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Ready to Roll: NETXUSA Ensures Products are Quickly and Correctly Configured, Delivered Every Time

By: Paula Bernier (News - Alert)

Anybody can throw a product into a box and ship it to a customer. Quickly delivering customized VoIP devices that are ready for use to a wide variety of customers, which each have their own configuration requirements, is an entirely different matter. But NETXUSA (News - Alert) INC. has built a back office system that enables it to do just that in an automated and scalable manner, says President Rick Boone.

NETXUSA is a North American distributor of VoIP hardware from such companies as Aastra, AudioCodes, Cisco, Digium (News - Alert), Edgewater Networks, Grandstream, Mediatrix and Polycom. The privately held Greenville, S.C.- based company, which has warehouses both at headquarters and in Henderson, Nev., outfits service providers and value-added resellers with both products and related pre-configuration services and technical support.

That saves service providers and VARs from having to pay extra employees to manage inventory and configure VoIP devices. It also means these customers don’t have the capital expense of sparing; instead, they just order gear from NETXUSA on an as-needed basis.

The company’s customer base consists of approximately 3,700 dealers. In a given month, says Boone, NETXUSA typically ships product to between 800 and 900 VARs.

Distributing products and related support services to these customers has enabled NETXUSA to achieve strong, double-digit gains for several years and multiply the size of its warehouse facilities. Over the past five years, NETXUSA has grown from a $1.5 million to a $30 million company. In the same period, the company’s lowest year-over-year growth was 30 percent, says Boone, and that was last year when the recession hit.

While the tier 3 and 4 service provider space, which has been an early adopter of hosted PBX (News - Alert), has fueled the company’s business, Boone says NETXUSA is now starting to see opportunity with much larger customers.

“What we’re starting to see, because [the tier 3 and 4 providers have seen success offering businesses hosted PBX services] is the tier 1 and tier 2 providers, the Verizons and the more regional CLECs, are starting to adopt this and are starting to roll out hosted PBX platforms,” says Boone. “Those type providers are very sophisticated, and they require all of the things, and then some, we’ve already developed.”

Boone is referring here to the back office system that NETXUSA has built internally. It’s really quite a sophisticated set up. Here’s how it works.

NETXUSA provides its customers access to an online portal through which they can shop for equipment. It’s a pretty standardized, shopping-card type of scenario. Customers can, without picking up the phone or interfacing with a person, order what they need, and the order flows to one of the NETXUSA warehouses.

Here’s the cool part. There, a NETXUSA employee grabs the appropriate VoIP device off the shelf, scans it for the Mac address or serial number, and then plugs it into an Ethernet cable for automated configuration. Because NETXUSA already has a back office database containing each customer’s configuration preferences for all the devices that customer uses, and the configuration is done automatically as opposed to manually, there’s little margin for configuration error, says Boone.

“… you plug it into an Ethernet cable [for configuration], and then you go and have a cup of coffee and come back,” emphasizes Boone. “When I say it’s automated, it’s automated.”

This automation is exactly the capability that Boone says positions NETXUSA to expand its business to reach higher-end service providers.

“The excitement for us is we developed this extreme sophistication over the past four, five years,” he says. “Quite frankly, there’s only a handful of customers we deal with currently that are using it to the max. So we’ve kept the code ahead of the curve, and what we found is [that] these tier 1 and tier 2 providers are going to use it to the max and push us just a little bit farther.”

Boone estimates that NETXUSA’s back office system has about 90 percent of the functionality tier 1 and 2 providers need today. And he says the company is working to add the other 10 percent.

Of course, an important requirement of these large customers is the ability to scale operations. So NETXUSA is expanding its automation functionality to encompass things like the process for handling returns of malfunctioning phones, for example, says Boone. Because of the size of their customer bases, he says, the large service providers want to be able to log their customers’ phone problem information into their own systems, have NETXUSA pull that information into its own back office system, generate a new order for a replacement phone, and then ship that device to the provider or end user.

NETXUSA hasn’t publicly announced it tier 1 and 2 customers, but Boone says it’s in the process of helping four “good-sized” regional CLECs roll out hosted PBX services and is in talks with large incumbent telcos.

“I would make the assumption that at some point the tier 1s would fall in line and do the same,” says Boone.

The idea of a large telco outsourcing its inventory and configuration to an outfit like NETXUSA seems to fit into current trends, given many of the tier 1 telcos already have outsourced key parts of their operations to specialists in an effort to lower their operating costs and focus on core business objectives like new service creation, marketing and sales as opposed to less strategic areas such as equipment configuration and inventory. IT

How NETXUSA Got Its Start

By Paula Bernier

Like most companies, NETXUSA INC. had humble beginnings. The company, founded by Tom Boone, began life in 1984 as a secondary market distributor of PBXs from Avaya, Nortel (News - Alert) and others.

About six years later NETXUSA had distribution deals in place with three voicemail manufacturers – Active Voice, Callware and Telecall, whose technology it integrated with PBXs.

A few years following that, NETXUSA began enabling legacy PBXs for next-gen use by employing gateways from companies like AudioCodes (News - Alert). Of course, that was not a high-volume business considering business VoIP hadn’t yet taken off in a major way, notes NETXUSA President Rick Boone, son of founder Tom.

But the introduction of Asterisk (News - Alert) changed all that, notes Rick Boone.

“The big turnaround for us, and the VoIP market, came sometime in the 2000s, maybe 2002, with a company called Digium and their Asterisk solution, which was free,” he says. “We were selling the network cards and the boards that enabled that Asterisk PBX. That really gave VARs and end users alike the opportunity to take a look at VoIP for real, and it didn’t have a lot of investment because the Asterisk application was free.”

Asterisk PBX gave VoIP the attention it needed to help catapult it, and companies like NETXUSA, to the next level.

“From there we signed an agreement with Polycom (News - Alert), I’m thinking that was in 2004, and … that’s when our business started really taking off,” says Boone.

Through that relationship, he says, NETXUSA began working closely with service providers and the Polycom team to understand market needs, and then began working on its provisioning capabilities and back office systems, which are among its key differentiators today. IT

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