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    Daddis George Daddis George Presentation Transcript

    • A Winning VoIP Solution For SMB
      • The SMB Market
      • SMB Purchasing Patterns
      • The VoIP Opportunity
      • A Winning SMB VoIP Offering
    • Overview
      • VoIP & SMB: An opportunity to advance !
        • Magnified market presence
        • Increased customer responsiveness
        • “ Location Transparency”
        • Potential monthly savings on telecom
      • VoIP & the VAR: Growth opportunity!
        • Develop recurring revenue stream
        • Become vital to your customer’s operation
        • Differentiate your business
      • The Opportunity:
        • Provide a Total Solution
        • Bundled IT/Voice Service & Maintenance
    • ABOUT THE SMB MARKET
    • SMB Market Potential Source: US Census NAICS Data SMBs There are ~4.5M SMB with 2 to 100 employees* SMBs make up 97.6% of the business population! (but only 20% of the employee base!) * After eliminating 0 and 1 employee businesses
    • SMB – Local & LD Expense % of Total Telecom Expenditure 68.9% 74.0% 65.2% 62.5% 65.4% 74.7% 42.0% 54.7% 38.3% 37.7% 62.0% 58.6% 56.3% 67.0% 46.4% --- --- --- --- --- --- 57.9% # of SMB's (5-99 EE's) Market Value $ 153,781 $2,294,258,739 172,478 $1,204,213,800 84,005 $486,560,320 155,242 $842,181,640 115,262 $578,278,675 290,277 $1,100,625,884 60,456 $213,433,862 31,299 $102,820,971 201,388 $632,390,542 51,038 $158,258,630 208,596 $618,378,670 234,560 $661,374,758 455,446 $1,178,931,080 284,813 $726,444,038 3,250 $3,558,750 34,485 --- 22,336 --- 6,789 --- 5,275 --- 5,096 --- 1,402 --- 2,577,274 $10,801,710,360 KEY Market Segments
    • Target SMB Market
      • Define 3 Market Segments within 2-100 Employees:
        • “ Basic Communicators” 33% of SMB
          • Minimal and simplistic data & voice communication requirements
          • Drycleaners, gas stations, independent small retail, 0 & 1 employee businesses…
        • “ Power Communicators ” ~5% of SMB
          • Advanced data & voice requirements – high volume, fully converged, complex traffic patterns, highly reliable
          • Call centers, some financial services, some medical
        • “ Professional Communicators” 62% of SMB
          • Communications in voice & data are integrated and essential to business operation
          • Business-to-Business Services, Retail, Manufacturing, Local/Municipal Government, Health Care
    • SMB Market Segmentation
      • Approximately 2.7M “Professional Communicator” SMBs
        • 16% - 20% turn-over or 700K systems sold annually in this segment
      • VoIP Penetration: Estimates vary widely but opportunity is large!
        • Only 15% of all prof small businesses use VoIP services in any fashion within the entire SMB market
        • Only 6% of all new telephone systems sold today to SMB are pure VoIP Solutions
      • Cost burden of telecommunications services
      • is high to SMB :
        • 0 to 4 employees/firm - $82.81/emp/mo
        • 5 to 9 employees/firm - $50.18/emp/mo
        • 10 to 499 employees/firm - $20.99/emp/mo
      Source: - "The State Of SMB Network And Telecom Adoption: Business Technographics North America“ – June 2006 - 2005 Telecom Report: Hot Issues Facing the Industry – Harris Interactive VoIP Study – October 2005 - A Survey of Small Businesses Telecommunications Use & Spending – TeleNomic Research – March 2004
    • SMB VoIP Concerns
      • Perceptions of Drawbacks from traditional service
        • 911 Calling (32% selected it as a huge drawback)
        • Network Reliability (23%)
        • Voice Quality (23%)
        • Hassle factor of switching (14%)
      • Don’t see the advantages
        • Only 19% see Ease of Use as an advantage of VoIP
        • Quality of the Voice Connections (18%)
      • High Price!!
