InterviewUC&C22 Jul 2021 · 13 min read

Channel Round Table: Connecting Modern Workplaces

Channel partners face the copper and PSTN switch-off as hybrid working drives demand for FTTP, SoGEA, SD-WAN and Full Fibre.

David Dungay

The workplace of the future is hotly debated in the channel right now. Partners are searching for new ways to drive value for customers, protect their margins, and ensure they stay relevant for the long term. In this round table the market discusses the challenges and opportunities available to partners selling the technology that underpins every workplace today… connectivity.

Connectivity is the backbone for any business trying to build the workplace of the future. Not only does it help bring teams together in an increasingly digital world, it is the umbilical cord connecting businesses with their customer base. When a connection fails, businesses measure outages in terms time and money lost.

Governments across the globe have realised the importance of connecting businesses. Although the delivery method can vary from region to region, the channel can play an important in getting the right connectivity into the hands of business customers.

What are the major challenges for the channel providing connectivity in 2021 and beyond?

[caption id="attachment_39208" align="alignright" width="280"] Dave Hawkins[/caption]

Dave Hawkins, Head of Channel Sales, Kcom:

One of the biggest challenges for the channel providing connectivity in 2021 and beyond comes in the form of the geographical locations of offices. As we are all aware, working from home during the pandemic has become the norm for so many, and this new way of working has made people reconsider traditional locations of working. According to Global Workplace Analytics, 25-30% of the workforce will be working-from-home multiple days a week by the end of 2021, and this will only continue to rise after. As working from home becomes more prevalent, providing strong connections becomes essential; employees need to be able to access all essential servers, files and be able to have interruption-free video calls.

A quality connection is also necessary for higher levels of productivity - nearly 9 in 10 (89%) home workers – waste an average of just over 30 minutes a day as a result, with 1 in 8 of that group (12%) losing 1 hour or more (Zen Internet, 2020). If the connection provided is not up to scratch, these types of secondary problems can occur.

Anthony Senter, CEO, SDWAN Solutions:

As cheaper FTTC and FTTP connectivity is more readily available and along with 4G, commonly used in SD-WAN deployments, the Channel may see their revenues dropping as customers scale back buying leased line services on 3 year contracts. Customers are also realizing that MPLS is not necessarily needed and may not renew existing contracts, or upgrade existing lines, preferring to rather install SD-WAN solutions, with multiple connections and technologies.

Andrew Wilson, Head of Wholesale, CityFibre

The key challenge for the channel over the next few years is in determining where their future success lies in connectivity. The copper switch-off by 2025 will force some key questions:

How will you protect the business you have today (which may be heavily biased to copper)?
How do you capitalise on the opportunity presented by the copper switch-off?
What's your strategy to strengthen your foothold in Full Fibre – will you continue to rely on incumbent providers offering the same as everyone else, or establish new relationships with suppliers that are proving to be a real catalyst for change?
How will you protect your future in connectivity? Where will be your next market opportunity?
And most urgent of all - Do you have a strategy and a plan for guiding and supporting your existing customers as they increasingly return to a workplace with new and ever-increasing demands on their connections?

The pandemic has highlighted the importance of connectivity for everyone, but it’s also uncovered existing issues for many businesses. Relying on legacy copper infrastructure that’s no longer fit for purpose is encouraging businesses to investigate newer connectivity options. Plus, there is now a growing need to support new agile working environments which will throw up further challenges for business owners and opportunities for channel providers.

Now is an exciting time to be a provider of Full Fibre connectivity. There are so many business customers re-assessing their current set ups, looking to new technologies, who are now willing to invest in their connectivity.

Where do you see the biggest opportunities for channel around connecting the workplaces of today?

Paul Taylor, Sales & Marketing Director, Voiceflex:

We are seeing a significant shift to SoGEA and FTTP, replacing ADSL and low-end Ethernet services. This shift will continue with the PSTN switch off in 2025, and there will be a land grab for the new service offering. Fibre companies continue to expand their reach throughout the UK, making FTTP a competitive option. We will see new over-the-top products emerging as micro companies move to SoGEA and FTTP.

