Comms Dealer

Mitel has reported Q1 net income of $5.3m and revenue of $248.1m in the period, an increase of 2.7% (primarily as a result of the Aastra acquisition offset by foreign currency impacts).

Total revenue was down 10.6% from $277.4m in first quarter 2014 largely as a result of adverse foreign exchange movement and transition to recurring cloud.

Gross margins improved to 52.6% in the first quarter of 2015 compared to 51.9% in the prior year.

The company said it expects revenue in the range of $280m to $305m for the fiscal second quarter.

Richard McBee, President and Chief Executive Officer, said, "Mitel's broad portfolio of enterprise solutions and strong execution in both our premise and cloud businesses delivered another solid quarter for Mitel.

"These results were achieved despite significant foreign exchange headwinds and our continued move to a recurring revenue model in our rapidly growing cloud business.

"Our operational discipline ensures that our premise business remains consistently profitable, a source of financial strength and cash generation which we are reinvesting in strategic growth initiatives.

"Demand was strong for our cloud communications solutions as demonstrated in our adding over 35,000 new recurring seats during the quarter."

He also noted that during the quarter Mitel took 'another major step' with the acquisition of Mavenir Systems, giving an established foothold in the rapidly growing adjacent mobile market. T

"The acquisition provides Mitel with an immediate revenue growth engine that positions the company to capitalise on the convergence of enterprise and mobile markets now rapidly transitioning to common IP network technology," added McBee.

He pointed out that Mitel's 'disciplined operating approach' enabled the company to deliver another quarter of solid profitability despite revenue headwinds of $21m from foreign exchange and an estimated $14m impact from transitioning to a recurring cloud revenue model. 

Steve Spooner, Chief Financial Officer, Mitel, added: "Leveraging the successful ongoing integration of Aastra we are now gearing up our integration program for Mavenir as our near-term priority. The expected EBITDA growth will position us to rapidly pay down debt and invest for growth."

Whatever your political persuasion, it is undeniable that financial markets and economies benefit from the confidence, certainty and consistency that a new majority government offers, writes Clive Jefferys, MD of Telecoms Recruiter, JMA Network.

Whether you agree or not with the result of the General Election, the uncertainty of coalition politics has been removed for the moment. Notwithstanding external, global factors and events, at least the agenda is clear.

Since the collapse of Lehman's heralded disaster in 2008, one of the biggest problems has been to rebuild business and consumer confidence. From this flows investment in infrastructure and jobs. It has taken nearly seven years hard work to get to what at least feels like a growing economy again.

However, the missing piece of the puzzle has been employee confidence.

Despite rapidly increasing hiring demand, the supply of new skilled candidates has been slow, reticent, nervous and uncertain.

This has frustrated the growth of many businesses across the UK over the last two years.

So perhaps the final component of our recovery will now fall into place.

While there have been great strides in raising employment to a record level of 31 million, this has often been at the price of low pay and uncertain hours.

So the next and most vital step is to raise the quality and rewards of employment and for most people - this means seeking promotion.

People should feel confident again about making that career move, and the best time to start is today.

The industry's most prestigious sales awards event staged at the Cafe de Paris (London on May 7th) has recognised and rewarded the best sales and marketing teams in the comms channel. Hosted by TV presenter Chris Hollins (2009 Strictly Come Dancing winner) the awards luncheon celebrated the top revenue generating teams from the distribution, vendor and reseller sectors of the channel.

Stand-out winners were Berry Telecom which secured a brace of awards including the coveted Comms Dealer Sales Team of the Year accolade (pictured).

Comms Dealer Editorial Director Nigel Sergent said: "Channel teams that truly understand the needs of customers and shown innovation in their approach to sales impressed our judges most. Real success is only achieved through teamwork, and having seen every entry that was passed onto our esteemed panel of judges, I am fully aware of the work put into these awards and the quality of the submissions has been amazing.

"All of our finalists are to be congratulated on their achievements and deserve wide recognition for their hard work."

For more information on this year's Sales Awards please visit www.cdsalesawards.com

