Systems Integrators: Exploring the Opportunity that UC Management Presents
Jim Ortbals, VP Partner Sales, VOSS
If you are a Systems Integrator (SI), your business model is reliant on customers coming back to you for assistance, month on month, and generating that all important annuity revenue. So every time you lose a customer to a competitor or to "the cloud", you lose any future revenue opportunity as well as your ongoing maintenance agreements.
There is no denying that cloud communications poses a great threat to the SI business model. Do you have a strategy to prevent other cloud solution providers stealing your customers?
In recent months we have seen a growing number of enterprise companies moving to the cloud. According to Infonetics, 19% of enterprises have implemented a portion of their UC in the cloud.
However, when it comes to offering enterprise customers a communications solution, SIs are actually in a strong position with a number of options available:
- Some SIs are choosing to make a major investment in a cloud services offering. This could be perceived as a risky approach but there are many global SIs making a success of this strategy for the communications market.
- Some SIs are taking a path that poses less business risk, by creating a Management as a Service (MaaS) offering, which has very little capital investment required up front and offers a new annuity revenue stream from existing customers.
In order to fully understand the second option, first some background: To a successful, experienced, large enterprise customer, the idea of migrating their vast, multi-location communications systems to the intangible cloud is daunting. There is risk and worry associated with an unreturned investment, a loss of flexibility, a disruptive onboarding process, and the barrier to exit from the cloud. These are all valid reasons that steer large firms away from migrating their communications to the cloud.
However on the other side, the cost of operating a UC environment is increasing dramatically. The latest independent analysis by Nemertes Research shows that UC operational costs are currently running at $2,747 per end point. Enterprises need to cut their UC operating costs, in order that an on-premise communications solution remains viable.
So, a new opportunity is developing for the SI. If they could offer these their enterprise customers a Management as a Service solution, the SI could overlay a UC management platform onto the enterprise's communication infrastructure, which would reduce the enterprise’s UC operational costs, and would allow them to avoid a migration to the cloud. It's a win for both parties:
- The SI creates more stickiness with the client and develops a new monthly stream of revenue
- The enterprise continues to own its UC infrastructure, while cutting operating costs
Nemertes has showed us that UC management reduces the operational cost per end point from $2,747 to $1,050. Therefore, with a MaaS offering, SIs could help their enterprise customers make a 47% reduction in operational cost, per device. For a 10,000 seat organization, that means a potential saving of $16.9m.
Food for thought. Feel free to contact me to discuss this further.