Why UC service providers need a new model beyond reselling cloud giants’ UC seat licences
While the pandemic has accelerated adoption of UC and fostered enormous acceptance and familiarity with Microsoft Teams, Zoom, Webex and the raft of standard UC cloud apps, the next step is to assess what is needed to enable enterprises with the customisations, features and support they need as hybrid ways of working become standard. It’s clear that the upsurge in UC users over the last year has placed the cloud-based UC providers in a position where their logos are on everyone’s PCs and their brands are recognised but this presents a series of challenges.
UC&C service providers are faced with becoming disintermediated in the market place with their brands and services swamped by the standardised offerings of the cloud giants. At the same time, enterprise customers are not getting the functionality, customisation, service and advice they get from a UCaaS service provider from the cloud giants. Meanwhile, the reseller has limited control of the price paid by the end-user for the service and is forced to pivot their business model to one based on professional services income.
Enterprises want to be able to access specific features and benefits from their UC&C suite and have greater flexibility in how they use and consume UC services. This is borne out by the performance of netsapiens, a specialist provider of B2B UC&C and contact centre solutions for service providers. The firm has reported the user base of its SNAPsolution platform has added 700,000 users in a little over one year, growing to 1.7 million users in total. Even before the pandemic, netsapiens was seeing adoption of its solutions as enterprises embarked on a gradual shift towards remote working but the ability to roll-out urgently needed features to service providers and their customers has set netsapiens apart alongside its business model, which enables profitability for the service provider.
The company’s model is to charge based on sessions, not seats which allows service providers greater flexibility and creativity in how they price services to their customers. By not charging for their licences on a per-seat basis and rather on a per session basis, netsapiens service providers only consume their licences if they are in use. netsapiens has tracked the usage across its 1.7 million user base and found that only 4% of typical company users are on a UC call at any one time so having seat licences for 100% of workers means companies are paying for UC that is unused for 96% of the time.
This is not only costly but also limits resellers’ scope to differentiate because they are constrained by the per-seat charges of the UC giants. With netsapiens, end users only typically pay for one active session for every 25 users, which can put margin in the service provider’s pocket.
“Our commercial model benefits service providers in many different ways but mainly by giving them the freedom to create a differentiated service offer,” says Scott Goodwin, the Senior Vice President of international markets and Managing Director of netsapiens UK.
“Decoupling the cost of a UC seat by charging for services only when in use, allows the service provider a lot more freedom in how they want to price. When you pair that with our universal feature set, essentially all functionality is included within one licence bundle, the service provider then can effectively create as many licensing personas, in terms of feature bundles and pricing plans, as it wants, optimising margin opportunity for the partner”
For Goodwin, providing the ability for netsapiens resellers to grow faster than their peer group using a different platform, is an important indicator. “We’re seeing our partners grow their margins in a sector that is being rapidly commoditised and this point is the one that brings the most pride,” he adds.
“I know from firsthand experience how hard it is to maintain growth and margins as a service provider it’s incredibly difficult. We see our role at netsapiens to be a business partner as much as a technology partner to our customers. All our efforts in netsapiens are focused on helping our partners achieve better outcomes for their business. Be that increased margins with better commercial models, better end-user experiences by with a rock-solid scalable platform, or enabling our partners to integrate third-party applications with a class-leading API, it’s a true partnership and we’re not pushing service providers to a reseller model or tyring to disintermediate them.”