COMMS DEALER SALES AWARDS 2015 WINNERS

DISTRIBUTOR CHANNEL ACCOUNT TEAM OF THE YEAR
EXERTIS

DISTRIBUTOR CHANNEL MARKETING TEAM OF THE YEAR
SIPHON

DISTRIBUTOR CHANNEL MARKETING CAMPAIGN OF THE YEAR
PRAGMA

VENDOR CHANNEL ACCOUNT TEAM OF THE YEAR
VIRTUAL 1

VENDOR CHANNEL MARKETING TEAM OF THE YEAR
TMS

VENDOR CHANNEL MARKETING CAMPAIGN OF THE YEAR
UNION STREET

SERVICE PROVIDER CHANNEL ACCOUNT TEAM OF THE YEAR
FIDELITY GROUP

SERVICE PROVIDER CHANNEL MARKETING TEAM OF THE YEAR
CHANNEL TELECOM

SERVICE PROVIDER MARKETING CAMPAIGN OF THE YEAR
VOICEFLEX

RESELLER SALES TEAM OF THE YEAR WITH A TURNOVER UP TO £2.5M
EXSEL

RESELLER SALES TEAM OF THE YEAR WITH A TURNOVER BETWEEN £2.5M & £7.5M
BERRY TELECOM

RESELLER SALES TEAM OF THE YEAR WITH A TURNOVER OF OVER £7.5M
FOCUS GROUP

RESELLER BEST MARKETING CAMPAIGN
OLIVE COMMUNICATIONS

COMMS DEALER SALES TEAM OF THE YEAR
BERRY TELECOM

Entanet's most notable response to the challenge of financing growth was its mature approach to bringing in external investment from a private equity firm. Here, CEO Elsa Chen, who led the MBO in February 2014, shares the journey that the comms provider took through the MBO process and how it aids the company's growth strategy.

During the last decade, Entanet has developed very strong partnerships with resellers that had delivered steady growth for our business. But while our approach as a company has always been measured, the fast moving competitive market has strengthened our desire to pursue a more aggressive investment strategy in order to satisfy our ambition to elevate the business to another level.

Investment options
There are multiple ways to secure additional funding of course, and so it was extremely important to have clear objectives from the outset to help make the right decision. It was vitally important for us to retain the existing ethos and values of Entanet which are highly regarded by our partners. Having a minority-share-holding investor is important to enabling the management team to continue our direct control of the business and carry on delivering that ethos to support our long-term vision. Entanet is a 'people' business. This made the cultural fit a critical consideration when choosing our investor, alongside the fit of strategic vision. The investor had to truly appreciate the value of people that we had invested in, which is not only in staff but also in our customer and supplier relationships.

In keeping with the approach we've always taken, we took great care when assessing potential investors. We selected a small number of equity partners to speak to and adopted a rigorous approach to the process of presenting our plans and ambitions for the business so that our vision and objectives were clearly understood. We were fortunate to have numerous strongly interested parties, which afforded us the luxury of being 'picky' in the process and being able to apply stringent criteria to narrow down our choice. In the end, we chose to work with an investor that had a demonstrable track record of positive results and management references who offered the best fit with our business culture, as well as huge enthusiasm for our aspirations.

Managing the change
Effective communication is key to successful change management and this was one of the key tasks in our 100-day plan. Internally, we ran several presentations to ensure that all of our staff fully understood what this change means to us; and we offered multiple communications channels, including an online forum, that enabled staff to raise their queries freely. The whole of the management team was tasked to manage the forum to ensure all queries were responded to promptly and through this we have since created a really transparent and informed atmosphere that helps staff to feel in control and confident.

Clear external communication was equally critical to ensure our customers and suppliers remained assured in the new structure and this was done through one-to-one meetings and calls. Nobody likes uncertainty - that's why it was so important for us to tell people exactly what they can expect post-change. Once our vision was shared and understood, we received such positive and enthusiastic support from both customers and suppliers that helped tremendously.

It's important to bring everyone on board, as it requires the whole of the business and the key external stakeholders to work together to transition the change smoothly. There was a lot to do, that's why a detailed 100-day plan worked wonders by keeping everyone focused and on track.

The new business post transaction
We embraced the change immediately by making some key investment decisions - a £2 million network investment was signed off which boosted our network capacity and service capability; bringing more quality people resources into the business by increasing staffing by 24 per cent; expanding office space by 50 per cent and revamping our entire office to create the new identity of Entanet etc. Some decisions were big and some were small but they all made a difference in showing what the new Entanet is about - equipped for growth! And indeed we grew. In 2014, we achieved nine per cent organic growth that was way ahead of our budget. Quite a proud achievement in this highly competitive market, especially for a business that just went through a major change in the same year.

What we learned
Continuous investment is hugely important to support a business' growth ambition and there may come a time that a significant change of organisational structure is the best way to achieve the funding desired. Every business is different. There have been so many transactions in the industry in the last few years - mergers, acquisitions, MBOs, trade sales, IPOs etc. Some suffered, some succeeded. Success stories are ones that inspire but, before you choose to pursue their routes, make sure they are relevant to your business.

Be clear: It sounds basic but it is not as easy as most people think to come up with a confident three-to-five year strategy. Spend the time to be absolutely clear on what you want to achieve so that your investor selection criteria can be set confidently. This is the only way to make sure you stay in control of the process. An unclear vision means that your judgement may be clouded by different noises made during the process and end up making your business suit the investor rather than the investor suit your business.

Be prepared: Ready yourself for the amount of time that a transaction will take you away from running the business - from the planning to completion stage - which can be longer than you expected. Make sure you resource well so your business doesn't suffer during your absence.

