Meeting strong demand for hosted telephony was not in the business plan when LA Connect was established. But as the comms arm of LA Micro Group the company could not have been better placed to give customers exactly what they want.
End users who are receptive to hosted solutions play into the hands of LA Connect, according to Director Lee Waller, despite the market demand coming out of the blue. "When LA Connect started out we were focused on mobile technology services and our mobile licences," explained Waller. "Hosted IP telephony has had a big impact and there is an element of this in almost every deal we are doing. This wasn't planned but with an IT side to our business we are able to deliver hosted solutions."
There is a natural affinity between IT and telecoms that is not always addressed, pointed out Waller. "For example, in cases where a customer is looking to implement a mutli-figure IT solution there will be an element that relates to telephony, so LA Connect approaches the customer with a telephony proposition and brings a different set of resources compared to a typical IT supplier," he said.
LA Micro Group has grown from £1.2 million in 2009 to over £13 million this year and was recognised by the Sunday Times in its Virgin Fast Track listing of the UK's fastest growing businesses in December 2014. Waller's relationship with Dave Bell, the owner of LA Micro Group, goes back 20 years. Before university Waller worked on network distribution for Bell. Following university, Waller started his first telecoms company which was sold in 2004 to Fresh Media Group. He then collaborated with Fresh Media Group to deliver VoIP into Soho. This project was called Devil 7, and following an MBO the company became Keylime Group which was sold to Nine Telecom in 2010. Waller joined Nine to head-up its mobile division. In 2013, with a family and a new baby, an opportunity to join the LA Micro Group presented itself.
"LA Connect's main achievement has been the delivery of our original plan," stated Waller. "We are not an average reseller looking to grow organically, working with products and networking and selling locally, our main concept was to go for acquisitions and work with partners to deliver enhancements on services to situations where customers were using legacy products based on calls and lines."
LA Connect has completed two acquisitions - Billericay-based Puma IP and Maidenhead-based Addition Communications. More strategic buys are in the pipeline. Its market sweet spot is SME businesses with 10-30 seats. And having dabbled in IP telephony previously and been successful, Waller knew that the biggest issues were going to be data, cost and connectivity.
"There is a revolution in the SME market," he added. "Cash is King and people are open minded about their options. Most users are moving away from copper and fixed lines and all of the customers we talk to have no objection to IP. We have seen that change in the last 18 months. The biggest single factor is the cost of connectivity. An 80MB broadband connection is now only £40 per month. This allows us to deliver VoIP solutions to any customer on an indefinite scale. Two years ago, this wasn't viable. There is a big game change happening now."
As well as acquisitions another key element in LA Connect's growth strategy is embracing new technologies. "Because of our technology strategy we can continue the successful growth of resellers who are no longer investing in their business and are thinking about retiring," added Waller. "Typically, it will be a company using older technology, but which has done it well. In a case like this we can serve the customer base and take it to the next technology step.
"We introduce services to our customers based on calls, lines and charging, but delivered as an integrated solution. In the days when we used to provide customers with just billing, the main driver was cost. Now we are delivering economic benefits and a better return by integrating land lines and mobile connections. We also provide one point of contact for reporting faults. The customer relationship is key. We want our customers to view us as a partner and not look around for any other supplier."
Some technologies have attracted a bad reputation purely because of a misunderstanding about their nature, noted Waller. "Take VoIP for example," he said. "So many people confuse it with Skype. We like to demystify the technology and be open with customers, even if this means telling them they don't need something. After all, much of telecoms is just copper and fibre cables in the ground."
There are big market opportunities, believes Waller, because so much is changing in terms of affordability. In particular, IP is now within reach of most businesses. "We haven't had any enquiries for ISDN lines on their own for two years," said Waller. "Customers often don't know what they need, but they soon see the advantages of IP when they realise the benefits and reliability. Early adopters may have moved on, but the mainstream is now ready to take this technology. The orders are flowing."