I enjoy the unique pleasure of sitting at the cross roads between the end user, the phone system manufacturer, the VAR, the open source community and the VoIP service provider. It is a position that allows me the ability to look down each of the different roads to see the sticking points and the pain that each of these groups continuously encounter. As the market has continued to grow and mature with each passing day, I am getting more and more inquiries from all in-roads about IP based phone systems. Most these inquiries come from frustrated VAR’s or phone system manufacturers who just can’t seem to get their offerings off the ground.
Most feel like they are constantly trying to hit a moving target. They are right. With the rapid growth of the industry, the low barriers to market entry and the downward pricing pressures due to immense competition it is tough for everyone involved to turn a profit (when they do sell something) and for the customer to be happy with the solution they receive.
But the outlook is not that bleak. Most of the problems that folks are facing all the way down phone system food change can be corrected - and this is were I come in. Over the next four days, I am going to release a series of posts that discuss the major road blocks and problems each “tier” of the phone system channel is facing and offer some insights and solutions that can be implemented in hopes of increasing sales, profits and customer loyalty.
So check back tomorrow for the first part of this series where we will take a look at the phone system manufacturers/vendors.
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4 responses so far ↓
Mentos // Oct 17, 2007 at 4:53 am
I think that for a lot of vendors, there comes a realization at some point that without a tremendous advertising budget, a direct sales model tends to plateau.
The real struggle for these vendors, irrespective of their actual value proposition, is in building a reseller channel.
If you take a look at any successful company in the PBX space, they all have strong reseller channels. Most of the IP PBX startups are coming to the realization that the world is not beating a path to their door.
You can either build out your channel, or hope to be acquired by a larger entity who already has a VAR channel to which your product or service is complementary.
Although I have not heard anyone in the press express a similar sentiment….looking at recent acquisitions such as Digium acquiring Switchvox….a good portion of the value of Switchvox, in my estimation, was the strength of their reseller channel. For a small company with modest resources, they were very successful in attracting, and keeping, resellers.
In the case of Allworx, it may have been Paetec who possessed a larger, more mature reseller channel, to which the Allwox product was complementary to their core telco and interconnect product offerings.
db // Oct 18, 2007 at 9:50 pm
Try reselling your Fonality PBXtra box! I cant even sell it for 50% off on ebay!
Garrett Smith // Oct 19, 2007 at 4:29 am
@ Mentos
You hit the nail right on the head. I could not have said it better myself. Build a reseller channel is not rocket science, but it is not easy either.
Most vendors just concentrate on the wrong things, like their awesome features and functionality, not on making something easy to use and sell.
Garrett Smith // Oct 19, 2007 at 4:32 am
@ db
Well, eBay is not exactly the place companies are going to buy phone systems, so i am not sure that is a real reason for or against Fonality.
Overall Fonality has enjoyed tremendous success and many of the changes they are making to their channel are going to make them one of the more attractive solutions on the market for VAR’s.
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