Vendor Provides Perspective on Consolidation, Direct Sales Effect on Channel Business

LONDON – Vonage has been in the telecommunications industry for many years. As new trends, such as video conferencing and unified communications, were rapidly being developed and adopted, Vonage evolved into a complete solution provider for cloud-based communications. Sales were U.S.$1.409 billion in 2021. Its cloud-based Vonage Communications Platform (VCP) serves more than 120,000 customers and more than 1 million registered developers globally.

Last November, Ericsson agreed to purchase Vonage for U.S.$6.2 billion. On completion, Vonage will become a wholly-owned subsidiary of Ericsson but continue to operate under its current name.

During the Channel Evolution Europe conference, we had the opportunity to talk to Adam Wilson, Strategic Partner Director, EMEA & AUS, Vonage.

Wilson argued that the pandemic has dramatically disrupted the way most organizations work. Many had to scramble to enable their teams to continue working during lockdowns. Additionally, more traditional companies discovered that they were not prepared to deal with the challenges of remote work.

For the channel, Wilson believes the main challenges today are the disruption of their traditional service business and the move to cloud-based subscription services. Organizations are no longer interested in on-premise solutions; they want to be more flexible in their communication systems and add new, on-demand services to stay competitive.

The following is a transcript of our conversation with Wilson, edited for clarity.

PV:      Good morning, Adam; thank you for your time today. The pandemic has changed the way many organizations work. While many have returned to work full-time at their office, hybrid work is becoming increasingly popular for many organizations. How do you see the trend in years to come?

Adam Wilson:  First of all, the way we work has changed fundamentally. Businesses, of course, are challenged by this hugely and are leveraging cloud communications to better connect their employees and make better connections to their customers.

I see this evolving as a more aggressive transition to the cloud for telephone systems. There is still quite a lot of transformational work to be done by many businesses to adopt the cloud for their telephone needs.

Also, continuing to personalize customer contact. So, businesses serve their customers by way of their front door. Their front door could be their website, a telephone number, or a social networking channel. No matter what medium, companies have to evolve their infrastructure to better communicate with their end customers.

And those two things also need to be unified. Companies will transform these disparate areas at the same time. And they’ll probably look to one vendor or at least one unified platform to deliver this outcome.

PV:      You mentioned during your talk that one big challenge for the channel is that some vendors go directly to customers with cloud-based as-a-service solutions.

Because of the changes we just mentioned, it is difficult for channel partners to find the right product mix to remain relevant and realize the new opportunities emerging right now.

What do you think distributors, VARs, and other MSPs need to do to continue and grow the business?

Adam Wilson:  The advent of cloud services came to our attention some time ago, and I think it’s fair to say that the adoption wasn’t as rapid as we wanted.

But now, sitting here post-pandemic, I think this has certainly hit the fast-forward button on adopting cloud and as-a-service business models.

Long gone are the days of requiring a distributor to ship a kit, to rack and stack that kit, potentially in a switch room or a data center, to worry about putting that managed, hosted environment or on-premise environment together for a customer.

It’s a true multi-tenant public cloud offering. So the value exchange with the channel has to change and is already changing. So VARs, MSPs, and the channel must adopt a new value exchange with their vendor partners. There’s still a significant role for them to provide.

The central role I believe they should provide is being a trusted advisor to their customer, to reassure and help their customer through these times, because most businesses are struggling with this challenge. They need trusted advisors to help them adopt the right technology to deliver the right outcomes for their business and their end customers.

There are certainly consultancy services they can provide. Vendors like Vonage and others offer training enablement certification so that partners can be very knowledgeable in front of the customer, providing the best possible consultancy.

PV:      So, everything in the cloud and the industry is moving to artificial intelligence, machine learning, and things like that. How can you help your partners move to these new product lines, including automation for communications?

Adam Wilson:      To take artificial intelligence as one example, Vonage has acquired several AI companies. One company allows us and our partners to provide virtual assistants to businesses; another offers the capability to help customers converse, regardless of channel, with their customers and convert sales.

So, we’re working with customers in the beauty product segment to improve the sales conversion on mobile websites using what we call “conversational commerce” and AI technologies.

There’s a role for partners to help in the setup and management of a solution that empowers businesses to provide a virtual assistant. Some may think of this as a bot that appears on the website. But in the instance of the virtual assistant, you are configuring the platform to address the repetitive, relatively simple questions you receive and provide triage to a human agent. That allows you to increase the productivity of your workforce exponentially.

You’re not replacing that human interaction. You’re reserving the human interaction for those critical conversations you want with your customer but enabling your business to scale and automate that triage process of those simple daily inquiries.

PV:      Adam, again, thank you so much for your time and for sharing your views of the market and the importance of the channel.