Partner Community Roundtable - Part One

Introduction

Our Head of Product Marketing, James Lockhart sat down recently with several business leaders from the TelcoSwitch partner community to discuss observations and industry learnings from 2023, and consider how customer expectations and requirements will lead to changes in the telecoms industry in 2024 and beyond.

Attendees

Attendees for this discussion included a variety of senior leadership and technical experts from some of our most trusted MSP partners: 

• Aidan McManus, Technical Director - GHM Communications

• Andy Jamieson, Chief Technology Officer - Holler Technology

• Jay Ball, Chief Executive Officer - Flotek Group

• John Sutherland, Technical Pre-Sales Manager - Global4

Roundtable - Part One

In Part One of this session, we look back at 2023. Key topics include how market conditions have driven sales growth and portfolio diversification, as well as key verticals for each business and the features and integrations that serve them.

James Lockhart:  So, kicking off with 2023, we have had quite a lot of change in our business, having rolled out an entirely new platform from the ground up this year following a successful early access programme. 

We've continued a growth trajectory that we were on in 2021 and 2022 and it's been a really pleasing year. We’ve also seen our partner community work closely with us on the launch of CallSwitch One. We began public sales on CallSwitch One at the start of Q4, from almost a standing start. In November, 68% of our seats sold were on our new platform. So, we're happy with how things are going for us.

I’ll begin this discussion by asking you all for an overview of 2023. Aidan, I’ll start with you. How was 2023 for GHM?

Aidan McManus: It's been interesting year. This year has indeed been a growth period for us. We have successfully completed our first acquisition in the IT sector with others to follow in 2024. It's a real milestone, two years after the launch of our IT division in 2022, which has since experienced substantial growth.

Our strategy of cross-selling to our existing telecoms customers has significantly contributed to this expansion. The recent business acquisition is really a testament to our commitment to further enhance our IT capabilities.

We're currently in the process of integrating the newly acquired business into the GHM framework. We anticipate a smooth transition and expect the process to be finalised by the end of March. It's a consolidation will bring new opportunities to our business and our customers.

James Lockhart: That's about expanding the portfolio you've got to offer?

Aidan McManus: Yes. Gaining wallet share and cross selling between our client base is a strategic move, enhancing the value of our business and giving clients a single technology partner’s hand to shake.

We started our journey as a telecoms business 18 years ago. Over time, we observed the convergence of the telecoms and IT industries. This led us to launch our IT division within the GHM portfolio two years ago, which has already been highly beneficial.

We have longstanding relationships with many of our customers, some actually spanning all 18 years. In fact, we are proud to say that our customer no1 is still with us and in fact they now consume our full range services – telecoms, connectivity, and an IT service wrap. So now, our focus is to demonstrate the extended range of services we can provide to both the traditional GHM base and our newly acquired customers.

The growth in our IT offering and recent acquisitions has seen revenues increased by over 75% since the end of the pandemic. Our portfolio now extends beyond just phone system solutions. Network services, security appliances and managed IT support, we can even offer software development. All of that places us as a fully serviced technology integration partner.

James Lockhart: Andy, I’m going to ask you the same question. How has 2023 been for Holler?

Andy Jamieson: 2023 has been challenging, it’s also been our best ever trading year. We started the business in September 2020, at the end of the first wave of the pandemic, which seems a bit bizarre, on paper.

Three of us founded the business together, and while we started with no customers, we have all been in the telecoms world for the best part of 25-30 years and we’ve grown quickly.

This year we have doubled our growth, through branching into IT services such as desktop support. Offering that level of service is completely different, revenue-wise, profit-wise, everything.

We are largely focused on working with serviced offices. So we do a lot of shared Internet with network services including building-wide Wi-fi that is available to tenants securely.

One of my business partners, Richard and I did a lot of work in the service offices in the very late 90’s and early 2000’s. We developed a voice solution that was tenantable. It was all on-premises, but we had a very, very good share of those business centres.

Customers bought licences that they would write down over 10 years as opposed to the usual 3 years telecoms contracts, and they made their money through call charges.

All those revenue opportunities are gone now. Certainly call charges. So, we've had to branch out. We've also started doing CCTV and access control.

We also do facial recognition access control for shared offices. People don't need to carry cards. You can easily lose a card, but you’ll never lose your face type!

We've employed three more people this year off the back of that. Growth going up with the pipeline is looking healthy. We sold around 1,500 seats on CallSwitch and we’ve been working really closely with the CallSwitch One development team on building out a new proposition for the shared offices and business centres we work with.

The market looks buoyant, but we've got to spread out resources, and you've got to spread that portfolio around. If you started a telecoms business 20 years ago, it was all about phone systems and  call charges. Now we have no choice but to diversify.