Be sure: Entering a business partnership is like entering a marriage. It is a seriously contractually binding relationship that's not easy to get out of later on if you regret it! Make sure you do your due diligence well before you say 'yes'. It can be hugely beneficial spending time speaking to a number of existing or ex-investees' chief execs to hear about their experience with your potential investors. These people are in the same boat as you and will tell you the truth. When asking for references, please make sure you select a couple who are not performing that well. The honeymoon period typically ends when circumstances become tough and you need to know how supportive your potential investor will be for you during challenging times.

This article is an extract from the Comms Dealer Guide to Growth - to read the full magazine click here

VIA is barely out of nappies but this ambitious start-up has already made significant steps into the world.

Worthington ranks building VIA from scratch into a stable, self-supporting organisation within just three years as his biggest career achievement. Who would argue with that? Perhaps the accomplishment could in large part be attributed to genetics, being the son of Iain Worthington who founded Red Box Recorders. Not surprisingly, Worthington junior has always had a strong interest in IT and telecoms. "I followed in the footsteps of my father," he said.

Having worked at Red Box Recorders from 2007 and becoming the company's Global Product Specialist, he decided to co-found VIA in 2012 with Alex Tebbs and is currently the young firm's Infrastructure Director. "We later brought Gareth Sobocinski on board to head-up the development of our portal," said Worthington. "We noticed how the technology was evolving and were impressed with the Lync architecture and design. In our searching we did not find a single company providing a unified, easy to manage hosted communications solution. We wanted to fill that void."

VIA's biggest milestone to date was securing its first major deal after eight months in business. "The sense that someone trusted us and the service we had built from scratch was daunting, yet rewarding," he said. "Every day brings a new challenge. However, our biggest change is the infrastructure on which we provide our service. We host our services across two active data centres, which is our standard model and at no extra charge. With this infrastructure we have had no downtime in the past two years."

The company has four staff and a turnover of £400,000, having quadrupled every year since it was formed. The target for the year ahead is £1 million and VIA is on track to realise this goal. At present, the average deal size is around 80 users per organisation. However, the pipeline's average seat count is about 300 users. "Currently, 60 per cent of our business is from partners," added Worthington. "We are also building our internal sales team to help drive direct sales. This is vitally important to continue our rapid growth and drive our market penetration strategy."

In five years time Worthington expects to see VIA's market share grow significantly in the telecoms market, along with good revenue growth. He also expects to have a greater data centre footprint to cover most of the global major markets. "The adoption of cloud technology is gaining ground day-by-day," he commented. "As we are a flexible organisation we thrive on our customers' requirements. Every time we add a new feature, all of our customers benefit, not just one. This helps everyone as a community towards the greater adoption of cloud technology."

VIA currently has two key products - VIA Voice and VIA Trade. VIA Voice is a seamless telephony and communication solution that replaces a business' traditional telephone system and improves the way they work. VIA Voice incorporates a hosted Skype for Business platform with added bespoke functionality from VIA, including its management portal. "It really is a true PBX replacement service and it can boost workplace connectivity within any business," commented Worthington. "However, we are particularly targeting IT services and the charity and education sector at present. As VIA Voice is fully hosted and fully managed, it is also a cost-effective solution for SMEs as well as larger businesses."

The recently launched VIA Trade product is a fully hosted trader voice system that works in conjunction with the Speakerbus iTurret. This value proposition addresses the needs of brokerages, fund managers, hedge funds, head traders, commodity traders, C-level executives, IT and communications managers and trading disaster recovery sites. "The solution gives traders the power, speed, control and accuracy required to survive in today's competitive trading environment," commented Worthington. "The platform offers security and provides FCA compliant call recording as standard."

VIA is a fluid, dynamic and versatile business that prioritises innovation and welcomes change of all descriptions. "Embracing change is the greatest skill for VARs and SIs," noted Worthington. "It would be easy for all telecoms resellers to stick to their current models, but change is always for the better. New technology is not a culture shock or a strategy change, it's a new market and a new sales opportunity."
On the subject of technological change, IP phones are 'dead', reckons Worthington. He has witnessed more and more organisations move away from IP phones due to what he calls their 'inherent weaknesses'. "Upfront capital expenditure is vast, deployment is slow and manageability is hard," he said. "Microsoft has moved away from IP phones completely for all these reasons."

Being able to provide a worldwide deployment of Skype for Business is one of VIA's goals. "Although we are able to provide services in the UK, Europe and the USA, we are currently lacking any facilities in APAC," added Worthington. "We hope to expand to this region in late 2015 or early 2016."

Returning to matters closer to home, Worthington claims to have resolved one of the industry's bugbears. "The porting of customer numbers is a pain point for all telecom service providers, but we believe we have an innovative approach to this archaic process to enable customers to move providers quicker, easier and with less downtime," he said. "Almost always we can port with zero downtime."

Having resolved this issue, the question of inter-carrier settlement fees still rankles. "Why are we all in a race to the bottom on call charges?" he asked. "With the ease of interconnect and rise of interoperability, peer-to-peer calling is getting more prolific. Why don't we focus on providing a better service to the customer rather than racing to the bottom for per minute fees?"

