January 1998

BY JEFF HOLTMEIER

How many times do we have to shout this message? When it comes to the distribution of computer telephony (CT) products and solutions, the telephony guys (interconnects) have the mature business model that is most capable of becoming the hybrid VAR (valueadded reseller). Besides, they have a “secret weapon” that traditional VARs can not defend against.

FUNDAMENTALS
To begin with, let’s define the channels. When we say VAR, we are referring more specifically to the Novell/Microsoft LAN reseller. When we say traditional interconnect, we are referring to the indirect (independent) channel that sells PBXs/Key Systems and voice mail products through distribution agreements with the manufacturers of those products.

Next, let’s define the mainstream applications and CT products that can be sold by these traditional channels, computer VAR or traditional interconnect. These would include formal and informal call center applications, and personal productivity solutions, such as unified messaging and desktop call control. You’ll notice that application generators, CT toolkits, build-your-own PBXs, and the latest version of CT Widget 1.0 are not mentioned here. Those products most likely have their own channels, made up of companies that are radically different from the mainstream VAR and the traditional interconnect.

TRADITIONAL INTERCONNECTS
If you are a traditional interconnect, and one of your key vendors presented you with new methods to differentiate your sales of PBX, Key Systems, and voice mail systems by enhancing the customer solution, would you jump through hoops to learn this newfound message? You already know that a PBX is a PBX, and back in the 1980s, you had to learn how to sell applications (ACD, voice mail, IVR, digital trunking, etc.) in order to pull through the PBX sale and survive. If CT applications can help you sell more of your core product, and protect your valuable customer base, you would no doubt do whatever it took to learn these methods. In fact, doesn’t this sound very much like what you had to do when voice mail was first introduced?

Speaking of voice mail, let’s look at some similarities. When introduced, voice mail was this high-priced application that ran on a computer attached to a PBX. Sound familiar? It required different methods of integration to the PBX in order to make the automated attendant and voice mail work properly. As an interconnect, you had to retrain salespeople to sell based on the (soft) application, and retrain technical staff on the nuances of this off-board solution that made the PBX more valuable. Granted, CT brings the local-area network (LAN) into the equation. So, you hire a network engineer, or LAN administrator (after all, this person is just like all of your other talented technical staff, just focused on a different product adhering to your business model). That takes care of the plumbing.

Then, you need to consider the integration of desktop CT applications into your customer’s existing environments. Either the multi-talented LAN administrator that you just hired can handle the issues or you hire an applicationcentric technical support person. Once again, this person is just like all of your other talented technical staff, just focused on a different product and service and adhering to your business model. That takes care of the desktop. Holy cow! You realize that this process is no different than identifying other new product opportunities and incorporating them into your existing business model. The notion of radically changing your business model to add mainstream CT products is simply not necessary.

Finally, your secret weapon — service and response. Don’t underestimate it, it’s a huge advantage. Most of you probably have a LAN, and have had experience with service and response of the local support organization. Ask yourself, if you cared for your PBX customers in the same way, would you still be in business today? I don’t think so. I don’t have to remind anyone what the expectation level is for service and response from voice customers.

WHY EVEN SELL CT PRODUCTS?
One apparent reason to sell CT products and solutions is because traditional PBX and voice mail applications are getting stale and somewhat commoditized. And, in today’s competitive PBX/Key System environment, you have to continue to force issues of differentiation to win sales. One great opportunity for positioning is with CT applications focused on the call center/ workgroup and personal productivity segments: In particluar, small informal call centers and workgroup productivity. These are areas that do not require customization skills that large formal call center solutions need.

Of the estimated four million call center seats, 55 percent have less than 40 agents . This small call center segment needs CT solutions. Also, look at the growth in the unified messaging and desktop call management market, which reaches potentially every desktop. Remember, even the best PBX telephone is still a proprietary, dumb terminal incapable of managing information. Enter the personal computer — the only device capable of delivering such solutions. Combining the PBX and PSTN with the power of the PC and LAN yields powerful, robust CT applications. Desktop CT applications can now intelligently manage incoming and outgoing calls. Supervisors and agents in small call centers are able to route, manage, and monitor calls far more efficiently than ever before. By the way, call centers are everywhere, and you’re probably selling solutions into those segments already, you just don’t know it. Sales departments, customer service departments, help desks, order desks, accounts receivable, and call coverage positions all fall into the call center category. Ask yourself if any of your customers doesn’t fall into one or all of these segments.

IT’S ALL IN THE PACKAGING
It’s almost too obvious. Why not market, sell, and support CT applications just like voice processing and ACD. Look at the parallels. Voice mail is nothing more than a server attached to the PBX running software. The user experience is the solution that the voice mail application delivers, and in some instances, a visual application installed on the user’s PC. Now simply remove the words voice mail from the above sentence, and replace them with CT application.