James Lockhart: Jay, is the story the same for you, that the year has been good but challenging?

Jay Ball: Yes. We're about 60% IT and 40% telecoms so a bit different to the other guys. We've done ten or so acquisitions in the last 18 months, including four this year.

So clearly acquisition is important to us, but organic growth is equally important as well. So, over the last 12 months we've brought on over 200 new customers across our product portfolio, including around 1,800 VoIP users.

That represents 31% growth on VoIP, but our core focus really is IT and cyber security.

It's been a good year. We’ve grown in terms of clients; we’ve added lots of new heads into the business. I think probably one of the things that has improved this year, compared to the last couple of years, is finding people.

Cost of living is much higher again, and I think price increases are very common now across the market.

I started my first Telco in the recession in 2007, and it was a great time to grow a business, because unfortunately, recession drives people to change and to make savings. Over the next year or two we’ll see more people looking to save money, while obviously some competitors will be forced to put their prices up.

When it comes to telecoms, suppliers push hard on their solutions’ new and exciting features and capabilities, but most customers are now very price conscious. They want to reduce their costs, or at least avoid increasing them wherever they can.

As much as I think AI and other new features are coming in, and we have got customers who are driven by that, most people are very, very price conscious. More than we've seen since the last major recession, which is understandable.

Microsoft Teams is also a huge growth driver for us, perhaps the biggest.

Aidan McManus: Over the next year, there will be a significant emphasis on Teams. Microsoft is actively promoting this platform, with many adopting it as their primary collaboration tool. It's becoming a focal point in our discussions when presenting our solution. We’re also noticing an increasing number of customers interested in leveraging Teams for voice capabilities.

James Lockhart: So, presumably for you guys who offer a broader product mix, including IT services. Teams isn't a threat to you. Because you're selling those licences, and you’re able to offer a range of voice solutions for businesses who want it as their phone system?

Jay Ball: What we tend to find is, when we quote for Teams, we seem to be the only person who's quoting for Teams. The telecoms reseller doesn't get IT, and the IT reseller doesn't get telecoms. So unless you're coming up against another converged company, you are the only one offering that solution.

The margins might not be amazing, but what we do see is we start to see the adoption, then, of other product products like SharePoint, cloud-migration, and cyber-security solutions.

So we've taken a few clients onto Teams where nobody else could do it, and then we've won the IT side of it, you know, and the IT side is worth 10 times more than the Teams was. I think it's just that experience that we we're bringing to that client

James Lockhart: John, how about Global4? How has 2023 been for you?

John Sutherland: We’re seeing much of the same. In 2023 we’ve had massive growth. Our sales teams pretty much doubled in size. We’re recruiting like crazy, trying to keep the momentum going.

We've got a new telesales team, and we've expanded our field engineering fleet, so we've got a lot more in terms of solution delivery. We also just announced that we have acquired Gemini up in Cumbria to enhance our Northern presence.

We’ve also worked hard on portfolio diversification. To be honest, we were sick of losing telecom deals to IT companies that had more solutions to offer, so a year ago we bought an IT company, and now we’re bringing our own offerings to the table.

The line between telecoms and IT solutions has been blurring for a few years, and for most businesses they’re very much singular now.

The biggest achievement we had this year is we won Reseller of the Year at the Comms National awards, so it’s nice to shout about that.

In terms of VoIP and how we’re growing there, we've been doing a lot in terms of integrations. That's been the key. On that front, we’ve been really pleased with CallSwitch One, and the support you guys offer.

James Lockhart: I know you Global 4 are focused on some specific verticals, but if I could get a bit of a description on what those verticals are, maybe some of the key integrations that you've found?

John Sutherland: We're quite big in the Dental market and there are only a few dental-specific CRMs out there; Software of Excellence, Dentally, and a few others.

We recently began deploying Dentally integrations through CallSwitch One, which was a full API-based integration. Being able to virtually show a customer a sandbox environment with a functioning dental-specific CRM, with screen-pop working in a live demo is game-changing for us.

Being able to actually demonstrate that this is something that's been built bespoke, between our two development teams was a big win for us. It was a nice achievement to throw out there.

Other things we've been looking at, apart from the usual stuff - the big CRM names. There's a lot of bespoke estate agent CRMs out there predominantly Reapit and Street.

Showing screen-pop and other functionality within those tailored CRM solutions are a big win for us when we’re focused on a specific vertical.

So that's the kind of thing we’re looking for from TelcoSwitch. I think, continuation of what is in place and just being able to be agile.

James Lockhart: Jay, in terms of industry, verticals, are you seeing growth in any particular areas? And if so, sort of integrations wise or feature wise? Is there anything that jumps out as something that's important to you?

