The communications industry is changing significantly. The transition of the market toward cloud-based communications is causing vendors, distributors and channel partners to rethink the way that they go to market.
Mitel, a global market leader in communication solutions, has almost 5 million cloud users around the world and relies on a partner network to sell to customers.
Here are some perspectives from Mitel about how channel partners can grow their cloud businesses and go to market.
Cloud vs. PBX sales are not the same. The sales processes for UCaaS and typical PBX solutions are very different. For example, selling a PBX-based solution to a large enterprise can take a year or even more, and even SMB solutions typically take 90 days. But with UCaaS, the cycle can be as under 30 days.
The UCaaS environment for channel partners is faster-paced, meaning that the sales experience is different and requires different skills.
A UCaaS sale will typically require engagement within a few hours of first contact and can often be won or lost within the first day based on the speed of response.
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For many years, Mitel has sold a range of unified communications and contact centre solutions, but to support this need for a faster response, Mitel now also has a dedicated unit focused on UCaaS.
Speed of response is vital in UCaaS sales and this might mean that channel partners need to reskill their sales teams.
Cloud business valuations are stronger. There are excellent commercial opportunities for partners adopting UCaaS. Building a strong base of recurring revenue will significantly increase the value of the partners’ business. In simple terms, having guaranteed recurring cloud revenue on the books is far more attractive than non-guaranteed hardware sales. Adding recurring revenue to the books attracts a multiplier in terms of the value of the partner’s business and this is a huge difference to a PBX-only model.
For partners who want to sell their business in the future or just want to maximise their commercial potential, building a strong recurring revenue model is highly attractive.
Moving to UCaaS. There are positive challenges facing the channel in moving to a recurring cloud model. With no need for investment in technical training and engineering support, a lot of partners will be reshaping their resources to focus on becoming a more sales-led engine with a lighter touch on technical support and engineering.
One of the biggest challenges that partners face when building up a cloud model is that they don’t know what’s going to happen to the people they’re working with. Some will want to stick to a PBX strategy because of this; other companies will want to take both paths.
On the plus side, there are many opportunities for engineers within the channel because partners can begin to offer services and support around the UCaaS solutions and can continue to drive added value.
With Mitel there is an option to sell both UCaaS and PBX solutions at the same time to offer variety and a path to UCaaS. Whichever model channel partners choose, it’s important to consider what you need in the market today, because continuing with a legacy model without thinking about the future could be a dangerous move given the significant transition to cloud by end users.
In Mitel’s opinion, there’s a lot of opportunity for channel partners to choose their ideal path to cloud. Some will choose a hybrid model and some will move fully into selling UCaaS only.
Whatever happens next, channel partners should think carefully about their opportunities, and the importance of having the right brand powering their UCaaS.