The Convergence of Voice and Data

Data

The world of a technology provider is an ever-evolving soup of acronyms, technology, products, and business methodologies. Whether it’s adding new services such as data back up and disaster recovery, or completely changing your business model from break-fix to managed services, staying current may seem impossible. Today, a lot of talk centers on “owning the customer”. This typically means owning all the end points on a network, such as displacing copy companies by offering managed print services.  With so many choices, it can be difficult to know which bandwagon to get on – you have to balance your time and money as you invest in technologies that will add value to your existing business and generate a profit.

The nature of data is changing.


As an IT/data company, one area that you should consider devoting your attention to is voice. It used to be that VARS provided data hardware and services and telcos provided telephone systems. The division was distinct and everyone knew their role.

That line is quickly blurring.

Telephone systems were once closed, proprietary systems, and manufactures were often absolute in their territorial positioning; you had to buy from “the guy “in your area and no one else would sell to you. This created a customer base that was locked into buying expensive hardware from a single vendor. Big margins were common. Now, technology such as SIP and the proliferation of relatively cheap bandwidth have made telephone systems endpoints on a network, and data guys “get” the network. This marriage of voice and data is called convergence, and it’s really catching on. In fact, convergence was the theme and focus of my company Tigerpaw’s recent Tigerpaw National Conference, and will play a large role in our event this year.

Make no mistake – the smart telcos are looking to get into the data game, and there are many vendors willing to help them make the transition. Many old-school telcos face a number of challenges as they attempt to move to data, however. First, many of the more established telcos got started in the 70s when “Ma Bell” was broken up, and their leaders are looking for exit strategies, not new business models. Managing data networks and all that goes with it is considerably different from managing phone systems, so an investment in new people or outside NOC services can be a barrier; in general, it’s easier for a data guy to get into voice than the other way around. While this can pose a substantial challenge, many teecos have huge customer bases – often numbering in the thousands!  Think about that for a second. What penetration could you make with a new product or service if you had, say 2,000 existing customers to talk to? The telcos that make the transition have a pre-loaded database of hot leads and can quickly become a threat to IT shops.

On the other hand, data guys have technology on their side. It used to be difficult for VARs into get into selling phone systems, and the tip-and-ring technology that dominated the telco world was hard for many data guys to grasp. The technology has changed radically, however, and many manufacturers have moved to IP switching systems. Data guys get IP. With the proliferation of cloud-based voice systems, the barriers to entry for even the smallest IT shop to get into voice are breaking down. And while it seems that the margins on IT hardware have had a go at Alice’s potion and consequentially shrink smaller and smaller, voice systems can provide comparatively high margins.

If you’re a data guy looking to get into voice (and if it’s not obvious by now, I think you should be pursuing this option), start by looking at the demographic you serve. Are you currently servicing large clients? Small clients? Are you in a specific vertical such as health care? What kind of start-up costs can you afford (if any), and what time commitment are you willing to make to learn new technology? You need the answers to these questions as you approach potential voice partners. Different manufacturers offer different solutions, all with different price points, features, and technology. The right partner for you is the one that not only provides solid solutions for your target market, but also provides you with the training and support you need to be successful selling their voice systems.

So, who is going to win? Is it the data guy that “gets” networks and already has a strong relationship selling IT services to their customers, or is it the voice guy that has a huge customer base and often more employees? The answer is neither – and both. The successful solution provider of the future isn’t a data company that adds voice, or a telco that adds data. The converged company – the real winner in all of this, is not just the sum of the two, but something unique in and of itself.

At Tigerpaw Software, we’ve been the leader in automating telcos for years, but our data clients have grown and now match our teeco clients in numbers (1,000+ on each side). We’ve observed – and been a standard bearer for – convergence for a number of years. We’ve seen first-hand the results of those companies that have successfully made the transition – and it’s impressive!

Whether you’re a voice guy looking to get into data or a data guy looking to get into voice, you have some work to do – and there is no easy path. You’ll hear more and more talk about “100% coverage” as vendors woo you into layering their products and services over yours. If you still think of telephone systems as proprietary systems outside the network, it’s time to rethink that view. In the end, your customers want one bill to pay and one “throat to choke”. By combining voice and data (convergence!), you truly have a chance to own the network. If the voice system is on the network, and you own the network – you own the customer. That’s 100% coverage!

James

 

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