Hosted VoIP Where is the Channel for this Product?

By Ian Kieninger, CDW

Yes, I agree this stuff is hot. I may even agree with IDCs forecast of this market exceeding $450 million in 2008. However, I am still trying to figure out who is going to drive this revenue?

Lets start with the traditional agent. These are the ex-telecom guys who love slinging bandwidth all day long. These companies are primarily built upon reoccurring revenue so hosted VoIP should be right in their wheelhouse. However, to grow in this environment one must sell a lot of services and sell quickly as we all know commission does not usually come until three to four months after contract execution. When it comes to this product, the agents are going to have to sell in large volumes to match the equivalent revenue potential of other currently available products.

In most cases they will have to commit more time during the sales process. I have seen that it takes about the same amount of time to sell a 10-20 site MPLS solution (12,000 mrc) as it does to sell a 30-40 seat hosted VoIP solution (3,000 mrc) but at one-fourth the revenue. This is primarily due to the more complicated aspects of the phone system itself. The agents now have to become competent in the overwhelming number of available features and call applications. Most times these choices need to be flushed out over many customer calls or visits not to mention the effort that goes into network assessments and interop process.

Now, lets look at the interconnects. In todays world, hardware is still king. The PBX manufacturers continue to push their channels down the path of providing hardware solutions (at least for now) to their customers. However, this channel is most likely leading the path when it comes to education around hosted VoIP. If not for interest in driving new revenue streams it needs to be there for a defensive play. The offer has to be in their back pocket but I still think we are a couple of years away from it being a lead strategy. So far I see most interconnects and manufactures pushing sip trunks along with their premise based solutions to help provide some of the advanced features and flexibility customers are looking for.

At the end of the day if you are selling to SMEs at some point you have to get on this bus. Your customers will be asking about it and if you dont have a solution your competition will. The conversations around price savings and lower capex are still strong. I believe the advanced applications and the ability to tie a corporations communication strategy into an overall business process will take this technology to new heights. I agree with Taras comments from the latest issues of PHONE+. Channel partners who are trained to sell and manage VoIP services represent a new skill set that will be in high demand.

Ian Kieninger oversees the voice and data specialty businesses at CDW and manages the companys business relationships with carriers, manufacturers and other service providers.

The postings on this site are my own and dont necessarily represent CDWs positions, strategies or opinions.