To say that starting up an ICT business when seriously ill is a 'challenge' would be to greatly understate the achievement of CEO Roy Shelton, founder of Cheshire-based ITS Technology Group.

The company emerged from the desperate straits of a hospital bed where questions of survival were also high on the agenda. But determined to rehabilitate himself against all the odds Shelton's eventual triumph confirms a simple fact of life - you can't keep a good man down.

Shelton was diagnosed with pancreatitis necrosis in June 2010. He spent the following six months in The Royal Liverpool Hospital and his chances of survival were described as 'slim'. He missed the birth of his son Charlie, and credits family support and the supreme skills of hospital staff for his eventual return to health. "Without this overwhelming support I wouldn't be here today, and neither would ITS. I wrote the business plan on the slow road to recovery," he said.

The company was established in March 2011 by Shelton and John Bookless with funding from DropJaw Ventures (Shelton's investment firm), and remains wholly privately owned. "Our mission has always been to offer end-to-end IT and comms solutions in a disruptive way," explained Shelton. "This includes superfast connectivity and cloud offerings such as Microsoft Office 365, SharePoint, VoIP and Lync, all wrapped in a support package for SME and mid-sized corporates."

DropJaw Ventures, which Shelton runs, invests in promising new and emerging technology companies. Following successful investments in organisations like Next2Friends, which was sold to Myspace, The Wedding Vine (Shelton is still involved in this company), and an 18 month stint working for a VC funded firm, he spotted an opportunity in the IT and comms market. Important acquisitions were to follow.
"Our first acquisition of TMGIT in December 2011 enabled us to secure long-term revenues from a strong roster of quality clients including Mars and Akzo Nobel," stated Shelton. "It also safeguarded the jobs of a superb team of engineers. Many are still with ITS, and our customers like the fact they are still working with the same team that has more than 12 years continuous service."

With the help of angel investor Paul Ruocco, Shelton bought John Bookless' shares in 2013. He decided to grow the business significantly, setting aggressive goals that included tripling revenues that year. ITS then acquired Icomm in June 2013 and made three more acquisitions last year - CityServe, Networks by Wireless and Xwavia. "As the market tightened we kept a look out for companies that were being forced into administration and were a good fit for the business," added Shelton.

"We have not only acquired the assets but ensured jobs while strengthening ITS's proposition. For example, we now have a platform to work on with our partners to secure BDUK vouchers for SMEs in Manchester. We've scaled the technical team and engineering resources, particularly around fixed wireless access models, and also become one of the biggest FibreSpeed partners in Wales."

During this period of activity ITS grew from two offices and 11 staff to an operation working out of eight offices including an international operation in Canada, with a total headcount of 55-plus, eight of which are graduates or apprentices. "We are still recruiting," noted Shelton. "Our priorities are to hire more engineering and technical support staff to address ITS's growing order book and expanding client base. I am passionate about promoting from within and giving people a chance to shine. But it is also vital to bring new blood into the business and we have created apprenticeships that give young people a chance to build a career in a fast-paced and dynamic environment."

Ironically, Shelton would not have made it onto the ITS graduate scheme - but you can't keep a good man down. "I left school without a qualification to my name," he said. "After a few jobs, I started my IT career in sales at a small software firm. I quickly moved up the ranks to become a Director at Nortel Networks, and then a VP for EMEA at a BT company. Having cut my teeth in senior management, which included 25 rounds of funding and acquisitions - along with completing a degree in Business Studies and an MBA from the Open University - I decided the time was right to start my own company."

Growth has been rapid and one of Shelton's favourite buzz-phrases perfectly sums up the ITS way of doing things - 'ITS is not a place for the faint-hearted, you will need to operate at 1,000mph with your hair on fire!'. Aside from fanning the flames of a burning ambition Shelton attributes the firm's fast growth to a trio of other hot spots. "We are growing organically as our customer base moves to an end-to-end solution, which mitigates cost, operational risk and complexity from their business," he outlined. "Our work with channel and technology partners such as Fluidata, InClarity, Motorola, Telcore, TalkTalk and Virgin is also important. Thirdly, we continue to invest heavily in our channel programme. We want to acquire new partners and customers to reinforce ITS's original vision of being an end-to-end solution provider with a direct and indirect route to market."

As a privately owned company, cash, as always, is King. And maintaining a lean cost base while investing the right amount of money in the right area of the business is a top priority. "We must remain efficient and nimble, driving profits harder and ensuring we are in a position to react to market changes and opportunities as they arise" added Shelton. "We are a disruptive company focused on delivering what the customer needs. Therefore, sales, support and technical expertise are crucial.

"Rapid growth comes with pain and we need to ensure we have the right people who are trained and supported. Our channel partners have been patient and supportive, and we are now in a position to embrace these relationships and significantly step up this side of the business."

