As voice over IP technology goes mainstream, replacing analog voice communications, the CEO of Bandwidth.com sees a role for VARs and integrators in getting the technology into small and midsize accounts.
That is why Bandwidth.com, a 7-year-old provider of VOIP services based in Cary, N.C., is planning to step up its channel recruiting efforts for the remainder of the year, said CEO Henry Kaestner.
Kaestner figures if Bandwidth.com is to become the provider of choice in the SMB (small and midsize business) space, its best chance at success is through partnerships with VARs and integrators.
“They’ve got the relationships with the customers,” he said. “In many cases they’ve had them for several, if not many, many years.”
Bandwidth.com, which already works with some channel companies as well as large retailers CDW and CompUSA, is putting together a channel program that Kaestner said the company plans to launch before the end of the year.
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While not all details have been worked out, Kaestner said some components of the program already are in place. The company has a channel-neutral pricing policy that calls for its sales staff to get paid the same regardless of whether they are working on a direct account or with a channel partner, he said.
VARs and integrators that partner with Bandwidth.com can expect profit margins of 15 percent to 25 percent for reselling the company’s VOIP services, he said.
Since the service generates recurring monthly revenue, as opposed to one-time product sales, Kaestner expressed confidence that more and more channel companies will be interested in working with the vendor.
To be sure, an increasing number of VARs and integrators in the past year or so have been trying to figure out how to get into VOIP, a technology that once was considered little more than pie in the sky.
Quality problems and concerns over security have until recently served as deterrents to adoption of the technology, but the tide seems to be turning.
Proponents believe the affordability and features of VOIP, when compared with traditional voice systems, will win over more and more customers as awareness grows. This will be the case especially among budget-conscious SMBs.
Infonetics Research, of Campbell, Calif., predicts that VOIP adoption among small businesses will triple by 2010 in North America. According to a recent Infonetics survey, 14 percent of small companies are already using VOIP technology, and that compares with 36 percent of large companies surveyed and 23 percent of midsize businesses.
“As far as I’m concerned, there’s no reason why businesses should not go with VOIP technology,” said Paul George, owner of NTWebs, a managed services provider in Boca Raton, Fla.
The company started delivering VOIP services two years ago in response to multiple requests from customers, said George.
NTWebs’ experience is anything but unusual. Customers, especially smaller companies, typically want to deal with only one provider of technology, including data and voice. It’s the “single neck to choke” approach, as it has become known in the channel.
“Customers don’t want anybody pointing fingers at one another,” said Kaestner.
NTWebs picked Bandwidth.com as its VOIP vendor, said George, because the vendor demonstrated it understands the needs of partners, who need support and training to get up to speed on delivering the technology.
When Bandwidth.com launches a formal channel program, George said, one of the main attractions for partners will be the flexibility the vendor has built into its offerings. Partners can choose to simply resell the service and let Bandwidth.com handle the integration, or they can opt to do it all themselves, he said.
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Kaestner attributes much of Bandwidth.com’s success to its attention to the small and midsize market, which he said does not get the same level of care from the large telephone companies.
“We’ve stayed very focused on the needs of the SMBs,” he said.
Bandwidth.com provides VOIP technology to more than 2,500 customers nationwide, some of it through its alliances with CompUSA and CDW. The CompUSA partnership, formalized in March, also involves Sylantro Systems, whose Synergy VOIP platform is targeted at SMBs ready to adopt the technology.
CompUSA taps engineers through New York-based OnForce’s IT services matchmaking service. OnForce, formerly ComputerRepair.com, matches IT engineers with channel companies that need temporary help for installation, integration and other services.
“VOIP is a great way for [channel companies] to sell more of their core business,” said Kaestner. By adding the service to their offerings, he added, VARs and integrators “are going to become much more relevant to their customers.”