As the local IP connection becomes faster, more reliable and cheaper so the market for hosted applications will really start to take off. For the reseller that owns that IP connection into their customer the opportunities for growth and profit are fantastic.
In this increasingly mobile world why do SMEs need to have servers in their own offices? Keeping operating systems and software up to date is expensive, as is on-site technical support. The extra power required and heat generated by modern servers is proving a challenge for those SMEs for whom their Data Centre is little more than the cupboard under the stairs. Similarly as companies come to rely increasingly on technology, so security and resilience become real issues.
SMEs hold onto their in-house IT because hosted applications need fast, reliable, cheap bandwidth between the off-site Data Centre and the companies’ offices. Leased lines are still too expensive and ADSL is considered too flaky.
The roll-out of Next Generation Networks (NGNs) and in particular BT’s 21CN promises to provide the missing link. Bandwidth will come down in price and ISPs will start to offer meaningful SLAs, guaranteed bandwidth and QoS (Quality of Service) with their broadband. Although we all still have to rely on copper in the last mile, 3G routers and load balancing lines from multiple suppliers will overcome local loop reliability issues and the final barrier to hosted applications will be removed.
Rapid growth will happen first in the SM market where ironically the scarcity of credit will help those resellers offering a utility-priced solution. At the same time, inevitable business failures in the supply chain will focus SMEs on the financial stability and trustworthiness of their suppliers. You will certainly want to know more about the background to an organisation when they control your company’s telephone communications and your desktop.
If this starts a trend towards trusted brands then it could open the door for the established telcos. All of their NGN edge switches have class 5 features built in and if they ever work out how to productise them for the channel they could clean up.
And let’s not forget the relentless Bill Gates. With Microsoft software in just about every enterprise in the world he has his sights set on the voice market too.
The good news for resellers is the large telcos’ dismal record in the SME market. Selling and retention costs preclude them from directly engaging with anything but the top 3000 – 5000 companies in the UK and they need the channel if they hope to address this market.
Source: Comms Dealer magazine July 2008.
Andrew Dickinson