Finding a balance between short-term revenues to fund growth and overheads while growing a long-term recurring revenue stream is grist to the mill of most ICT providers. So not surprisingly, Shelton doesn't undertake adhoc projects with a non-recurring revenue model. "We have a mix of capital and operational incomes from all that we do," he explained. "This allows us to scale and have predictable revenue streams, creating greater value for all stakeholders."

The proof of Shelton's recipe for success is in the eating and this year he is on track to triple the size of the business having secured a number of IT managed service contracts and customer wins totalling more than £10 million. "Everything I have done has brought me to this place," he said. "I am lucky to have worked with many great people over the years, and on delivering complex solutions in 42 countries. But I am most proud of being at the helm of ITS. We have a great team, great customers, supportive partners, and we have created and safeguarded almost 60 new jobs, making a difference to a lot of people."

Gamma is extending the promise of UC to its partners at a time when end user demand seems certain to drive 'unification' towards market dominance.

For some time, organisations have been seeing an increase in demand from employees for remote working and more choice in the way they communicate. The way people work, interact and collaborate continues to undergo profound change, and in response to this 'pressure' more organisations are turning to an agile and secure UC infrastructure. UC is bridging the gap between telecoms and IT by integrating email, voice (fixed and mobile), IM, presence and video, giving users access to different modes of communication to help them stay connected with anyone, anywhere and at any time. This collaborative way of working offers great benefits to employers, from increased productivity and efficiency to improved customer service and a happier workforce.

A number of Gamma's channel partners are making good headway towards becoming UC providers. The company has witnessed a positive response to its recently launched Converged FTTC product (which combines voice and data onto one FTTC circuit) and its Convergence initiative (a commercial initiative that combines selected communications services from Gamma).

The Converged FTTC broadband service includes support for 30 uncompressed G.711 voice channels, providing access to ISDN quality voice and superfast Internet access on the same circuit with end-to-end QoS. Integrating voice and data communications on just one circuit rather than buying two separate lines means a reduction in costs, with the added benefit of providing end customers with a robust service and support SLAs.

"This is a great selling opportunity for resellers. They can benefit from stronger ongoing relationships with their customers and open up new opportunities to sell voice and Internet access," said Daryl Pile (pictured above), Head of UC Sales at Gamma. "It can also prevent competitors breaking into accounts by creating customer lock-in."

The shift in how workforces want to communicate, combined with the growing demand for a single source supplier creates a lucrative opportunity for the channel, one that's making telecoms companies sit up and take notice. "The workforce is beginning to outgrow the more traditional telecoms solutions, and resellers that haven't already embraced UC technology must do so to leverage this opportunity before they get left behind," added Pile.

Stephen Ashley-Brian (pictured left), Convergence Product Manager at Gamma, pointed out that every business has a need to buy voice, mobile and data services. "Research shows that more than 55 per cent of SMEs either have, want or are in the process of getting a single supplier for these services," he commented. "The fact that adding just one additional service can reduce churn by 25 per cent means the opportunity is obvious. By offering customers a single source for all of their communications needs, resellers can build stickier relationships, reduce churn, target prospects with a compelling solution and, ultimately, increase the value of their customers."

A full UC solution brings with it increased complexity in joining the underlying building blocks (data access, system requirements, collaboration tools and number porting) which lend themselves to communications providers who are nimble and able to respond to the bespoke needs of customers they know well. Pile added: "This epitomises the channel. Looking ahead at where UC will take the channel, I see partners playing a pivotal role in providing their own branded wrap of UC services.

"The challenge will come as end users demand more sophisticated and slicker interfaces that envelope the individual elements. To a greater and greater extent UC will need to work, look and feel like one complete product. For Gamma's part, we're putting significant investment into making it as easy as possible for channel partners to do this using our services."

The 'unified' story is also recognised by Gamma partner Dean Ison, Managing Director at Max Telecom. "Providing our customers with a complete business communications solution has been pivotal to our success," he explained. "It enables our customers to not only have a single point of contact, but to genuinely get good value for money.

"We've started taking advantage of Gamma's Convergence initiative which lets us combine a number of products, such as SIP trunking, mobile and converged access, into convergence bundles, meaning we can offer our existing customers the best possible deals and target new prospects with a commercially competitive proposition."

Elitetele.com CEO Matt Newing has cannily played the role of serial acquirer for seven years and there is no stopping him. Here, he offers a seller's guide for company bosses wanting to cash-in their hard earned chips.

The UK IT and telecoms sector is abuzz with M&A activity and ICT company owners are well positioned to earn a high valuation when selling their business. But navigating the acquisition landscape requires a strong strategy, sector expertise and sound, impartial judgement as there are many pitfalls, and it is important for sellers to work with industry professionals and experienced buyers to ensure the best and most profitable outcome. Whether actively selling or being approached by a larger businesses as part of a targeted acquisition strategy, IT and telecoms business owners would be doing themselves a big favour by considering the following steps to ensure the process is as smooth and successful as possible for all parties involved.

