Hostifying IP PBX? The Advantages and Challenges of Evolving to Recurring Revenue Solutions

Some of our most innovative EtherSpeak resellers have begun to leverage EtherSpeak SIP for enabling a new “recurring” revenue stream – IP PBX Hosting. Not sure if you thought about offering a hosted version of what you are authorized to sell – but if you decide to do it – a good communications-as-a-service provider can help you overcome some significant hurdles to get the new line of business running.

It typically goes like this: Customer is reluctant to buy the new phone system because they got killed in the past on some of the hidden costs like annual maintenance; network upgrades; monthly move-adds-change fees and possibly maintaining overhead for tech staff qualified to manage the new Unified Communications system.

So, the reseller says “OK, this time around, I won’t sell you our new (insert your brand here – ShoreTel, Cisco, Zultys, Vertical, NEC, etc.) system Mr. Customer – I will rent it to you.” Customer nods, “In return, you pay me a fixed or variable price per seat for a defined term – usually one to three years.” Customer likes it (he doesn’t have to buy nearly as much), and the reseller closes the deal, sells / rents the customer some IP handsets and other network gear necessary to run the solution properly – and everyone is happy! But wait, then the reseller considers a few things on the way home – he/she just took responsibility for the customer’s communications – soup to nuts! Nice job man, don’t be shy, you just stepped up to the world of recurring revenue! Take this advice however, “Just take care to prepare!” You must deliver a good solution, comply with the rules, while controlling costs – so you make a profit each and every month.

So, maybe you know all that already. But, did you know that partnering with a communications-as-a-service provider (like EtherSpeak) helps you overcome some challenges with developing a hosted business model?. A SIP communications-as-a-service provider can provide the following:

1. Access to the world of telephone numbers for inbound calls – and availability of the connecting to the world for outbound calling
2. Excellent advice on delivering quality of service and more appropriate and good “Quality of Experience” or QOE from the user perspective. If the calls stink, you are sunk.
3. Access to a private label billing system because maintaining a professional brand is very important
4. Along the same lines – using the providers investment in systems, process and technology to maintain compliance with Lawful Wiretaps (CALEA) and providing for regulatory compliance with 911 and taxing authorities.
5. Most importantly, find a partner that enables you to sell the system that you know and love “as-a-service” (which is “code” for monthly managed services revenue for telecommunications Value-Added-Resellers).

So, if you are considering how to develop a new recurring revenue stream, consider “hostifying” your product and partner up with you communications-as-a-service provider. Then work together to provide an excellent and profitable service for your customers benefit.

Neil Darling
EtherSpeak

Hey IP Phone Manufacturers – What Have You Done For Us Lately?

I was speaking with a customer the other day and he was asking me my opinion of “this SIP based IP Phone handset vs. that SIP based IP Phone handset” and I realized after seven years of selling the devices, they haven’t changed all that much. By and large, the biggest expense for customers moving to VoIP is the cost of the handset. Models from Polycom, Aastra, Snom, Grandstream, ShoreTel, Zultys and Cisco look very different – but they all comply with the SIP standard for core functions like Hold, Park, Transfer and Three-way calling features. Some proprietary handsets do some neat stuff – but that stuff doesn’t hold a candle to what an iPhone or Blackberry can do now with their implementation of useful business and personal applications.

What I think is lacking is that these devices are essentially Linux endpoints capable of doing so much more. Why can’t I program my DVR; turn the lights off and on at the house; or glance at calls in queue at my call center? Most models incorporate a micro-browser – some come with color screens – but not a one of them can help me record the last episode of “24” on my DVR since I am running late at work (again).

What exactly is a customer getting for that ~$100 to ~$700 unit price other than different look, ergonomic plastic and pixel density? On the other side of things, the iPhone and Blackberry (or “typical” smart phone) are the main business tool used by most knowledge workers. I would wager that for many of us – we do more minutes on our cell phone for business use than on our expensive IP Phone. For purposes of my blog, let’s define a a “knowledge worker” as an individual who works in front of an Internet connected computer. Perhaps a bluetooth enabled speaker, bound to my iPhone will enable those mobile phones to totally usurp the role of the expensive black plastic box taking up space on my desktop. What if knowledge workers foresake the tethered IP Phone and accept the cell / smart phone instead?

Personally, I use my iPhone for the majority of my phone calls in my normal day at the office. The reason is that our Unified Communications solution allows me to do that. Since Unified Communications has enabled me to use the iPhone to essentially replace the majority of my usage on my office Aastra handset – I am growing to like the standardization of using my iPhone for everything. I do use the Aastra for the speakerphone – but overwhelmingly I am using my iPhone and it’s applications to aid me through my business day and my personal day (I love playing Zynga when no one is looking).

Further, I blogged recently about Magic Jack’s introduction of the residential Femtocell (http://tinyurl.com/yk8kl7e). Well, AT&T recently announced their own offering. The AT&T version of the Femtocell (or Microcell) essentially supplants 3G cell and data connectivity from the local cell tower to a small access point like device in my office (according to AT&T (http://tinyurl.com/lbwweh). When you walk out of range, you are back on the cell tower. The cost will be about $150.00) and routes AT&T cell and data usage over my existing broadband for a nominal cost (for up to 10 handsets). Calls routed this way cost me a flat rate $20 per month. This effectively limits using up “air-time” for those employees who want to use the cell phone for personal reasons while away from the office – and my forthcoming mandate in making them use the cell phone while within the office – and not using their precious personally paid minutes.

So what is next for the IP Phone? Should we start considering eliminating the IP Phone from the bill of materials when quoting a solution to a customer and relegate the use of the IP Phone to lower-end models for the desktop – or specialty models for the conference room? Perhaps an iPhone or Blackberry IP PBX in the cloud may supplant the requirement for an IP phone for most Unified Communication solutions. More on that later…

For now however, I think the value of the IP Phone is lacking and may no longer hold the place it once did when I began this career around IP voice and video some time ago. It is increasingly difficult to justify the one-time expense now (in this economy) that most are standardized for SIP. They all pretty much do the same thing.

What say you IP Phone manufacturers? Are you losing your value and utility within an open-standards based Unified Communications environment? I think the answer is a definite maybe. If you have an opinion, I’d love to hear it!

Neil Darling
EtherSpeak
http://www.ietherspeak.com
703-221-9999

Magic Jack Releases a Residential Femtocell?

My Dad was right, he recently sent me an email stating, “that those guys and gals at Magic Jack are up to it again”. For those of you who don’t ever have insomnia and watch late night infomercials on the television, Magic Jack is a service that requires a $40 USB device that plugs into any PC. After you plug it in, you plug your analog telephone into the other side of the device. You then have the ability to make and receive calls for 12 months for the $40 – no per minute fee, no monthly bills- Magic. After a year, annual renewals are only $20.00. I have not used the device myself, but I might head to my local Radio Shack and pick one up this weekend.

I came across Michael Finneran’s blog regarding Magic Jack’s release of Femtocell technology into a version of the product (Magic Jack Works Their Magic in Femtocells). Femtocell is basically a cool name for a residential cell tower. When you are in proximity of the cell, in this case the Magic Jack USB device plugged into your computer, your cell phone recognizes the Magic Jack cell and uses it instead of the cell tower. While in range, all calls you make are air-time free and all your talk goes over your residential broadband – not back to the carrier cell tower.

The ramifications of this development are significant – most notably the life-cycle cost of new technology has immediately gone down – even before the mainstream release of Femtocell technology. I am sure there is some fine print and areas of concern with the new service – but it is an exciting development nonetheless.

Neil Darling
EtherSpeak Communications