The UC Channel Challenge
In short, the channel needs help, and the vendors that can help them navigate this transition will significantly improve their chance of success.
The acceleration of UC adoption is dependent on vendor support and education for the channel. At the current pace, UC adoption will be much slower than what it could be, which will impact the ability for some vendors to thrive or even survive.
Over the past 40 years, the channel has evolved to sell and support an ever-changing set of technologies. Interconnects rose after the CarterFone Decisions, while VARs and VADs evolved with the introduction of mid-range computers. In the 1990s, telecom and converged resellers had to learn about data and computing to support CTI, after which they needed to evolve to understand data networks and servers to support VoIP/IP-PBX.
Now the channel will need to evolve in order to sell and support unified communications, as well as the related applications and CEBP. Adding to the complexity, cloud and hosted services and virtual machine technologies are now being added to the mix. At each stage the challenge became more complicated and the channel needed (and needs) more support and education from both vendors and industry experts.
In addition to changing technology, the channel faces business model and strategic partner challenges. To date, most of their sales have been in the form of a one-time capital expenditure--that means a big upfront payday for the reseller with a small monthly residual for ongoing support and service. With the move to cloud and hosted services, the major part of the income stream is spread over 24-60 months. This is a major shift in a reseller's business model, and one that will be difficult for many--if not impossible for others--to adopt.
As call control and other communication services have shifted from hardware to software and companies like IBM and Microsoft have entered the communications market, many resellers, particularly traditional voice specialists, are finding that they make little or no profit on software. This is forcing them to turn to the data reseller model where most (if not all) of the profit is in services.
Resellers are also facing pressure related to their vendors of choice. While the legacy switch vendors are trying to keep their resellers in the fold, the new players (Microsoft and others) are trying to convert them to their side. The resellers that decide to make the switch face the challenge of how to manage the transition and the repercussions of leaving one vendor for another. For example, many resellers depend on loyalty programs and volume discounts from their current vendor to make their existing business model work. For them, the transition can be painful and costly.
In short, the channel needs help, and the vendors that can help them navigate this transition will significantly improve their chance of success. Most vendors claim they are working on or have programs in place to help support and educate the channel about UC, cloud services, virtualization, and other important technology areas, but the sad fact is that most fall short of being able to move the overall UC adoption needle. The vendors have done a good job of educating the market about UC, even with all the confusion surrounding UC definitions, but they have done a poor job educating and preparing the channel.
UC Strategies is already taking action, moving towards our fourth UC Summit at which sponsoring vendors meet with highly qualified channel leaders to discuss these critical UC channel issues. Much of this is based on ideas I have on how vendors and others in our industry can work to support and educate resellers and help the overall UC market grow, a move that will benefit both the vendors and their channel partners. I'll be writing about this in the coming weeks and months, but feel free to send me a message if you would like to hear more.