the health of their network on a proactive basis. They’re the engine to keep a company going when 80% of your employees are working remote or working from home. They’ve got to make sure that the networks running, that Microsoft Teams is running, that their call center software is running, that they have access to applications and their networks or third-party data centers.
CF: Can you describe your partner program and whether you have plans to expand it soon?
DH: We have a tiered structure partner program where it is based on their certifications for sale sales as well as support. They’re eligible for different discounts within the program. We have options for partners where they can purchase product directly from us. Or they can go through distributors in order to transact and purchase those products. We have partner programs that are country by nature. So, you could be a U.S. partner, or you could be a global partner and have the ability to provide solutions into multiple countries or regions throughout the world. It all depends upon the needs of their business. We also have a division that we call strategic alliances and partnerships where we work with those organizations for testing and certification of our products.
CF: The optical transport equipment market declined by 2% in 2021. In Asia, it declined, but expanded in other parts of the world. I wondered how that impacts how partners sell?
DH: Think about the use of optical transport equipment. You’re connecting fiber.
In Asia, they’ve made a lot of investments into optical deployment, into fiber deployment into countries there. But they oversaturated that area. You would expect a decline because there’s not as much fiber being put into the ground. In the U.S. there’s growth, especially as the federal government has provided stimulus packages and broadband funding. Expanding fiber to rural markets presents an opportunity for us as well as our IP optical partners can sell those products and services. For fiber connectivity, we’ve done a great job in the rural market.
CF: What can partners expect from Ribbon in the months to year ahead?
DH: I think what they can expect is a deeper, stronger relationship. I think they can continue to see proactive engagement. Yes, we want a stronger, deeper understanding of the needs of their business and working hand in hand so that those partners can be successful. We have to continue to invest and to continue to spend time to build those relationships.
CF: The optical transport equipment market declined by 2% in 2021. In Asia, it declined, but expanded in other parts of the world. I wondered how that impacts how partners sell?
DH: Think about the use of optical transport equipment. You’re connecting fiber.
In Asia, they’ve made a lot of investments into optical deployment, into fiber deployment into countries there. But they oversaturated that area. You would expect a decline because there’s not as much fiber being put into the ground. In the U.S. there’s growth, especially as the federal government has provided stimulus packages and broadband funding. Expanding fiber to rural markets presents an opportunity for us as well as our IP optical partners can sell those products and services. For fiber connectivity, we’ve done a great job in the rural market.
CF: What can partners expect from Ribbon in the months to year ahead?
DH: I think what they can expect is a deeper, stronger relationship. I think they can continue to see proactive engagement. Yes, we want a stronger, deeper understanding of the needs of their business and working hand in hand so that those partners can be successful. We have to continue to invest and to continue to spend time to build those relationships.
Ribbon Communications makes real-time communications software, IP and optical networking solutions for a range of sectors. These include enterprise, service providers and critical infrastructure.
The Plano, Texas-based company, with 82 global offices, continues to expand and has channel partners worldwide. In 2017, Ribbon formed from the merger of Genband and Sonus Networks, businesses that had acquired several other companies over their lifetimes.
Ribbon recently sold stock to raise $52 million to further pay off its debts and increase working capital. Specific investors, including JPMorgan Chase, bought the stock. Channel Futures caught up with David Hogan, the company’s vice president of sales. In this interview, he discusses this investment and how partners will benefit. Additionally, Hogan talks of Ribbon’s research and development trajectory, as the company has 1,000 patents to its name. He delves into a host of other topics as well including the importance of hybrid work and his daily responsibilities as a channel leader.
Channel Futures: If you had to explain Ribbon to someone unfamiliar with the company, how would you do it?
Ribbon’s David Hogan
David Hogan: We are a what I like to call a secure communications infrastructure company. By that I mean we are a technology-driven company focused on assisting organizations with complex communication solutions, whether that’s voice networks, data networks or wireless networks. We are an infrastructure company that provides software and hardware in order to make those networks run efficiently and productively. That [might be] a carrier, a managed service provider or a very large enterprise. We are very focused on some specific areas where we can provide secure platforms that enable connectivity. We are in just about every service provider in the world globally because of the acquisitions and the mergers that we’ve had, all the way back to Nortel.
We’re in approximately 40% of the Fortune 5000 space from an enterprise direct touch environment. We’re focused on solutions that require government regulations, oversight, compliance, highly secure environments, protection of intellectual property, protection of customer information, like financial institutions and health care, and service providers as well.
See our slideshow above for the full interview.
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