Andrew Skipsey, Managing Director of Hampshire-based M12 Solutions, observes the market with a cool head and remains firmly committed to the traditional way of doing things despite big advances in hosting and the cloud.
Skipsey has been selling telephone systems since the late 1980s, but despite being a dab hand at his trade finding new opportunities for system sales has proved to be a tough task. "The biggest problem is that much of what we sold five, ten or even 15 years ago is good equipment, and if it's reliable and does a basic job then many people in today's climate are just hanging onto the old kit for a while longer," he commented. "But it is still important for us to sell new systems and the chunk of GP that we get is important in our overall mix. Perhaps it's because of this that we haven't been interested in selling hosted telephony."
However, there have been many more scenarios than used to be the case where Skipsey has not been able to get lease approval. "The customer wants the system but hasn't got the cash and a hosted service we could underwrite would work. But we haven't gone down this route because we like selling what we know and support. I wonder how many other resellers are the same? Our industry has some great kit."
M12 Solutions' main system supplier is Splicecom. "We've been selling it since 2004 and think our engineers for this system are among the best," claimed Skipsey. "Splicecom has launched popular looking phones incorporating some great innovations. And, in response to the challenge of selling systems to new customers, Splicecom launched an equipment rental scheme that allows us to underwrite the end client.
"Yes our GP comes to us over time and we have to decide how to cover the cost of engineering and support, but just a few weeks into being able to properly promote this route we have freed up deals that were previously locked out because of no budget or no lease approval. Real opex not capex with the benefit of an on-site system and with an option to downsize licencing for those who need flexibility."
Skipsey knows that anyone who wants to have hosted data and applications for their business needs good connectivity, the same is the case for telephony. "We see that many businesses look at the pipe to the Internet almost as a commodity and pay scant regard to the detail of what the ISP can provide," he added.
"They see the TV adverts for broadband and think it's all the same. We find ourselves educating people but they often buy from the cheapest only to be hit with poor support, poor lead times and horrible excess charges for installation. Plus there are so many people who just cannot get decent affordable connectivity. We've taken this a lot more seriously than many by becoming an ISP and delivering fast Internet to businesses by radio from well connected points of presence, often just a few miles away."
According to Skipsey, business in the UK will for many years be multi-tiered in terms of how it can embrace hosted services, and the key will be connectivity. He commented: "Even with the massive FTTC roll out, if you look at the expected speed drop-off just a few hundred metres away from the cabinet there will still be many people feeling like they were at the end of a piece of wet string. The 90 per cent of the UK population with fast Internet aspiration still leaves 10 per cent in large areas with a dire service. What we have noticed is that villagers and rural firms, often because they have had no real sight of what fast Internet can provide, are accepting their slow service - which amazes us."
It is in the towns and cities where the real revolution is at last starting to happen, he observes. Here, businesses are waking up to the limitations of broadband and are seriously looking at the EFM and fibre they need if they are to benefit from hosted business applications, says Skipsey. "But we still find that firms see the difference in price between broadband and a leased line hard to take, even though it's like comparing a moped with a Ferrari. We work hard to help clients cost-justify the expense and we are seeing a healthy increase in take-up of leased lines."
However, what about the well publicised cloud services? "We have taken the decision to focus on the connectivity and telephony spaces and where appropriate work with complementary application providers," stated Skipsey. "We know some of our competitors have stepped into the hosted applications space and we'll keep watching with interest."
The future, he says, is going to be very interesting. "This seemingly never ending recession will finally end at some point and there will be a scramble for sales as positivity returns," he forecasts. "But, as has always be the case, there will be occasional big blips that affect use and take-up. This will either be a ‘big issue' such as a hosted centre going down for a while causing big disruption, or the anticipated issues everyone will have such as the lack of Internet speed when the Olympics are on. All we can do is provide good advice, keen pricing, excellent value add and promote telephony on the bandwidth.
"I guess the threats to our sales are going to come from the hosted arena, where the pricing is as cheap as chips and the perceived added value is considered better than what we have in our kit bag. So we have to counter those who commoditise and our armoury is filled with evidence of great support, credentials and proven technology. When you add flexibility, good value and professionalism then you hope that you have what your client needs. With a healthy degree of desire at M12 to avoid clients ever wanting to leave us, keeping them happy should secure our future."
Skipsey says it's important to up the game regarding the messages that M12 sends out. "That's why we are in a process of updating our website, we have re-branded and will be investing further in new team members to help us better communicate to our clients and target markets," he commented. "We are in a great industry which has always been dynamic. Cloud will be important for data and voice and as time passes ever more so. We have a big responsibility in the connectivity services we provide because what we offer is absolutely vital for many businesses and organisations to work efficiently and effectively.
"Looking back at the various telecoms revolutions of the 90s, they helped us make money and businesses could differentiate, but the revolutions we are presently seeing have a more significant impact and could mean the difference between a company sinking or significantly prospering."