Hybrid as a Service (HaaS) is very much on the agenda of companies large and small. Work from home (WFH) is adopted as standard practice by most companies, and the home experience needs to be as good as the work experience. Data connectivity plays a significant part, and employers are installing ‘Business only data services” - with the whole family working or studying from home, domestic connections are not coping. But why should the homeowner increase data speed for work-related connectivity needs?

Matt Worboys, Business Development Director – Channel, Gamma:

There are a number of opportunities for the channel in the connectivity market. First of all, while hybrid working has created many challenges, it also brought connectivity to the limelight. Businesses now understand that they can’t afford even a moment of downtime, and that they need to provide high-speed and reliable connectivity to their workforce, regardless of where they are. Considering that and the growth of SaaS during the pandemic, businesses need connectivity services that can support the sheer amount of data now on the cloud.

The PSTN switch off also presents a great opportunity for the channel. Thousands of businesses will need to move away from legacy infrastructure and onto FTTP or SoGEA, and they will be looking for a trusted partner to make that move.

Finally, the channel shouldn’t underestimate the role of mobile connectivity in the coming years – Gamma have partnered with Three UK in this area. According to research, 5G can be four times faster than the UK average fixed broadband speeds, making it a very compelling choice for those businesses looking to upgrade their connectivity services and requiring low latency and fast download speeds.

Anthony Senter, CEO, SDWAN Solutions:

Definitely in managed network and security services like SD-WAN and SASE. Gartner themselves predicted in their 2019 Strategic report for networking that customers will turn away from large monolithic providers, and instead look to niche managed service providers and new technologies.

Even the traditional network resellers with no SD-WAN knowledge or experience can successfully complete in the market by partnering with an experienced SD-WAN managed service provider, to fill their knowledge and product gap. At SDWAN Solutions, we work with every single one of our channel partners to include their own core services in such solutions, which results in a win – win outcome for the channel partner and their customers. The channel partner can offer multi-vendor SD-WAN services, including their own connectivity, security and managed services, and their customers get a solution tailored to their exact needs without having to change suppliers.

Martin Saunders, Product Director at Highlight:

To maximise the opportunities in connectivity, the channel needs to change their approach. Rather than having a technical viewpoint based on widgets and speeds, they need to come from the opposite end, looking at an overall business and what services staff need to work effectively. From this point, they can identify the applications and services that are necessary to support the users. This may involve home working, the ability to work from anywhere and the likelihood that the use of office space will decrease in importance.

The opportunity for the channel is in helping customers to see through the fog of uncertainty. By focusing on the users and their applications, the provider and customer can improve their understanding of how users need to work. This provides a target infrastructure and a plan of action that can be developed and implemented over a reasonable period of time.

Connectivity is vital for the use of modern applications such as Unified Communications. Without the network nothing works. With strong and reliable connectivity, providers can modernise their customers’ businesses by delivering cloud applications and technologies, and the connectivity becomes an enabler rather than a hindrance.

[caption id="attachment_39209" align="alignleft" width="187"] James Banks[/caption]

James Banks, Technical Director, Charterhouse:

The channel has a real opportunity here to take the lead in enabling clients to understand the “art of the possible” for the modern workplace – and it is about so much more than just simple “connectivity” – we believe that “organisations of all sizes need to be able to connect in a fast and reliable manner – to enable internal and external collaboration – and to be able to do so securely.”

Clearly “connectivity” is a key concept there – with a range of new technological approaches facilitating faster, more reliable and more cost-effective solutions – FTTP, SoGEA, 5G and various forms of wireless networking capabilities to name but a few – and there is a real opportunity here to deliver additional relevant services – security and collaboration technologies go hand in hand with connectivity – and partners that have invested to build the capabilities to deliver solutions that include all of these elements together are able to offer something different and compelling in the marketplace of today.

Has connectivity become another commodity for channel? Is there still opportunity to add value and gain good margins today?

Paul Taylor, Sales & Marketing Director, Voiceflex:

I am seeing the data circuits being part of an overall project, and the connection needs to be man enough to do the job required. The connection is the umbilical cord to the world, one of the most fundamental business products. Reliance on the cloud will continue to grow; anyone selling or buying on price alone is not doing themselves or their customers any benefit. I don’t believe data is a commodity.

