The modern day business customer wants more than a simple telephone system. Even for those with an on-premise PBX with no intention of moving completely to a hosted alternative, there are still a whole load of cloud options on their wish list – and as an on-premise PBX provider, you know that it would be a smart business move if you could provide them.
Indeed, whilst current adoption rate of hosted PBX for the time being still stands at around 36%, there are many indicators which suggest that adoption is likely to skyrocket over the coming years. This turning of the tide means that the on-premise PBX provider would do well to exercise some foresight, and start making moves now to ensure future competitiveness.
All companies of course want to be the all-in-one solution, but those who have established themselves firmly in the realm of traditional PBX are starting to feel the heat from the hosted PBX competition.
Hosted PBX, of course, is proving to be extremely attractive to many new start-ups and existing SMEs who are looking at ways to modernize and cut business expenditure. Cloud technology is proving to be the great leveler of businesses on many fronts, and, to be frank, one is hard-pressed to find an area of IT where this is more apparent than with PBX systems.
On-premise PBX has for many years given business the professional edge. Music on hold, advanced calling features, call transfers, forwarding and all the rest. But it’s been expensive – often prohibitively so, especially for the lower echelons of the SME category. But, with hosted PBX, an equally professional business telecommunications system is now readily available for even the smallest business with the tightest of budgets.
Scalable, flexible, resilient, extremely cost-efficient, and with steadfast business continuity plans all bundled in, it really is only a matter of time before hosted PBX becomes the norm, rather than the exception.
And, as the hosted PBX revolution takes hold, pressure is inevitably being placed on traditional providers who are having to turn away potential new customers who can’t come up with the upfront capital required to get set up with an on-premise PBX. Selling hardware is becoming increasingly difficult and will likely become almost impossible over the next five years. Indeed, the traditional PBX provider perhaps only ever has a once-every-five-year recurring revenue stream when their customers finally decide it’s time to upgrade their hardware. The worry, then, is that these once-loyal customers won’t be coming back next time round, as hosted PBX becomes increasingly prominent, affordable, reliable and competitive.
The Transition Period
Of course, hosted PBX is not the norm yet, and telephony is a big boat to completely turn around. And, as such, it’s safe to say that no one is going to go out of business just yet – but companies do need to be prepared.
If you’re selling premise-based solutions only, when what many new customers are increasingly after is cloud options and holistic communications solutions, things might well start to get a bit tough in the years to come. Put simply, during this great transition period, what the smart seller needs is to be able to offer is feature-rich, high-value products as well as the data services that hosted PBX can provide – because that’s what the 2017 business customer is demanding. What is more, it’s imperative that you continue to be your customers’ single source, or else you risk losing them completely to full-service hosted PBX providers.
The Rising Opportunity For VARs
It should come as no surprise to learn that full-service hosted PBX providers are going aggressively after this opening in the market. Indeed, they are trying their hardest to prise this opening as wide as it can go so they can slip in most comfortably. And it’s working.
With hosted PBX, all the PBX features that are so coveted by the modern enterprise remain hosted in the cloud, whilst the on-premise equipment can range from just IP phones plugged into the SMB’s existing data network, to phones, switches and routers building a parallel data network for the voice solution.
This model is a serious threat to the sales of traditional PBX. And hardware sales get hit, so too, of course, does the services revenue that goes into the support and maintenance of that hardware. When the hosted PBX revolution takes off – which it most certainly posed to do – the market for premise-based phone systems will in all likelihood correspondingly shrink rapidly, and that spells real danger to the traditional PBX VAR.
But, rather than sitting back and watching it happen, what this scenario actually creates is an opportunity for those same VARs to adapt their business models. The first thing to do, of course, is to become a selling partner with the hosted providers. Indeed, the knowledge and skill set that was instrumental in making the successful VARs good at positioning premise-based telephony solutions will be key to helping customers identify the right hosted solution for their needs.
Indeed, existing VARs who have sold and supported premise-based solutions in the past, are actually in prime position to take full advantage of and capitalize on the rising threat of hosted PBX solutions, as they confidently go on to usurp the market of legacy phone systems.