      Sources: 2005 Telecom Report: Hot Issues Facing the Industry – Harris Interactive VoIP Study – October 2005 2007 Frost & Sullivan “North American Enterprise Telephony Sys”
    • SMB & VoIP Adoption
      • In 2005, SMBs spent roughly $2.1 billion on telephone service, according to a Wall Street Journal Report
      • Familiarity with VoIP
        • On average 50% of businesses (all sizes) are “somewhat familiar with VoIP”
        • 26% are “very or extremely familiar”
        • 24% are “not very familiar or not at all familiar” with VoIP
      • High Satisfaction with VoIP
        • A Savatar survey reports 69% of SMBs with VoIP would “highly recommend” VoIP, while 22% would just “recommend” it
      • SMB IT spending is growing faster than enterprise spending
        • 48% of total US IT is for SMB ($320 billion) – Forrester
      • In the “Technology Adoption Curve”, SMB is ready to enter mainstream adoption!
      Sources: - 2005 Telecom Report: Hot Issues Facing the Industry – Harris Interactive VoIP Study – October 2005 - SMB VoIP Research Study – Savatar – September 2006 - 2007 Forrester Research
    • SMB BUYING TRENDS AND MOTIVATIONS
    • SMB Purchasing Triggers
      • What motivates an SMB to invest in a new telecommunications system?
        • The “Impending Event”
          • Business Establishment
          • Business Expansion
          • Business Move
        • Technology Obsolescence
          • It broke!
          • It costs to much to grow to the next step
        • Reduction of Monthly Recurring Costs (MRC)
          • > 25% seems to be the trigger!
        • Solving a key business application
          • Remote users, Improved Customer Response (Follow-me, Notification/Escalation…), data/voice integration etc.
    • SMB Selection Criteria
      • SMBs selection solutions based on:
        • Risk
          • “ Threshold Criteria”
          • Is the solution reliable? Will it consume large amounts of resources/time to maintain? Will deployment not disrupt my business?
        • Feature Set
          • “ Threshold Criteria”
          • Does the solution support my daily business operation (legacy features)?
          • Will the solution improve my ability to work with customers & employees (advanced features)?
        • Cost
          • “ Comparative Criteria”
          • Initial investment, TCO, MRC
          • Impact on cash flow
      • SMBs look for a complete solution that is supported !
        • One-stop shop – a single contact to manage the infrastructure – LAN, Network Appliances, Telephone, WAN voice & data
        • SMBs require a strong relationship with a trusted local resource!
    • SMB Purchasing Concerns
      • Risk: Reliability, Quality of Service, Resource commitment
      • Lack of knowledge of what VoIP solution is best for them
        • 70% of the SMBs which haven’t yet migrated to VoIP have almost no idea which service to use
        • Overall complexity of VoIP systems
      • Security Issues
      • Customer Service / On-site Repair
        • Due to lack of IT resources
        • Is there a dedicated responsive support resource?
      • Conclusion: A strong need & opportunity for the local reseller!
        • Equipment Sales & Ongoing Maintenance of the LAN/WAN environment
      Source: SMB VoIP Research Study – Savatar – September 2006
    • SMBs Differ from Big Enterprise
      • SMBs are more sensitive to cost, especially installation costs
      • Risk and redundancy requirements are different
        • Reliability of TDM Key-systems
        • Don’t expect to pay premium
      • Usually lack IT knowledge and/or resources
      • They typically have shorter sell cycles (1 week to 6 months) than their enterprise counterparts
      • SMBs telephone system feature sets are different!
        • One-touch access / Key system features
        • “ Technologically Conservative”
        • True “value-add” improvements integrate existing technologies:
          • PC/ MS Office & Outlook, Cell Phone, Telephone System
    • Common Pitfalls in Addressing SMBs
      • Price points out of line with SMB expectations
        • Installed VoIP costs range from $600 - $1,500 / employee
        • Out of line with today’s TDM $300 - $500 / employee
      • Inappropriate feature set
        • Most VoIP IP-PBXs provide only PBX behavior with their VoIP feature set
        • Legacy key-system behavior is dropped!
      • Requirement to move abruptly to VoIP service – poor transition plan!
        • Requires change in carrier/service & LNP hassles
        • Expensive or impossible to mix TDM & VoIP services
      • A “High Technology” message to a conservative market
        • Buzzwords
        • Technology integration & features well beyond current state
      • These issues keep most VoIP SMB solutions in the “early adopter” market segment
    • OPPORTUNITIES IN VOIP FOR THE SMB MARKET
    • Opportunity for The Reseller
      • A source of new sales opportunities
        • VoIP provides a strong incentive to turn-over an installed base of aging key systems
        • VoIP MRC savings, flexibility, and features drive adoption
      • A differentiated offering in competitive bids
        • Most SMB proposals are TDM Key systems today!
