8x8 Discusses Value Proposition of the Cloud to Channel Partners @ Internet Telephony
Check out this TMCnet Feature article on September 14, 2011, written by Paula Bernier, Executive Editor, IP Communications Magazines
In the August issue of INTERNET TELEPHONY, 8x8 Inc. CEO Bryan Martin talked about his plans to alter the company’s sales approach. Today at ITEXPO one of the leaders of that change – Kim Niederman, 8x8’s senior vice president of worldwide sales – talked about the value proposition of cloud services for the company’s channel partners.
Cloud is the next shift, said Niederman, “and it’s not so much a shift in technology as it is a shift in go-to-market.”
That said, it’s important that channel partners understand this shift and how it can affect their businesses, and increase their revenue, Niederman said. He added that the channel can earn 2.5-times-plus more per year in recurring revenue, and more upfront revenue, by selling SaaS- and IaaS-based services.
By becoming trusted advisers to SMEs as they move to cloud services, integrating desirable service packages, and offering exceptional customer service, he said, channel partners can position themselves to grow revenue with the delivery of cloud-based services.
8x8 recently worked with Infonetics Research on a case study that shows what channel partners stand to gain from embracing the cloud. The real-world case study involved a Fortune 500 health care organization with a widely distributed workforce that wanted to integrate its various sites, as well as home offices, under a single, unified voice system – and in the process streamline communications and boost employee productivity.
The customer, who needed to support 100 extensions, wanted to lower its IT budget, asked for a cloud vs. premises-base cost comparison, on-demand services, the elimination of multiple vendors, and the ability to add services later.
In the end, the on-premises vs. cloud-based UC/PBX solution – which included upfront costs and installation of equipment, hosted service fees, equipment maintenance, equipment upgrades, operations and administration, broadband and phone lines, and local and long-distance charges – came out as $530,937 (for on-premises) vs. $307,174 (for cloud-based) solutions over five years, said Niederman.
Yet, for the channel, the on-premises model generated just $20,636 in the first year, and $2,529 annually in the subsequent second through fifth years (totaling $30,752), said Niederman. Meanwhile, he said, the cloud model resulted in channel revenue of $21,631 in the first year, and $6,342 annually in the subsequent second through fifth years (totaling $46,998 – or 53 percent more).
“This is just related to VoIP,” he added. “It doesn’t relate to the video and anything else a [company] might buy” down the road from the channel partner.
What’s more, he said, by offering cloud-based services, the cloud provider doesn’t even necessarily have to set foot on the customer site, yet it still gets a foot in the door to sell other services like conferencing, video, hosted services. “And, guess what, I get paid commissions on these services,” said Niederman, putting himself in the shoes of his channel partners.