In the age of internet telephony, do we need traditional fixed line infrastructure? CBR sat down with Alex Tebbs, Sales Director at VIA, to find out more.
CBR: Do you see the unified communications market heading towards shorter, more flexible contracts?
It’s customer-driven; that’s what the customers are asking for. We did the 30-day contracts to start off because we were a new business and we didn’t have the credibility of long-term businesses. How could we incentivise customers to come onto our platform and how could we take away the risk of going with this new telecoms provider.
With a thirty-day contract, if they want to leave, they can leave. Now we’re an established brand, certainly in the Microsoft space, and we’re building out into other verticals; we’re still keeping that 30-day rolling contract because that’s part of us. That’s what defines the VIA contract; the ability to scale-up and scale-down.
A lot of small businesses are quite volatile. They don’t know what they’ll be doing in six months, let alone in five years. Signing a contract for five years is very difficult.
CBR: Why are traditional telecoms providers able to get away with longer contracts?
That’s what was expected, these long-term contracts. Also, lines and minutes is what makes up traditional telecoms. You pay for your lines and you pay a lot of money for the minutes. What you pay on a monthly basis you can’t really predict, because it’s going up and down.
What we’ve tried to do is move away from it and price it per user, and we bundle as many minutes into that price as possible so it’s a very predictable monthly cost for the company.
Traditional telcos are also governed by the contracts that they have. A lot of people are just reselling Openreach or other lines, so they will be governed by 12-month, 2-year, 3-year contracts.
Because all of our services are delivered over the internet, a lot of customers have got good internet connection, so we’re just piggybacking on those services. We don’t have the overheads or the restrictions of traditional telcos.
CBR: If companies are already paying for internet through a telco, why would they not get communications services through the same provider?
A lot of companies will have their IT provider, their telecoms provider and a few others. Most of the time the internet is provided by the IT provider, not the telecoms provider. We resell our platform through IT providers; that’s one of our main routes to market.
When we started the business we did go to traditional telcos and tell them that this was the future. But they’re so used to having these fixed length contracts, selling physical boxes that their engineer can go and install on-site, this small, monthly recurring payment didn’t fit into their business model.
CBR: How does this work from a sales perspective?
We don’t really sell through traditional telcos; we’ve probably got one or two reselling our platform. We’ve probably got about 30 IT providers selling our platforms because it’s turning into more of an IT service. There’s no longer that segregation between IT and telecoms; they are one and the same thing.
It also increased business continuity and DR. If you have a fire in your building you just go and work from home. It’s all powered through the app, and the app is installed on your smartphone, your Android, your iPhone, laptop or Mac. You download the app and that becomes your telephone.
CBR: Is there a need for fixed line at all?
We don’t believe so. SIP has been around for a very long time, but it’s not really been pushed by the large providers because why would they when they are making so much money out of fixed lines and minutes. Why would they sacrifice that revenue stream?
Now the momentum has swung and everybody is moving over to it. There is a stigma around it about whether people fully trust it, whether it’s resilient enough. Certainly from our experience it is. Other telcos will say have a SIP trunk but have an ISDN as back-up for resiliency.
We don’t believe that’s required. If you can access it from anywhere with an internet connection then you don’t need that. People are moving away from on-site, just like they are migrating all of their other applications to the cloud, such as storage, email and CRM.
Telecoms is just another IT service as far as we are concerned that they should be able to move to the cloud and get all of those other cloud benefits.