VARs See UC as Unconquered TerritoryBy Jessica Davis | Posted 2007-04-19 Email Print
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News: Vendors are making Unified Communications a reality for SMBs. Is it time VARs pressed end-users to toss their tried and true phone systems.The small business market for unified communications telephone systems is buzzing, at least if you take the cue from major vendors such as Cisco, 3Com and Nortel.
All three companies announced new systems or enhancements to existing systems for SMBs (small and midsize businesses) in the last month, giving VARs an entry into a space that was previously underserved and giving small businesses a new alternative when they look to replace or upgrade their phone systems.
"The SMB is an exciting part of the business right now because they are jumping in faster than the enterprise customers," said Mitchell Hershkowitz, area practice manager for converged communications for Dimension Data, a $3.1 billion system integrator based in Johannesburg, South Africa. Hershkowitz defines small businesses as those with 10 to a few hundred users.
"One of the big questions that customers have is, 'Can I get unified communications without replacing my current phone system?' and the answer is yes when they look at products like ours," he said. "We are PBX-independent."
Customers can use the AVST CallXpress system with a PBX, and they can still use it if they decide to eventually upgrade to a VOIP (voice over IP) system.
"One of the ways companies have promoted VOIP is by talking about apps you can get with IP PBXes," Minifie said. "That's created a misconception that is the only way to get these apps."
VARs sell the AVST system either alone or as part of a solution that replaces a complete telephony and voice mail system. And VARs are selling more these days. Minifie said one of the drivers is that a lot of the original voice mail systems are reaching the end of their life span, no longer supported by their vendors.
Other small businesses are looking to scale their carrier-hosted systems but are running into obstacles.
For example, Dimension Data is currently working with a customer with just 15 users that has been paying a carrier $50 per user per month to host a unified communications phone platform. That solution didn't let the customer add the applications it wanted, and it didn't let the customer add users as quickly as it wanted to.
So it turned to Dimension Data and asked if the company offered hosting services. It didn't. Instead, the systems integrator has proposed a leased router-based solution based on Cisco's Call Manager Express that would require an initial investment of $150 per user and could scale to meet the company's productivity needs.
By offering the company a leased solution, Dimension Data was able to bring the investment down to a level comfortable to the customer and significantly lower than the price for the outright purchase.
"SMBs are coming out of infancy in terms of adopting these kinds of solutions," said Shrikant Latkar, senior manager of enterprise marketing at Juniper Networks, a provider of the networking and backbones of which systems such as unified communications and VOIP sit on top.
As broadband connectivity has become mainstream and pricing has become more friendly to smaller businesses, these kinds of solutions have become more appealing to SMBs.
Recognizing the market opportunity, several companies have announced new offerings for the market or added more muscle to their existing offerings.
For example, 3Com and IBM in March announced a collaboration to integrate IP telephony with e-mail, messaging and core business process on IBM's System i server platform. The System i Integrated Collaboration package adds unified messaging, contact center capabilities, integration with Lotus Sametime 7.5 and a 3Com software development kit on top of 3Com's VCX IP telephony software running on the IBM hardware. A spokesperson said that per-user pricing starts at about $500.
At its Cisco Partner Summit in early April, the networking company announced a new integrated IP telephony and networking offering with price points designed to appeal to businesses with 5 to 50 users. The Smart Business Communications System, the successor to the Call Manager Express, was welcomed by partners who cater to small companies and said the package could allow them to offer customers pricing of under $500 a user.
And Nortel on April 16 announced further enhancements to its year-old offering for small businesses. The company is planning five bundles based on existing hardware with software upgrades to provide more unified communications capabilities later this year. Prices start at $453 per user.
All this is great news for VARs who cater to small businesses, and communications/telephony VARs who would like to get into that space. There is plenty of room for VARs to be the trust advisor with customers in terms of upgrading telephony systems.
"There's an education that needs to happen there," Hershkowitz said. "Enterprise customers have been educated about phone systems, but SMBs may have been doing something one way for the past several years and now they don't know what other options are available. They don't know that managed solutions can offer more than just voice. They can offer unified communications and video conferencing, for example."
But a top-of-the-line system isn't for everyone, warns Hershkowitz. There could be a large investment in upgrading infrastructure if the pipes aren't there to support video conferencing applications, for example.
"SMBs still need to look at their businesses and still need to look at what makes sense for them from business perspective," Hershkowitz said. "Once they move away from, 'just get me a new phone,' you will see a lot more SMBs jump into the unified communications area."