Jay Ball: Legal is our largest sector as a business at the moment. And then probably second is hospitality. I think with Legal; it almost always comes down to security and reliability for the platform.

Even just the basics of just ensuring 2FA is standard across all applications makes a difference to credibility in regulated industries. 

What I have found is people that we've got some suppliers who are charging for mobile applications, for example. It just doesn't work anymore. People just expect mobile apps to be included.

You know, we looked at a vehicle tracking service recently, and one of them didn't have an app, so we didn’t even bother looking at them further.

I also sometimes find that nobody really does integrations amazingly well. Making the process seamless is a big value-add. Also, people don't expect to pay for integrations, either.

Maybe the expectations of customers have gone up as well. I just think that people are expecting things to integrate and things to work like one ecosystem.

In terms of hospitality, our other major sector, it’s a pretty old school vertical. As long as you connect to their PMS, they're quite happy.

So we don't see much change in that sort of market, really, but I do think security is the big thing, you know, especially in that Legal sector. If you are going to push one thing next year, I would say, make sure the security on everything is the highest you can be.

James Lockhart: I think it's interesting what you're saying in terms of people expecting one ecosystem. Internally, it's important to us that our solutions are software-first.

We see ourselves moving forward, and we see the overall UC space as becoming more software-driven for exactly the reasons Jay said. It's about becoming part of an integrated tech stack, rather than sitting outside of that IT environment, and I guess that's reflected in all of you guys telling us that you see VoIP or UC as part of a broadening portfolio of solutions.

Andy, are there any industries you guys lean into where VoIP is a key part of your proposition, or where integrations are essential?

Andy Jamieson: Serviced offices represent around 60-65% of our business. A building that has got 100 offices, might have 100 different companies in there. That's 100 different opportunities for us.

Most of these businesses won’t have on-site IT. Support is something that we charge through our service desk.

Maybe we start by providing VoIP support for a small business, maybe connecting a phone to the Wi-Fi. Then when they need support with their printer or IT, we’re ready to support them. It’s a key in-road into beginning long term relationships with our customers.

That’s our most essential vertical market. We also provide services to the financial sector and into private healthcare. We often lead with VoIP, but it opens the door to lots of other opportunities, because by supplying a phone system, we're then talking to the customer. We're talking about their IT support.

That is certainly true in a serviced office environment where we do the shared Internet throughout the building. Those customers can't bring in their own broadband. Taking the shared internet service is part of their contract lease agreement.

In terms of integrations, we see a lot of HubSpot. It's more of a marketing tool, and when you're a small business, it's convenient because it starts out as free. Then they start charging you for additional modules.

Integration with HubSpot on CallSwitch One works really well. I was surprised how easy it was. We also see Salesforce as a key integration. In many of our serviced offices there are now big global customers taking spaces as they reduce their office space.

I think pre-pandemic it was a declining industry. Without a doubt it was stagnant. But I think Covid changed that, where people were giving up their office space because so many people were working from home and serviced offices got a new lease of life.

It became bigger companies that were letting stuff work from home. They didn't need as much office space, and we've seen a lot of business centre groups open up new locations. This year has been good for us.

James Lockhart: Aiden, are there any verticals that you have seen growth in any features or integrations that supported that growth?

Aidan McManus: Certainly. Our primary verticals at GHM are the SME marketplace and residential care sector. Within care homes, we offer a comprehensive phone system with a mobile-based solution for care staff and ensure every resident has access to a phone line.

Traditionally, care homes leaned towards a PBX on a Capex model. However, with the PSTN switch-off imminent next year, we've been discussing a shift to a hosted solution with various groups and exploring how a hosted model could be beneficial for them, some of our care groups have already made that transition.

Collaborating closely with the CallSwitch One development team, we've devised a tailored solution specifically for care homes. As a result, our pipeline for the hosted solution is robust, with a recent signing of a deal for three homes totalling 400 seats.

GHM has developed proprietary software designed for seamless integration into the Nurse Call system. This integration facilitates delivery of nurse call alerts directly to smart devices, streamlining the care team's workflow by letting them manage alerts and patient care records via a single device. This feature offers substantial flexibility to the team.

Our platform extends its functionality by enabling comprehensive reporting capabilities across all Nurse Call solutions implemented throughout the group estate. It enables importation of crucial management data, essential for the business's operational insights and oversight.

On top of that, the software integrates into the diverse care records solutions employed by the groups, fostering interactions from a resident's perspective within these systems.

Part Two of this roundtable will be released on January 11th 2024, where the discussion moves to the impact of the impending PSTN switch-off, customer expectations for the future, and projections for the evolution of VoIP and UCaaS solutions in 2024 and beyond.

To learn more about how CallSwitch One can support managed service providers of IT and telecommunications, check out our partnership opportunities, or read more of our reseller-focused blogs.