Appropriate funding
When approached by a potential buyer, check the appropriate funding can be sourced. Not all potential acquirers will have finance in place and access to finance is often a key reason that halts acquisitions. While a buyer will ask you lots of questions about your business, you should also ask them about their business. This will tell you whether they really have the ability to conclude a transaction.

Review tax implications and benefits
It is important to be aware of any tax implications or benefits that may exist before engaging in an acquisition. There are potentially significant tax advantages to business owners when selling a business but tax regulations change year-to-year, so ensuring you know your position will be important. This may impact the proceeds from a sale so it is crucial to factor these into any decisions.

Understand deal structure and flexible integration
For business owners it is important to have the flexibility to negotiate integration terms that suit both parties. This entails negotiating whether payment will be entirely on completion or staged, and whether any staged payments are linked to performance (known as an earn-out). An earn-out gives the seller the opportunity to further increase the value of the business over an agreed period of time to achieve a higher overall payment.

Ensure business as usual
It can take time to find a buyer for a business, and the actual process of completing a sale can be time consuming. During this period, the business must continue to run as usual and ensure a profit is being turned. Failure to do this means the business can be at risk of becoming less valuable, which can lower the chance of selling.

Due diligence
Perhaps the most important step in the acquisition process is to carry out due diligence. This entails a detailed investigation of the company being bought. The process ranges from delving into finance to interrogating billing systems, an essential step in identifying how to integrate businesses and the value of the deal itself. Sellers should prepare by gathering any documentation potential buyers will require, such as past financial statements. The more sellers prepare for this stage the better the chances of selling the business.

Manage communication and minimise disruption
Once the structure of the deal has been agreed it is necessary to plan effectively for a post-deal world. It will come as no surprise that the management of communication and minimisation of disruption following an acquisition can be hard. In fact, it has been found that more than half of mergers and acquisitions will fail as a consequence of ineffective integration of information and processes when companies join forces.

With this in mind, it is essential that businesses have a clear guide on best practice and work with an experienced buyer to factor in solid communication with staff and customers to minimise confusion. This will ensure that companies are making the most of the benefits that are commonly overlooked, such as using existing staff knowledge to its full potential, and also planning ahead for any challenges that could arise.

Look out for the warning signs
It is important for businesses interested in selling to be aware of competitors with 'nosy' intentions who are just hoping to find out information rather than acquire. Sellers can spot a genuine buyer by looking at its history of undertaking acquisitions. Ask whether they have proof of funds or can show they have funds available to buy before opening lines of communication, and ask about previous acquisitions they have undertaken. You should also seek references from previous business owners that your potential buyer has dealt with.

Experience shows us that hosted could become the default mode of operation for contact centres where cost, scalability, DR and flexibility are prime considerations. Throw integration into the mix and strong arguments in favour of the consumption-based model could be unassailable.

Customers evaluating a new contact centre are requesting cloud as an option, or considering cloud within their strategy, according to the observations of Rob Keenan, Head of Portfolio Management at Unify (pictured). There is concern still about cloud in terms of reliability, he says, but cloud now has greater acceptance due to improvements in connectivity and the need to support remote offices and agents. "The benefits of cloud are greater than the perceived risks," stated Keenan. "In the SMB sector, cloud is becoming increasingly common with many small businesses wanting to consume a service where and when they need it."

The market is moving towards the consumption-based model, and cloud is the way forward, believes Keenan. "The idea of owning and selecting a contact centre application is getting out of date, and compared with the ease of use and deployment advantages that cloud provides, it's a less controllable financial model," he added. "Contact centre managers are not just wanting to replace like-for-like, they are looking for a more integrated contact centre."

Solar Communications has witnessed a shift in technology buying away from capex models to opex in the contact centre and core comms infrastructure markets. "While hosted penetration is still low, we are seeing more demand for hosted services and applications, and this market is set to double over the next five years," noted Darren Standing, Head of Products and Marketing, Solar Communications. "The demand for hosted is not only being driven by a need to eliminate capital expenditure. A key driver is the flexibility it gives businesses by enabling remote working which can significantly reduce costs. For those with seasonal business there is the added benefit to hosted of being able to quickly and easily flex the workforce temporarily at peak times."

The contact centre space is a key market for Solar and it aims to repeat its success with on-site contact centres in the hosted environment. "We are evolving our proposition and looking to develop a portfolio of inter-related solutions," commented Standing. "And we are finding that a hosted or cloud contact centre offering is a great way to begin building a relationship with new customers as the solutions are not disruptive and value can be realised quickly."

The main priority in Solar's hosted contact centre strategy is to build an initial solution set that addresses all the needs of a contact centre, not just the core communications infrastructure. "The hosted model is the future of the contact centre," emphasised Standing. "There are clear benefits in enabling companies to cost-effectively create a remote and flexible workforce, and it goes a long way towards ensuring business continuity.

"Hosted should be part of any disaster recovery plan, particularly for contact centres where they become the primary point of contact between a business and its customers. For example, a hosted contact centre ensures that if you cannot access your business premises, customers can still speak to contact centre agents using the same numbers as usual."

