July 2009 | Volume 12 / Number 7
Talking with Dan Ferguson, VP & CFO, AdvanTel Networks
By: Richard “Zippy” Grigonis
Since its founding by telecom veteran Roger McGibbon in 1984, AdvanTel Networks (www.advantel.com) has installed and integrated thousands of telecom solutions into corporate environments. Headquartered in San Jose, California, they specialize in converged voice and data network deployments from small business telephone systems to international VoIP installations. Their range spans everything from small office solutions incorporating remote users using VoIP to networking a global enterprise to support a follow-the-sun call center. They stress customer service and are said to have a customer satisfaction rating of over 95 percent.
With customers ranging from Fortune 100 companies to up-and-coming tech start-ups, its impressive that AdvanTel’s technicians can handle solutions involving security, LAN/ WAN design and installation; VoIP and traditional voice solutions; Wireless LAN and WAN, as well as consultation and project management.
Recently Yours Truly caught up with AdvanTel’s Vice President and Chief Financial Officer Dan Ferguson, who has 20 years’ experience in the telecom industry. Ferguson supervises sales and personally takes part in client relationships with major AdvanTel accounts, receiving feedback from customers and passing it along to the manufacturers AdvanTel represents.
RG: Is AdvanTel a straight reseller, VAR or integrator?
DF: Basically we consider ourselves to be a VAR, a Value-Added Reseller. In some instances we also function as an integrator. We’ve been an Avaya business partner since 1992 – we deal in the unified communications systems, for example – and we’ve been a Juniper dealer for 2 years now. The Juniper Networks (News - Alert) product portfolio allows AdvanTel to sell deeper into our traditional voice accounts. We now have a compelling data infrastructure story to tell our customers with Juniper’s lower TCO and best of class technology. When you combine that with Avaya (News - Alert)’s superior voice platforms and applications, our customers are now viewing us as a trusted advisor for both their voice and data networks.
We recently ramped up our data business for strategic reasons. When we go out to meet with customers, our main contact is typically an IT director or manager. They’ve inherited the voice communications infrastructure. When we talk to them in our telephony language and acronyms, it somehow sounds foreign to them. But if we lead the conversation by talking about data and what we can do on Juniper front, that makes the discussion that much smoother, and we find the voice applications to be more of a pull-through.
Our customers these days often bring us in to integrate disparate platforms. We’ll put together Microsoft (News - Alert) OCS and an Avaya system, integrating the UC applications with the existing data infrastructure. We also sometimes find ourselves integrating voice with video. We not just a voice VAR or a data VAR. It’s almost as if we’re becoming a ‘convergence VAR’ – at least that’s what Juniper believes us to be. They think they’ve discovered us, a new type of company, the convergence VAR. The UC part doesn’t really figure into what they’re playing in.
We’re based in Silicon Valley and have some large clients. In fact, many of our customers are multinational corporations, based right here in the area. We have some of the largest high-tech companies as our customers. They’re typically on the leading edge and they’re interested in productivity tools, or enhancements for their employees.
RG: What kind of geographical area do you cover?
DF: We can go wherever our customers call us. We have customers based here in Silicon Valley that have a global presence, which compels us to do business globally.
RG: With IP products, is there more customer ‘handholding’ or training involved than the older TDM systems?
DF: If we’re taking a legacy system and IP-enabling it, typically the owner of the legacy telephony system is the IT manager. They’re essentially inheriting it, as I said previously. So it’s outside their ‘comfort zone’ so they’re using us as the ‘trusted advisor’ for voice. Being that we have data expertise as well, they feel comfortable working with us and sharing their data infrastructure with us. So there are some special skills and knowledge that you need in order to deploy VoIP on an existing data infrastructure. There are certain commands you need to know for Cisco (News - Alert), Juniper, HP or whatever data infrastructure we end up running into.
RG: Do you deal with any open source telephony products?
DF: Yes, in particular we deal with the Asterisk (News - Alert) platform Even enterprise customers have experimented with open source IP PBXs. Many of our customers realize that if they go with an open source system, there’s no software cost but they also find that what’s required to support an open source system over about a 5-year period evens things out. The breakeven point is about 5 years, because you must provide more support for an open source system than you do with, say, an Avaya system or other brand-name system. Open source is generally not a turn-the-key-and-walk away kind of technology. Its support infrastructure isn’t up to snuff right now, in my opinion. There are some companies that have taken Asterisk and have re-packaged it with perhaps some new code and have bundled it with their own hardware, and typically they provide a service contract with it. Indeed, you generally need to buy such support contracts involving maintenance. There might even be a Moves, Adds and Changes contract in what would be more of a managed services offer.
I’ve seen a number of large corporations do an open source deployment here and there and they dabble with it, but many are not yet willing to gamble their entire enterprise on it. They’ll install it in a building to try it out and see how it works. But if you don’t have a bundle, you have to buy the hardware, some of which costs the same as it would in a non-open source system.
RG: So you can deal with any-sized company?
DF: We can do SMBs and enterprises. In fact, much of our business is in the enterprise sector.
RG: Some of this equipment is becoming more and more commoditized, such as peer-to-peer devices that you’ll one day be able to buy at an electronics chain store. Though I imagine larger systems will never become that simple.
DF: Yes, that’s because of the feature set required on the enterprise side. It’s a more complex installation. And when it comes to contact centers, things can become very sophisticated too. That’s where Avaya has market dominance and that’s how they keep themselves in accounts. They have very strong contact center applications. They often square off against competitors such as Cisco at expos. Ten years ago, it used to be Nortel (News - Alert) and Lucent.
RG: Aside from the size and feature set of some systems, there’s the matter of customization, which can go hand-in-hand with integration and general ‘hand-holding’.
DF: Yes. There are very few companies out there with the necessary voice-related expertise, along with data and application expertise. That’s really the differentiator today. We’ve seen a number of data VARs attempt to move into the voice arena in the past few years and they haven’t done a great job of it. It seems like the voice VARs have an easier time going into the data world than when data VARs enter the voice world. As for the interconnect model – it’s dead. Any company out there that has tried since 2003 or so to continue with the interconnect business model is struggling today. When customers need to buy a voice system they typically will either reach out to their carrier – such as AT&T or Verizon (News - Alert) – or they’ll contact their existing data VAR. And today, the data VAR which only a few years ago couldn’t do it, can now provide a voice solution. So we’re receiving a fraction of the demand calls we used to get. Customers no longer pick up their phone and calling us to buy conventional telephone systems. That just doesn’t happen anymore. Whoever can ‘take over’ and control customer’s server room will win. That’s one thing on which we pride ourselves. We can go in and service anything in a customer’s server room for an SMB customer. At the enterprise level, that’s not always the case because they typically have huge data center running mission-critical applications, such as Oracle (News - Alert) or SAP. We don’t deal with those really high-end applications.
RG: Is unified communications still growing in the current economic environment?
DF: It is. We find that many customers want integration to their existing Microsoft infrastructure. Many customers are spending money with Microsoft to get their OCS technology, but when they got to integrate it with what they have, they don’t know how to do it. That’s where we come in, to bridge that gap.
RG: I guess certain IP applications tend to attract more business than others.
DF: Oh yes. I should also mention that we’re dealing more and more with SIP (Session Initiation Protocol (News - Alert)) trunking. SIP trunking is attractive because it avoids PSTN charges. That appears to be a ‘killer app’ right now. IT
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