        • VoIP strongly advantaged in application-based sales over TDM
      • VoIP can expand your business into new areas
        • Telecom VARs grow into networking/data domains
        • Networking VARs grow into voice domains
      • An opportunity for more profitable installs and ongoing service revenue
        • Growth of complexity in the SMB LAN is outpacing the ability of the SMB to manage it
    • Opportunity for the SMB
      • Core Value Proposition:
      • A managed VoIP offering will provide…
      • * the key system features they use today
      • * the best of SMB VoIP features
      • * slow/risk-free transition to VoIP w/ PSTN backup
      • * a worry-free support package
      • * opportunity to use VoIP trunks to reduce cost
      • … all without paying a premium relative to TDM Key Systems
    • Opportunity for the SMB
      • Key VoIP Features and Benefits:
        • Monthly telecom & data service cost reduction
        • Multi-site integration
        • Location Transparency ( Remote Users / “Road Warrior” )
        • Presence Management / Advanced call routing
        • Advanced messaging / notification
        • Cell Phone Integration
        • Computer Integration
      • Summary: Beyond VoIP cost savings, VoIP truly has an opportunity to improve an SMB’s operation!
        • “ Application Sale” vs. “Price War”
    • Example: Multi-site/Remote User
    • Example: Call Routing/Notification
      • A SMB supplies “kitchen equipment” to local restaurants and provides an SLA-based contract for their maintenance
      • Business problems:
        • How to quickly move customer calls to technicians deployed in “the field”
        • How to escalate problems seamlessly if primary technicians are unavailable
        • How to document response time for SLA
      • VoIP Solution:
        • VoIP Features: Cell phone integration, Call routing, Presence Management, Call Detail Reporting, and Advanced Messaging / Notification
        • Calls routed seamlessly to technicians with “available” status at their cell & office phones. If no answer, re-routed automatically to “secondary responders”. Off-hours svc requests go to voicemail which notifies via pager/email/SMS-Text the first and second level responders. Call reporting documents response times.
      • Provide SMBs with a multi-year agreement to:
        • Maintain the business LAN & WAN network environments
        • Extended equipment warranties
        • Data and equipment backup
        • Administration and MAC support
      • Bundle with network services & equipment lease
      • Simplify SMB IT infrastructure management
        • Single point of contact for telephony & networking
      • Lower overall cost to the SMB
        • Bundled voice/data services, single vendor, VoIP savings…
      Example: Managed Services
    • Growing a Reseller into an MSP:
      • A managed service provider (MSP) is a company that manages IT services (LAN/WAN/voice/data) for other companies remote and/or onsite.
        • VoIP Technology provides new features & benefits to drive upgrades within the SMB Market
        • The rapid growth of remote technology allows for MSPs to control network operations completely off-site.
        • The Managed Service model provides a total, single source solution lowering risk & providing security and simplicity to SMBs
      Source: Wikipedia Managed Services
    • The Major Elements
      • The Reseller
        • Data & Telecomm Savvy
        • Sales & Service Oriented
      • IP-PBX/Key System & NW Server
        • $400 - $600 / seat installed
        • Key system + VoIP functionality
        • VoIP / Network Server “Appliance”
        • PSTN & VoIP WAN interfaces
      • Managed Service Offering
        • The Total Solution
    • To offer a true managed services product, a reseller should:
      • Offer network and voice hardware (VoIP)
        • Allows you to offer full service to client/customer
        • One point of contact
      • Support remote monitoring & diagnostic capabilities
        • Delay/Network latency & jitter
        • Mean Opinion Score (MOS)
        • Bandwidth usage / Packet loss
        • Security
      • Establish agent relationships with:
          • Phone/Network hardware vendor
          • ITSP
          • Regional ILEC/CLEC
          • Leasing Agency
      • Build 24/7 Customer/Technical Support
      The Major Elements
    • The SMB Customer Offering
      • A Complete Data & Voice Package
        • Service delivered via T1 & backing POTs
          • ISP / data bandwidth
          • VoIP & backing TDM trunks
          • Direct Inward Dialing, Redundancy, LNP…
        • Complete Allworx System & Telephones
          • Industry best SMB feature set & price point!