Adoption of hosted in the contact centre market has been more gradual than anticipated, primarily because existing investments and security present a barrier. Six out of ten organisations now use cloud-based applications, but this level of take-up isn't reflected in the contact centre arena where just 15 per cent of seats are currently delivered via the hosted model, according to Sabio's founding Director Adam Faulkner. "The reasons for slower adoption include initial uncertainties around data security and issues about the functional compromises offered by first generation cloud contact centre applications," he said.

"We've seen a number of cloud-based contact centre systems come to market and, although they've worked well for some businesses, it's fair to say they haven't necessarily delivered the in-depth functionality that leading contact centre operations demand from their customer engagement platforms. If your business has made a major investment in core technology from best practice vendors, then it's always going to be hard to dial back functionality just to take advantage of a different hosted delivery model."

Having spent the last two years successfully deploying hosted solutions for customers that need to take advantage of a more flexible contact centre technology infrastructure, Faulkner believes that now is the right time to bring Sabio's experience to market with its new OnDemand fully integrated hosted contact centre offering. "With Sabio OnDemand we're introducing a fully integrated hosted service that provides contact centre operators with access to customer contact communications and workforce optimisation solutions," he explained. "Sabio OnDemand takes advantage of our international virtual hosting capability, while also leveraging the knowledge and investment that we've built up in successful contact centre technology deployments over the last 15 years."

Organisations need to continually balance the benefits of hosted versus on-premise deployment. At Sabio's recent Find a cloud with a platinum lining event, for example, attendees were keen to debate the values of opex and capex, and the role of cloud-enabled solutions for more sensitive applications, as well as the benefits of a dedicated hosted instance versus operating on a shared cloud platform. "There isn't a single right answer to any of these questions," stated Faulkner. "That's why it's important for organisations to provide customers with an informed choice for their own specific applications."

8x8 Solutions has seen a trend in smaller businesses mirroring the customer service levels of much larger companies. Advanced features, once only available to large companies, are now available to SMEs through the cloud. "This means companies can deploy secure solutions cost-effectively and with the option for scalability," said David Rowlands, UK and EMEA Head of Virtual Contact Centres at 8x8 Solutions. "Equally important, cloud solutions allow agents to be geographically independent. Office closures are no longer an issue."

8x8's Virtual Contact Centre has always been designed for the cloud. With over 100 patents, 8x8 is serious about innovation and bringing new features to market quickly. Updated features can be deployed at the click of a button. "We react to market needs with speed and recently updated WeChat, Call back requests and Multi-Chat, because this is what our customer base wanted," commented Rowlands.

"With the cloud, businesses can update their systems quickly and efficiently, without the need to wait for additional hardware. Traditionally, there could be ongoing issues with integrating call recording and workforce management systems, however 8x8's intuitive solutions are designed to integrate these seamlessly. The hosted model is clearly the future of contact centres, as on-premise multi-supplier solutions don't deliver in terms of functionality and cost-effectiveness. Businesses need to make sure that they are well prepared in the event of a disaster or extreme weather, and cloud hosted solutions are the only means to protect them against every eventuality."

Analysts predict that in this growing market, choosing your supplier based on skill, stability and deliverables is key, according to Rowlands. "I believe that it is important to monitor third party integration such as Zen Desk and Salesforce," he said. "Integration and open APIs will be critical for the future of hosted contact centres."

ShoreTel has seen first hand increased adoption rates of hosted contact centre solutions in general. Not only among small businesses, but also large ones. And the way enterprises view the contact centre is changing, noted Adrian Hipkiss (pictured left), Vice President EMEA, ShoreTel.

"We have seen a shift towards the whole business being involved in customer service, meaning that contact centre functionality is now used across the broader enterprise," he said. "We're also seeing that enterprises want true flexibility in their solution. Flexibility doesn't just mean flexing up, but flexing down too. It's clear that companies are moving towards multimedia and becoming less voice-centric, with agents performing multiple real-time interactions via voice, email, webchat and social media. All of these aspects are having a big impact on the hosted contact centre market."

Whether firms want cloud, premise or hybrid, ShoreTel believes that the same solution should be available via a simple, intuitive user experience across all deployment models. "The ShoreTel Hosted Contact Centre solution is available in different profiles, from basic routing to increasing levels of sophistication, which guarantees a full multimedia contact centre," added Hipkiss. "The solution is also available on a per-person basis. And our priority is providing functionality and feature sets inside our new user interface."

Cloud solutions have an important part to play, but only when they are apt, pointed out Hipkiss. "It doesn't meet all the needs, and nor should it have to," he said. "I envisage a single, common user interface across cloud, premise and hybrid so that resellers can mix and match at will to meet their customers' needs."

Comms Dealer caught up with Mitel CEO Rich McBee (pictured) and newly promoted Graham Bevington, now Worldwide Executive Vice President and Chief Sales Officer, at the company's recently refurbished London offices to find out what direction the comms giant is taking and what this means for its traditional and future UK channel partners.

