ESI Offers Guide on How Telecom Reseller Business Models Must Evolve for the Cloud Era

by | Oct 30, 2014 | Industry News

As more companies demand cloud PBX solutions, resellers must adapt their business models to meet this need.

DALLAS, Texas – October 30, 2014 – Estech Systems, Inc. (ESI), an innovative designer and manufacturer of high-performance business telephone systems and cloud services, today offered guidance on how telecommunications resellers can effectively update their business models and seamlessly add the cloud to their portfolios.

“The cloud is here to stay, and new skills and a new way of thinking are needed,” said George Platt, ESI’s chief executive officer. “To keep up, resellers must adjust their business models in a way that benefits both the reseller and customer.”

Cloud Requires a Different Business Model Traditionally, a reseller’s business model relied on upfront payment from the sale of a CPE phone system, often causing unpredictable sales cycles and inconsistent revenue. With cloud solutions, sales cycles are shorter, and the recurring payment model provides something that resellers have lacked: a steady stream of predictable income.

“A subscription-based pricing model means no more scrambling to make payroll if a down economy causes businesses to tighten their belts and cut capital expenses,” said Platt. “With this new model, the business phone system provides affordable options for businesses as well as predictable, recurring income for resellers.”

Cloud Requires Training and Trust

Before transitioning their business model into the cloud, resellers must make sure they understand the technology. The benefits are attractive, but fear and misconceptions have historically held resellers back from expanding their portfolio. Resellers sometimes fear that the technology can be difficult to understand, is unreliable or it will require new knowledge and skills to sell and install. Management of the revenue stream is also unfamiliar due to the subscription pricing model.

“To demystify the cloud, third-party vendor courses are a great place to start. Once they understand the basics, resellers need to find a partner dedicated to reseller support that they can rely on for ongoing education,” said Platt.

Resellers should look for a reputable partner with a long-standing presence in the industry. By working with an established vendor, resellers have the reassurance that, even after training, they are not alone. Resellers deserve to feel confident that the vendor has their clients’ best interests at heart and will be there for support when needed.

Bridging the Revenue Gap

The transition to a new business model takes time, but with the right planning, resellers can make the switch. By viewing cloud PBX as an addition – and not replacement – to the reseller’s portfolio, resellers can smoothly bridge their revenue gap.

To transition smoothly, resellers should begin cloud services as soon as possible so a base of recurring revenue begins to grow. The reseller should also conduct a detailed financial evaluation, and set target revenue goals each month. These target goals will provide insight into what impacts the bottom line, as well as motivation for moving forward.

Cloud and Your Bottom Line

Once the transition begins, resellers can quickly begin seeing an impact to their bottom line in two ways:

  • Reduction in Truck Rolls – After installing and training, resellers can quickly conduct troubleshooting and maintenance from their office using a web-based dashboard.
  • A New Market of Prospects – In the past, very small businesses couldn’t afford a complete on premises system. However, the cloud’s elastic pricing offers a new source of revenue, and a new market to target immediately. In addition, the advanced features like chat and presence – features previously available only to larger businesses – spark new prospects intentionally seeking a cloud PBX provider.

“The business phone industry has always been unpredictable, but cloud PBX solutions provide long-term viability and unmatched stability for resellers,” said Platt. “By rethinking their business model from the ground up and partnering with the right service provider or vendor, resellers can enter this new era with confidence.”

To help resellers update their business models, ESI released a free eBook outlining practical advice for adapting to the cloud.

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