Dave Hawkins, Head of Channel Sales, Kcom:

Connectivity is absolutely a commodity for channel, and there is an opportunity to add value and gain good margins, particularly though upselling and cross-selling. Offering a standard connectivity package is a good foundation, but then value can be added by expanding this with cloud solutions or voice solutions for example. These solutions can be standard OTT packages, or even better, the companies can be researched and offered bespoke connectivity solutions.

The quality of service provided cannot be understated – if the quality is high with a good line of reliable support, this can help you stand out from the crowd and gain good margins.

Andrew Wilson, Head of Wholesale, CityFibre:

Yes, but that’s not a bad thing! Commodity doesn’t necessarily mean ‘cheap’ or ‘devalued.’ It means essential services like electricity and water. It also presents an opportunity for channel providers to add value to a ‘standard offering’ for their customers.

Electricity is a commodity, but you wouldn’t accept the lighting at your desk dimming as your colleagues arrive and switch on more lights. It’s the same with bandwidth. Connectivity has become a commodity because customers' needs have increased, especially now as they return to the workplace but continue to need to incorporate practices adopted under a full working-from-home approach.

This market is not just ever-expanding as more customers need faster, more stable connectivity with greater capacity; it's a market ripe for review - re-addressing the suitability of their current connections to better serve existing needs and meet new ones.

Commoditising connectivity doesn’t need to mean lowering margins - There is still margin in Ethernet served by growing Full Fibre networks, while Business FTTP will enable channel partners to serve the market at scale.

[caption id="attachment_39210" align="alignleft" width="186"] Martin Saunders[/caption]

Martin Saunders, Product Director at Highlight:

Managed services are the way to add value and gain margins.  Connectivity is always changing, with new technologies on the horizon that make it get faster, cheaper and more reliable. The constant element is that customers don’t want to worry about it, and they need their technology partners to manage it for them.  A proper managed service is where the provider spots a problem first and then notifies the customer.

No-one knows how the demand for - and use of - networks will settle out over the next few years, but we do know it will be a very dynamic environment and so the smart providers - and enterprises - are positioning themselves to be agile and ready to adapt. Helping businesses cope with change has always been a major opportunity for providers, and so those with the strong customers relationships will be the ones that get invited in.

This means the big opportunity is for partners who can demonstrate a proactive managed service, rather than just reselling connectivity.  A proactive managed service needs to be offered in the context of the applications being used on the network. It is not about selling a broadband, ethernet or cellular network, it’s about understanding your customer’s business and then – for example - delivering the MS Teams network or Office 365 SharePoint network that they actually need. The focus must be on the important applications that the customer cares about – not the connectivity. 

James Banks, Technical Director, Charterhouse:

Potentially both scenarios here can be true across the channel today – certainly there are a great many channel business that have potentially seen some of their go-to-market offerings become commoditized – but the opposite is also true insofar as there are great opportunities to deliver a blend of services that add genuine value for end user organisations – managed connectivity services including a complete service wrap with the potential to layer on additional services including security and collaboration technologies – to comprise complete solutions that meet the needs and challenges many organisations face today.

To meet those challenges, many organisations are prepared as never before to make changes and work different – and as a result, I think we have to recognize that the marketplace has changed irrevocably – choice and flexibility are key concepts that are vital as businesses strive to support the changing needs of their customers and their people – and the resellers and integrators that have worked to build, integrate and deliver differentiated services to enable choice and flexibility stand to reap the benefits.

[caption id="attachment_39211" align="alignright" width="200"] Matt Worboys[/caption]

Matt Worboys, Business Development Director – Channel, Gamma:

For organisations to take advantage of today’s digital tools and embrace the agile, simple, and collaborative future, then fast data connectivity must be treated as the fourth utility. More and more businesses are realising that this is the case and are therefore looking for the best possible connectivity service they can get. This means that they’re likely to want to pay more for a secure, high-speed, robust, and reliable connectivity service.

The channel shouldn’t however underestimate the importance of working with a trusted provider, such as Gamma, to provide customers with connectivity services. Especially in time of uncertainty, businesses are looking for the latest technology that can truly make a difference to their productivity, as well as the support to implement them. Choosing the right provider, one that has a complete portfolio of the latest solutions, will be key to support customers and capitalise on connectivity opportunities.

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