Talking with Rick Boone, President, NETXUSA

By: Richard “Zippy” Grigonis

It was Rick Boone’s father, Tom Boone, who founded NETXUSA (News - Alert) (www.netxusa.com) back in the early 1980s. He’s still the majority shareholder and CEO of this family-owned business, which has a distribution channel of more than 5,000 Independent resellers throughout the U.S. and foreign countries that provide local end-user installation and support services. Rick Boone’s background is as a corporate banker. Since coming to NETXUSA 11 years ago, he’s served as Controller, CFO and now President. Today he works closely with manufacturing partners to continue developing relationships, takes an active role in large customer account management and works with sales staff on both U.S. coasts.

With its two distribution and sales centers situated in the U.S., NETXUSA’s East and West coast facilities provide rapid regional response and economical product delivery to the dealer channel. NETXUSA provides cost-effective provisioning VoIP branding services for a wide array of hardware direct from leading VoIP manufacturers. NETXUSA backs all of its products with advanced replacement warranties and support services. The company’s in-house certified engineers and experienced customer service staff are adept at a servicing dealer following a sale.

Our own Richard “Zippy” Grigonis recently caught up with Rick Boone and discussed NETXUSA’s involvement with IP communications.

RG: Are most companies IP-enabling their existing phone systems, or do you see more “forklift upgrades” to totally new systems?

RB: We are seeing more of our VARs selling the forklift upgrades. Most small business customers seem to have had their existing communications systems since the late 1980s to early 1990s or before. They replaced hardware as needed, but over the last 25 years not much changed in telephone technology and until about 2005 there were not very many compelling reasons to consider changing communications systems, but around 2005 VoIP started becoming accepted and its quality was equal to the companies’ existing T-1/PRI scenario. At the same time, other forms of media were going through similar conversion. TV was leaving analog and going digital. Cable companies and the like started adding voice services to their product offering and residential users started tasting VoIP from home to save on long distance charges. HD video and digital audio have become expected in our daily lives, so introducing new products like HD voice over your phone is a natural transition for office communications. When you consider the cost savings and additional features that VoIP provides, such as integration into the customers network, unified communications and true business applications being pushed to the users desktop, the small business now has some real, compelling reasons to consider making a change in their communications. Once people do the research and trust that VoIP is solid, they can increase productivity while cutting cost. As it continues to be a growing part of the convergence of our overall communications, it becomes a bit easier to for the VAR to sell a solution, regardless of whether the new IP PBX (News - Alert) is hosted or premised-based.

RG: NETXUSA has in-house engineers and customer service staff to service the dealer after the sale. Do IP-based systems demand more “hand-holding” than traditional circuit-switched systems?

RB: They most certainly do. Traditional analog systems are straight forward in nature. It’s hardware. It has been traditionally proprietary without many unknown variables or configurations. The challenge with IP-based systems is that now we are dealing inside the customer network and all networks are not created equal. We do a lot of pre- and post-sale work with our VARs to make sure the network is suitable for the application they are about to install over it. If the infrastructure is not correct on the front end, the end user will not have a good experience. Most of time when a user trashes an IP-based system it is not the hardware or the service provider that is to blame, but the infrastructure within their own LAN. Therefore, proper education is the biggest challenge we face with IP-based systems. Still, NETXUSA is doing a good job educating and properly supporting our dealer base to make sure every IP-based install goes well from the beginning.

RG: Have you seen any favorite products and services that really resonate with the public?

RB: Wireless. We are seeing a significant up-tick in wireless opportunities and wireless sales. The cost of quality wireless routing devices is so low now that it is cost-effective to add wireless devices in just about every office. Most small businesses have at least one or two people that are mobile throughout their business. The challenge is training the VAR community to dig into their base and realize those wireless opportunities that are not new and to provide add-on sales. In today’s economy, finding resourceful ways to increase customer productivity is paramount and wireless devices can do that. In the past, the problem has been that the cost of the wireless infrastructure has been too expensive to get quality communications, but we have wireless infrastructure products that fit the budget of every business without sacrificing the quality of service you demand in your communications.

RG: NETXUSA offers complete hosted provisioning and branding services for various products. Is this a growing trend or do only companies of a certain size adopt this strategy?

RB: Provisioning and branding services opportunities are not size-dependent. These type of professional services are good for everyone. Provisioning services help providers and resellers scale their business without having to concern themselves with inventory-related issues that cost both time and capital investment. Provisioning services also prove useful as a remote installation tool and in many cases will allow the hosted PBX provider to sale a solution and provide products and services without requiring a truck roll which can save both time and money in some applications. Provisioning services allow the provider and customer to know there will be no DOAs because you have to power up each device to get the files loaded and NETXUSA can spot check phones with the providers’ service to make sure we get dial tone before the devices leave the warehouse. Branding is just a good idea. The more anyone can create brand awareness the better. Our branding service also gives the VAR or provider the option to have startup guides, product slicks or marketing and promo items stuffed into each box before shipping.

RG: How big is your open source business? Is the current economic downturn encouraging more people to use open source products?

RB: Open source counts for about 35 percent of our business. I have not really seen open source sales increase due to current economic circumstances. What I have seen is the awareness and use of systems based on open source increase dramatically. The best indicator for me is a record number of downloads of Asterisk (News - Alert) open source in 2008. Asterisk is the worlds leading open source application out there right now and in my opinion is a very big part of why VoIP in general as taken off. End users today do not appear to be buying Cisco, Avaya (News - Alert), Nortel, etc., just because they are those “name” brands. They are taking a look at open-source based PBXs and other PBXs that can give them all of the same features and functionality at a fraction of the cost, so the current economic environment is a great time to introduce alternatives and we continue to see significant business growth because people are looking at alternatives that in good economic times they might not otherwise.

RG: How do you see the future of the IP communications channel? Will new applications yield greater margins for distributors and resellers?

RB: I see the channel getting stronger over time. Our manufacturing partners are committed to the channel and its’ development and VoIP is still in its’ infancy stage so we have only seen a very small glimpse of what is capable over a VoIP network. Right now we are still in the adoption stages and VoIP is rapidly becoming the norm in lieu of being a new technology. New applications and convergence will drive the future of the VoIP market and as we see these new applications being pushed to the desktop and beyond there will be additional margins and up sale opportunities for everyone involved.

RG Sounds like you’ll be busy.

RB: NETXUSA has experienced tremendous growth over the last 5 years and I am very hands on in the day-to-day operations and development of the organization. My other duties involve working with Eric Todd, our CTO, in developing the internal systems that help make NETXUSA a recognized leader in value added distribution. But I cannot take all the credit for what has gone on here. The tremendous company growth NETXUSA has experienced in the past and continues to experience today is a blessing and a testament to having a good working environment and great people pulling together for a common goal. We’re a family-owned business with a family-friendly working environment. You could very easily have conducted an interview similar to this one with 30 other capable people in this organization. IT

Richard Grigonis (News - Alert) is Executive Editor of TMC’s IP Communications Group.

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