Part 3 of Our 3 Part Series “An Interview With Ken MacDonald”
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Think about it this way. The Coles Note’s version is, Xentrax lives in the Enterprise space. They sell two product groups. They actually sell three, but two product families, call recording, workforce management. The critical difference in what they sell is, they’re enterprise-grade products. Fortune 100 companies. They don’t have any small players, because the products are so complex and expensive, that only enterprise-level companies can afford and have the need for that level of complexity. Drop down a notch, you’re in SmartIP, more of a suite of products, several more options, greater reach, greater depth, really known for service, because of the fact that it’s grown up in the space of dial tone and reliability. It doesn’t matter. Put it this way. You can operate a company without call recording. You can’t operate a company without a system, so the pressure is on 7/24 operation, trucks rolling every day, a different model. The space of the customers is as we describe is, the upper end of SMB. Get to Meteor Telecommunications, definitely the upper end of SMB, and considered Enterprise on the hospitality front. But the majority of their clients are smaller organizations. A lot of 20 to 30 to 40 user-type systems, focused on one product family, that doesn’t have the full product suite of an Avaya. NEC is the primary product for Meteor Tel, not as known in the marketplace. It is a different sell. They’re really looking at customers that want basic UC applications. They want them reliable and they want them at the right price, is the key.
From a sales perspective, for Meteor Tel, we’re talking anywhere between $10,000 and a $100,000?
It really depends on what they’re buying, because they’re not buying as many applications, the deal size goes down. We sell systems in MeteorTel called the NEC 1100, which is $5000 or $6000. It’s satisfying 8 to 10 users, but the average sale is probably, what I would consider, anywhere from the $12 000 to $15 000, to the $30 000 to $35,000 range. That’s kind of their churn market. There is going to be highers and lowers than, but that’s majority of their churn.
For SmartIP, what’s 2-5 years down the road?
The company is going through a bit of a transition, and that’s not born by the fact that we want to, it’s what the market has changed. It’s placed the technology, the launch of IP and set base product lines have moved into Cloud services. Essentially its SmartIP is going to be in the Cloud business, we’re already in the Cloud business. But the key difference from SmartIP is that, it’s a part of our products suite. If it fits the customer and meets the customer need, it gives them the applications, to us it comes down to a financial decision. Do you have the money available now? It’s always cheaper to buy your products and take the hit early. But if a customer wants access to products, not sure of their direction and so on, the hosted and Cloud services are a lot better fit for a client like that, so what position either. Our future in the next two to five years is that, we expect to get a lot deeper into the data elements and more the IT like virtualization clients and so on. Even though today we do 50% to 60% of our installs through a virtualized environment, a lot of customers are separating into a multi-vendor shop. Our mantra is to go in there and say..
"We can do it from A- Z , one throat to choke.
We use that approach to give them the
technologies they need to be successful."
"Technology is an evolution.
The best way to describe it, is that the
manufacturer always wants you to
push everyone to be at the bleeding
edge of all technology all the time."
Deliver secure and scalable communications
with our comprehensive suite of software-based
UC platforms for any IT, voice and application environment.
Difference between Cloud & PBX hosting?
Cloud basically does nothing on premise. The customer really owns nothing. It’s a pay-as-you-go service. Customers, what they see is telephones on their desk, and essentially all the services and applications are being driven from a data center. There’s many models in it, could be our data center, could be a manufacturer’s data center, so we do many flavors of that. The only other aspect of that is, what we consider managed services, where we go in and we sell a turnkey solution for the client. Sometimes they would rather buy it over a period of time and have things like not just break-fix items, but even moves-adds-changes to be included in a one price per month component. It’s a service that we offer in that space as well.
What we’re finding in these spaces that you’re seeing, that’s a lot for the analysts where a lot of the big manufacturers, whether they’re Cloud IT providers driving applications to the cloud, or guys like us that are more UC focused, essentially are showing these huge adoption rates, which we’re not seeing. We can clearly state that customers are looking at this option, but because it’s fairly new in the market place, they don’t understand the complexities associated to it. It’s just not a matter of making a single decision. The other thing that’s critical for them is, the fact that the true cost, savings when it comes to hosted is to remove the people that are involved in delivering those services internally today. It’s not just what bill they’re paying, it’s the people that deliver the service. The second is, what does the future look like, because when you go into a hosted type environment, you’re really giving the keys to somebody else. If your plan as a company is to grow through acquisitions, multiple offices, expand into new technology areas that you’re not touching today, like Wireless Voice, wireless data, all those things are elements that you have to be careful of. Because hosted is really giving them the keys to provide you that service to your desk, and essentially share all your network with that provider. A lot of it is, once we get in front of a client, they’ve already told us, we’re looking at two CP options, at least one hosted, to do at least a price comparison. But when we peel the onion back a couple of layers, it really focuses back on the financial model for them to do CPE. Smaller clients will go hosted, because they don’t have the internal IT brains to manage anything. We are seeing a change in the marketplace, but not as fast as what we’re yearning, as far as adoption rates go.
Ken MacDonald, General Manager
Ken is responsible for all aspects of the customer experience at Smart IP, including system implementations, order fulfillment, customer service and technical support. Among his many attributes, Ken has a proven track record as a senior leader with extensive hands-on business management and technology experience.
We hope you enjoyed our 3 Part Series “An Interview with Ken MacDonald”
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