          • 5 Year Extended Warranty
        • Managed Network Services
          • 24x7x365 voice trunk SLA with monitoring & utilization reporting
          • Allworx remote configuration management (MACs) & monitoring
          • Data backup
          • Disaster recovery: Immediate off-site system backup
          • LAN event monitoring & troubleshooting
        • Complete Installation & Training Package
          • Network assessment
          • Service provider coordination
          • End user training, etc
    • Example VoIP Solution
      • The Fastest Growing SMB VoIP Solution!
        • $400 - $600 / seat installed
        • Complete TDM PBX/Key-system feature set + Best of SMB VoIP
        • PSTN & VoIP Trunk support for easy transition to VoIP
    • A Real World Example
      • “ Acme Services”: 55 emp. New England Business
      • 3 Sites + remote small offices/users
      • Customer Priorities:
        • Key-system features
        • Integrated, free calling between sites
        • Highly reliable: backup, redundant service, simplified
        • Advanced communication features:
          • Conference Bridge, Call Queuing, Integrated Voice/Email, virtual employees, cell phone integration, call follow-me/notification, multiple AA…
        • Unified incoming call mgt across sites
        • MRC Reduction
      • Single point IT resource
    • Initial Needs Analysis
      • Analysis of “Acme’s” current monthly telecom expense showed opportunity for dramatic reduction
        • Inefficient use of POTs trunks
        • Expensive calling between sites
        • Separate data trunk and expense
        • Data via DSL with reliability & bandwidth issues
      • Current feature set poor with minimal integration
        • Simple key systems at each site
        • Sites not integrated
        • Inability to route phone calls
        • Inability to support remote users
        • Inflexible configuration/environment
    • Acme’s Current Cost Structure Current Scenario Monthly Yearly 3 Years Data - DSL for Business Class (4 DSL Lines) $400 $4,800 $14,400 Local & Long Distance Charges with usage (16 CO Lines) $1,500 $18,000 $54,000 Service Contract: Data   $100 $1,200 $3,600 Service Contract: Telephony   $100 $1,200 $3,600 TOTAL $2,100 $25,200 $75,600
    • Acme’s Proposal
      • Customers signs a 3 year service contract with reseller for $1,410/month
      • Lease payment on equipment:
        • $475/mo
        • 5 yr lease, 7.5% annual rate with 20% residual value
      • Customer Receives:
        • Flat Rate fee for voice and data network services
        • Reduction of $690 per month in telecom expense
        • New VoIP phone system and all the key features
        • Higher speed access to Internet (Move from DSL to T1)
        • Significantly improved reliability & redundancy
        • Single point of contact for all IT administration
        • Very flexible, reliable and customer/employee friendly communications
    • Acme’s Proposed Cost Structure Managed Services Scenario Monthly Yearly 3 Years Monthly Managed Services Fee       Telephony & Data Services Flat Rate Fee $1,110 $13,320 $39,960 Includes:       1. ITSP Services / 12 SIP trunks / Flat rate LD + 55 DID numbers ($25-$30mo each)     2. 2xHigh speed Internet Access (up to T1 @ $350/mo each) + DSL ($60/mo)       3. CO Lines - basic coverage for fall over ($50/mo w/o usage)               Service Agreement - Data & Voice $300 $3,600 $10,800         TOTAL $1,410 $16,920 $50,760 Savings - % 33% 33% 33% Savings - $'s $690 $8,280 $24,840         One Time Charges:     1st Year 3 VoIP Ready New Phone Systems (e.g. Allworx)     $5,400 55 12-button PBX/Key VoIP Phones     $12,595 Software/Hardware Options     $3,000 Other Hardware & Installation and Set-up     $6,230 Total One Time Charge for Equipment     $27,225
    • Conclusion
      • Managed VoIP Solutions can benefit all businesses
        • Savings, Streamlined Communications, Location Transparency…
      • However, SMBs have unique needs and limited resources compared to big business
      • The Keys to the SMB- VoIP Market are:
        • Understand the SMB business process
        • Create a tailored application solution fitting the SMB
        • Solve the whole problem: Equipment, Network, Maintenance
        • Utilize VoIP for its advanced features & lower costs