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The delivery of cloud based applications that provide effective, fast alternative solution to the traditional CPE based delivery model is dependent upon many factors not least of which is the quality of connectivity and the robustness of the application hosting data centre. And let’s not forget the application itself and its ease of use.
These interdependencies are critical to the user experience and expectation – any one of the three failing will let down the other two no matter how good they may be individually.
This guide examines the connectivity options available to the channel and how to select the right option for the user and the application required. At the same time we will report back from key data centre operators the issues they face in getting maximum uptime and how they meet these challenges.
And what of the applications themselves? Our main thrust here will focus on how resellers can monetise the supply, build recurring revenues and retain customers.

In your opinion, how has the channel responded thus far to the cloud sales opportunity?

We have experienced great demand for faster internet connections as more and more SME’s utilise cloud data services. However, this is the opposite to the uptake for voice. Many resellers still regard hosted PABX as a SOHO solution, as they have experienced problems with enterprise call volumes carried over the internet. For hosted PABX to realistically challenge on-premises options, the supplier must guarantee end-to-end Quality of Service backed with a Service Level Agreement and a money-back guarantee.

What would you say to a reseller that says, “I still make great margin selling on premise solutions, I don’t need to move into cloud services”?

With QoS in place and a zero-rental SIP account commercial offer, hosted PABX becomes commercially better, faster and cheaper to deploy than any on-premises platform. Savings are significant, we find routinely that 40% is achievable.

Is it reluctance or lack of understanding that is holding some resellers back from the cloud opportunity?

Neither of these are significant, resellers are generally well aware of the cloud opportunity for voice. With a supplier guaranteeing end-to-end QoS and lower forward operating costs than any on premises / ISDN-based option, the main barrier to entry is the re-tooling cost. Migrating a legacy base and re-training sales and support teams is a lengthy and costly business, as well as a distraction from day-to-day operations.

On obstacles/ barriers to entry for providing cloud services...are these still the same as they were twelve months ago?

Yes I think that the re-training and re-tooling costs remain as substantial as they did 12 months ago in terms of both time and money.

Skills...do the channel sales teams have the right skills to sell cloud/ hosted applications? Do we need to retrain our salesmen?

It is far wider and deeper than putting together the commercial model. Resellers should engage in a 24 month plan to re-shape their entire business, if they are serious about selling hosted telephony on an enterprise scale.

Capex to Opex... Why do some resellers find it so hard transferring from one to the other? How can they get around this and still keep the suppliers, salesmen and, more importantly, themselves happy?

The capex to opex migration can be achieved with a solid partnership with a reputable hardware leasing partner. This ensures the reseller is paid on completion, but the client pays down an OPEX rental over the contract term avoiding up-front capital cost. Even with the hardware rental budgeted for, resilient SIP connections with guaranteed QoS are so much cheaper than ISDN services that it is still invariably cheaper to migrate a client to a guaranteed QoS hosted platform than to replace on-premises hardware and retain ISDN. Everybody wins.

Do you think CSP’s invest enough in the educational piece when it comes to cloud?

No – I think most CSP’s only offer hosted services via the Internet, and without QoS resellers can only sell hosted into the SOHO market without causing themselves problems.

How do you convince a reseller to push hosted technology over other on premise solutions?

We explain to them the importance of Quality of Service and an end-to-end SLA, and show them how much more profitable a sale can be when using some hosted models.

Are end consumers really clued up about cloud/ hosted? Or is it a case of a few people wanting the latest and greatest tech regardless of the benefit?

I think the SME market is really clued up – they are aware of the benefits, especially around data services.

Cloud is cheaper...fact or fiction?

Fact – if you partner with the correct supplier

For a business that has appropriate connectivity for hosted solutions is cloud always going to be the best option?

Therein lies the “Holy Grail” – appropriate connectivity. For data services, the faster the internet connection, the better the result. For voice, this is irrelevant. A VOIP connection has to have perfect throughput, zero packet loss, zero contention, and delivery as a fully managed service with an SLA. However, only 1Mb/s bandwidth is more than enough to deliver 30 simultaneous calls.

Try before you buy, how critical is this service to the uptake of cloud services? Do you offer it? If not, why not?

We do, yes, along with guaranteed QoS engineered into our portfolio, full end-to-end NOCC management to prove we meet our SLA, and a money-back guarantee.

In your opinion what is the critical element in the cloud/ solution? E.g. connectivity, data centre, hardware, software...other?

It is all critical – failure in any one area will spell unreliability – the death knell for hosted PABX. However of these, the least understood but perhaps most critical of all is the connectivity. Without QoS there is no chance of achieving reliability, no matter how good everything else is.

What steps do you think data centres need to take top make their offerings more channel friendly?

Perhaps if more of the large data centres offered the channel low-start build-up packages to take some of the initial risk out of developing new products and services, we would see more innovation across the board.

How can resellers determine which connectivity solutions is best for the customers?

This depends very much on geographic region for the service delivery, the type of service to be delivered; if they have infrastructure where this is located and what it is for – overall this is a complex area both technically and commercially and may be better solved by partnering with a CP who has already solved these problems and has an established track record for reliability and Quality of Service.

Will the 4G roll out have an impact on sales of fixed line connectivity?

I think that this is unlikely, due to the reliability requirement that cannot always be met by increased speed alone. Mobile networks by their nature are contended, so the user experience will always be varied depending on prevailing local conditions. I think that 4G is brilliant and will only enhance the user experience, but there is still growing demand for fixed line services which will only increase in years to come.

Steve North- Managing Director, Stripe 21
Comms Business
July 2014

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