Most readers of this magazine will know that Mitel is a big business, a very big one. Many, however, may be unaware of the true scale of its global footprint, so here are the facts. The company now operates in over 100 countries, has 60 million end user customers, last year netted $1.1 billion in revenue and has the leading market share for the total PBX market across Western Europe and across EMEA.

Aside from this growth and success it now has the charisma and cash to get businesses it takes a fancy to up the aisle when it wants. The recent courting and acquisition of the mobile software business Mavenir Systems for $560 million is a case in point. For Mitel, it was a missing piece in a Unified Communications and cloud growth strategy that still has the channel at its core, as Bevington was keen to stress.

"I have been in the UK with Mitel since January 2000," he said. "Our go to market strategy was channel-based then and it still is. We haven't changed. We have been consistent and continually drive our business model towards the channel. The challenge our channels face with the rest of the market is changing business models, and what you are getting with us now is an evolution of where the technology is going and an ability to migrate with it."

Helping more partners take a walk across Mitel's bridge to cloud-based services is paramount according to McBee who unveiled a staggering fact. Mitel maybe the No 1 PBX supplier in Europe and EMEA, but now has only 10 hardware engineers in the whole company out of 700. "And you know what they work on? The sets. Everything we have is software," said McBee.

This sea change in Mitel's business towards software-based services is borne out by the success its partners have achieved in migrating customers to cloud communications. In the fourth quarter of 2014, Mitel installed over 177,000 new cloud seats, including over 24,000 recurring cloud seats. And year-on-year, Mitel's recurring cloud seats have increased to 269,155, up 122 per cent and its total installed cloud base has increased to over 1,039,000 seats, up 83 per cent.

This success has been achieved across all business sectors which has been central to McBee's strategy in building a new Mitel. "What I like about the company now is that we can address SMB, medium enterprise and large enterprise," he added. "In every one of the countries we operate in there is a different mix of those, but we have the solutions and the products to cover it all. It's a new Mitel. People are getting the sense that something special is happening. There is always some kind of forward movement with this company.

"And I really think that is the case country by country. Because if you take an enterprise country they see us entering into the cloud, they see us in contact centres, they see us building up SMB. If it's an SMB country they see we have cloud and large enterprise solutions. I feel that Mitel is the healthiest it has been in a long time and the opportunities ahead of us are bigger than we have ever seen because we can literally play in large, medium and small on premise markets, public and private cloud and contact centres across the board. And with the acquisition of Mavenir, we are moving into the mobile space so we have all of the mobile technology, which is just a natural evolution in the enterprise space.

"The advantage we saw in the market is that Mavenir is an all software company. There is a seam in the technology term between 3G to 4G. It is a fundamental change at the core network going to an IP network. If it was still a circuit switched network then there is no way that we could compete because Alcatel-Lucent, Ericsson, Huawei and Nokia Siemens have really got that locked up. But the strength of those companies is also their weakness. They all have a huge heritage of dedicated hardware to make the circuit switch network work.

"The 4G network is all software at its core. That is key. That is the seam that Mavenir worked itself into. With this deal carriers and resellers will be able to provide bundled packages with the mobility and fixed enterprise features built in. They are going to become pretty sticky with customers and they won't have to introduce another player into their sales process. It's not a tomorrow thing, it's a future thing and it's exactly why we made this strategic acquisition. It's a growth pillar for us into big markets that are transforming."

Campaigns are already underway to attract mobile service provides into the Mitel partner family alongside those that have already met with success, as Bevington explained. "We have a specific campaign built around trying to attract and develop that side of our business. We have recruited mobile service provider Olive and it is now one of our most successful UCaaS partners.

"Mobile service providers have a different mentality and a different structure. Olive is a shining example of a mobile service provider that has found our UCaaS service easy to sell because they take it for what it is, sell it in its purest sense and have achieved some great successes. This is about simple, standard or executive solutions. It's an extension of a cloud service the client already has.

"Having said that, I actually think that our traditional channel is evolving and migrating all the time. What we are doing with Mavenir says to the market that we understand that fixed and mobile are coming together, and working with Mitel is a good place to be. We have created a company through Rich that is capable of getting there, but then as we go to recruit alternative channels such as digital print, which I think is a very exciting channel opportunity, we'll be very specific about how we recruit them and what we offer through them. We will make sure we don't compromise our traditional voice resellers. That is where we are trying to go."

Underneath all this, as Bevington stressed, Mitel's SMB business continues to flourish through its developing relationship with Trust Distribution. "Our fastest growing business is our MiVoice Office 250 business in the UK with Trust Distribution," Bevington commented. "It was our best performer last year in terms of units, in terms of percentage growth and in terms of value percentage. MiVoice Office 250 unit sales have increased by 20 per cent in the last 12 months and our value has grown by seven per cent. We have targeted other vendor resellers and won them over."