Report by Stuart Gilroy: Cloud communications integrator Content Guru in conjunction with Comms Dealer has hosted a working lunch for industry leaders with an agenda to assess the state of the UK cloud market and highlight why the channel must get fully prepared for this growing force in business communications.
Cloud evangelism no longer emanates from a fanatical corner of our industry, today the preachers are setting the standard in a dynamic market. And according to Content Guru's gospel, the cloud is here to stay and can do no wrong. Sean Taylor, the company's Managing Director, is driving the cloud debate with conviction and he believes that the coming two years will be a 'make or break' period. He predicts that up to six big players will emerge to dominate the cloud space over the next ten years and his intention is for Content Guru to be part of this elite group. Taylor aims to create a £400 million company by 2020 and strategic channel partnerships are a key component of his growth strategy.
But why should comms and IT resellers build new business models when they see no need? Because without a cloud strategy they will have no control over the future of their organisations. And according to Taylor, resellers who harbour a grievance against new technologies are likely to sink without trace. His conviction was bolstered by insights gained at Gartner's Symposium event held in Barcelona last month, attended by 6,500 CIOs all driving in the cloud direction. "After years of expectation the cloud has taken off," stated Taylor.
The market for cloud communications is forecast to grow 20 per cent per year between now and 2018, meanwhile PBX sales have entered into a tailspin. True, there is a deluge of predictions about the future of cloud-based comms, all positively glowing, but these predictions risk being wrong-footed by nitty gritty issues such as selling to the end user. A tension between the push to productise cloud solutions and the equally strong requirement to take a consultative approach in order to effectively sell them appears to be a sticking point for many providers. However, Content Guru has devised a method that side-steps this issue.
"Focusing on business outcomes can be a challenge for traditional resellers," commented Taylor. "In the volume SME market we have productised and given customers what they want. Many resellers do not understand culturally how to consult. Therefore we engage with them at a commodity level and introduce a process of education that virally works through their business, enabling them to ultimately add value around our cloud propositions."
Productisation and consultancy selling are a blazing contradiction in terms, and therein lies the challenge within a SME market ripe for growth but served by resellers who are loyally wedded to product selling techniques. "The issue is how we educate sales people," said Grant Picknell, Head of Sales at Griffin. "Initially, a consultative sales person is needed. The consultation piece is critical to inform customers about the benefits to their business. But as people become more familiar with the market we can start to productise and 'box shift'. Our focus is to take people away from transactional sales, but not all sales staff are capable of this journey."
Michel Robert, Managing Director at Content Guru partner Claranet, has successfully addressed the need to transition away from traditional dealer selling methods in favour of consultation. "Pay plans have to work holistically and reflect the behaviours that you want to drive," he commented. "This process needs to be ongoing to ensure that sales staff are aligned to their markets. It isn't easy and requires continual investment. Closing deals is a team effort."
Cloud utopias are more likely to match the future requirements of business organisations than traditional comms, and the 'born in the cloud' builders of this new world order include Content Guru partner Vapour Media. Its Managing Director, Tim Mercer, noted a big push from customers who desire an end-to-end solution based on a cost-per-head format. "Our mantra is 'cloud made easy'," he commented. "We offer three product sets and control the network access so everything else that runs over it is just an app. The cloud market must be made easy to understand. Partners also want control and flexibility."
Resellers value their flexibility to pick and choose whether they adopt the cloud, but this has to be balanced against the interests of their customers who, with the boot on the other foot, can also roam at will. Here lies the road to defeat for comms providers who turn a blind eye to the 'cloudisation' of business communications sought by a growing body of end users.
If you’re not convinced yet, perhaps the following news will raise an eyebrow. Vendor giant Panasonic has seized the cloud opportunity by teaming up with Content Guru’s sister company Radius Communications to sell its storm Cloud PBX and Contact Centre services. While CPE is by no means a lost cause the coming years offer fertile ground for growth in the cloud market believes Warren Bone, Distribution Sales Manager at Panasonic. The vendor’s link-up with storm is a clear sign of the times and serves as a warning to all cloud sceptics who think cloud 'froth’ is here today but will be blown away tomorrow. The truth is far more substantive and to ignore it is a great miscalculation, noted Taylor.
Bone, however, conceded that convincing a significant PBX vendor to shift direction was no easy task. "It's been a battle but we are bullish about the need to change," he said. "Panasonic recognises this imperative and we have strong backing from Japan. The cloud initiative is being led by the UK and it represents a huge opportunity for Panasonic and our resellers. All eyes are on us because we have a very traditional channel. But the move to cloud is ultimately driven by the end user."
Diversification into the cloud as a means to growth is turning traditional business models on their head, enabling organisations to become more agile and cost-efficient because they have access to virtualised resources that are delivered as a service. Enterprise companies are at the vanguard of this change and are deep into the adoption phase. Meanwhile, in the SME market companies that have spent time contemplating the merits of hosted comms are now on the cusp of adoption. Now is a critical point for comms providers when policies must be finalised that will define and fix their forthcoming cloud campaigns, according to AlwaysON Managing Director James Byles who says now is the time to show true leadership. "If you are not doing cloud your competitors will be," he stated. "Cloud is on the verge of mass adoption because people are buying into it."
Cloud providers have two powerful weapons in their armoury - the ability to offer unprecedented levels of scalability and flexibility - and these are assets upon which campaigns should be built. At the top end of the market enterprise customers want all of the features and functionality cloud offers and in this sector there are resources to flex and bespoke solutions, observed Phil Grannum, Managing Director of Griffin. "But for SMEs it's about dumbing solutions down because they need to be pre-packaged and simple to sell," he said. "This is the biggest challenge."
The choice for traditional communications and IT providers with their back against the wall is to throw up their hands and run elsewhere or step up to the plate. And according to Steve Palmer, Product Market Director at Azzurri, a simplified view of cloud comms will demystify and unlock the potential for resellers with an ambition to survive. Cloud, after all, is no 'grand project'. "The cloud is a good levelling tool," he stated. "It's just a delivery mechanism that customers use as part of the overall solution. The blend between managed services and cloud over the coming two years will be critical. Our managed services portfolio incorporates a series of productised components that build together and provide different business outcomes."
It's puzzling how we can have a government tightly wrapped in the G-Cloud flag while at the same time debates about a SME wrap rumble on in apparent perpetuity. Clearly, the cloud is a viable option that may eventually push out traditional technology. Edward Winfield, a SaaS specialist, played what he believes to be the cloud's trump cards: "The cloud scales up and down according to demand and has created a revolution in the charging mechanism," he said. "The cloud is inherently flexible and offers the ability to mix different products seamlessly."
Despite convictions such as these some things are ultimately beyond our control, like predicting with absolute certainty how the comms landscape will look in the years to come. However, being prepared for 'come what may' is the only strategy and any form of cloud investment makes more sense than none at all. After all, there is no argument wafting in the clouds against it. "Cloud is growing and you've got to get in there," added Taylor. •
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