Therefore, one could argue that CT should be treated like nothing more than the next PBX feature — packaged, sold, installed, and supported just like voice mail. There’s no need to over-complicate things and create sales prevention. Because of the notion that computer literacy is required, some would argue that CT needs to be delivered from the data side of the equation. However, when a CT application is packaged and positioned as just another valueadded telephony solution, this argument goes away and the remaining fear, uncertainty, and doubt concerning the capability of the traditional telephony channel will be removed.

In 1996, more than 550,000 new PBXs, key systems, and voice mail systems were purchased in the United States, constituting just part of our multi-billion dollar industry. So, if telephony resellers can achieve this level of success selling non-stan-dardsbased technology, they could clearly find success selling CT applications.

WHO SHOULD BE SELLING THIS STUFF ANYWAY?
When PBX manufacturers saw the interest from Novell and Microsoft in the telephony space, there was instant euphoria based on the assumption that it meant an instant distribution channel of thousands of VARs who could sell and install CT applications. Some PBX manufacturers even saw the VARs as a new channel for selling their traditional telephony products. Everyone was intoxicated by this new Novell/Microsoft pie-in-thesky opportunity. Now we’re all suffering from the hangover.

The harsh reality is that the traditional (e.g., Novell) VAR is not capable of deploying CT applications. Of the estimated 12,000+ Novell resellers, there may be no more than 1-2 percent who are hybrid (telephony and networking) VARs with a chance to succeed with CT. Besides, Novell VARs are faced with an uphill battle selling their core product (IntraNetWare). Some are even jumping ship to Microsoft. Novell, as a company, seems less focused on telephony today than they ever (if ever) have been. Metaphorically, the current computer VAR channel is not unlike the interconnects of the early to mid-1980s. Most are data plumbers made up of very smart, technical people focused on data networking, but not on applications. Plus, their technical prowess generally begins and ends in Novell or NTserver, therefore they are not made up like a true integrator. Just like the early days of the interconnect, when smart technical people wired businesses for dial tone and public network access, these data plumbers wire businesses for data dial tone.

However, the interconnect industry is considerably older, and therefore more mature than the typical Novell VAR. And, although the traditional PBX distribution channel was not thought to be technically capable enough to deploy CT applications because they lacked computer expertise, the PBX has become a commodity, and the new breed of telecom resellers/integrators are capable of selling and installing value-added solutions. Witness their success at selling voice processing, ACDs, WANs, and other telephony applications. Some of them have even figured out that selling and installing LANs can be accomplished much like the sale of a PBX, by selling an application like e-mail, or unified messaging and pulling in the commodity (the LAN).

The VAR, on the other hand, is far from being able to sell traditional voice systems. In fact, many are having trouble even selling solutions in their own data networking core business area, let alone selling solutions in a business area that is radically different for them. Furthermore, technical competencies aside, their business model just isn’t designed to handle the customer in the manner in which voice end users demand.

Simply put, VARs must first learn how to sell applications, instead of plumbing. Once they accomplish that feat, they must then convince customers to buy voice products from a LAN provider, instead of their traditional telecom provider. That, too, will be an uphill battle, as serviceability is paramount in the PBX world and subject to very high levels of expectation by the users, based on precedents set by the telephone companies. LAN service, however, as we all know is hit or miss and not nearly as reliable as the telecom world. Since CT is such a natural extension of the voice solution, customers will look first to the provider of the PBX/Key and Voice Mail for these applications. Thus, CT needs to be sold and installed by the same company that provided the telephone system in the first place.

CONCLUSION
The telecom channel is very much alive and thriving. It may not be as sexy as being a disciple of Gates & Co., selling the latest and greatest computer stuff, but the fact remains, telephony products are solid, the market is huge, the distribution channel is mature and proven, and the resellers have quietly embraced new technology. These are the resellers who will take the lead and succeed with CT.

Ask yourself, would your core business have survived and would you have maintained your competitive edge (or even parity) in the marketplace had you not added other advanced applications (ACD, voice mail, WAN) to your portfolio in the past? We all know that the PC is becoming the focal point of communications, whether it’s voice, data, video, or interconnection to the public networks. The telecom industry has significant strength in its distribution model, and should use that advantage to take the leadership role in deploying CT applications. Simply put, the traditional interconnect should define their CT products, hire appropriate personnel, and overlay these elements into their successful existing business and service model.

Jeff Holtmeier is founder and president/ CEO of Q.SyS, Inc., a leading developer of phone-centric CT desktop applications, founded in 1992. All Q.SyS products support Novell’s TSAPI and Microsoft TAPI standards and are supported by all major PBX/Key system manufacturers worldwide.

Holtmeier is also founder and CEO of InfiNET, a regional Telecom Integrator with more than 100 employees that was founded in 1982. InfiNET represents major PBX and Key System telephony products and voice processing systems, and is a Microsoft Solutions Partner and Novell Platinum Reseller. For more information, contact the author at 513745-8940. E-mail to [email protected] is also welcome.