Avaya Cloud Solution Resellers
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“Avaya IP Office is more than selling a phone system – it has opened doors to sell other products.”
—Marcelo Vilas, Owner and President, Anikos Technologies
RESELLERS INCREASE SALES – AND COMPANY VALUE – WITH CLOUD-BASED OFFERINGS
Avaya Partners Create Recurring Revenue Streams with Cloud-based Avaya IP Office™ Option
Avaya partners watch the IT landscape change rapidly and seize upon new opportunities. As their customers lean toward cloud-based solutions to replace legacy systems or implement new technologies, partners search for ways to ensure selling cloud solutions remains as profitable as offering on-premise technology. For three Avaya partners, from a small three-person shop to a larger regional distributor with multiple locations, the writing on the wall indicated one thing: selling cloud-based telephony would be key to their future success. Until recently, most early options didn’t provide the full feature set required for an enterprise-grade solution, making it difficult to add a cloud-based offering to their portfolios.
However, these Avaya partners already offered Avaya IP Office to their customers. As customers contemplated upgrades, they began asking for cloud-based solutions to mitigate costs. Additionally, small businesses that can’t stomach the price tag attached to large enterprise solutions presented a promising new market for Avaya partners, if they were able to offer a cloud-based product.
“Technology is moving quickly,” notes Jim Carter, Partner at Affiliated Communications, with locations throughout Texas. His customers face challenges keeping up with it, and not just buying new products. They also need to maintain and grow their solutions with the business. Avaya’s Powered By IP Office, the cloud-based version of IP Office, can allow them to do that. “Anyone under 100 seats is looking at the cloud,” he observes.
- Provide a cloud-based phone product to meet customer demand
- Create new business opportunities
- Recurring monthly revenue streams
- New market opportunities
- More opportunity for upselling
- Enhanced credibility
Familiarity Provides Inroads
For Avaya partners, having the name recognition helps them sell Powered By IP Office to new and existing customers. At Anikos, a three-person partner in West Palm Beach, FL, Avaya IP Office has been one of its core offerings for almost 15 years. Offering a cloud-based version serves as an extension of what Anikos already provides to its customers, without requiring employees to attend new training courses.
“I’d rather sell something I really know and use than anything else,” says Marcelo Vilas, owner and president of Anikos. Powered By IP Office fits the bill perfectly, as it is already a solution familiar to Vilas and his team. “Avaya IP Office is the only phone system I resell right now – I can go up to 3,000 extensions, which allows me to serve more customers.”
Additionally, offering Powered By IP Office comes with Avaya’s built-in name recognition and reputation. Customers find Anikos by searching for Avaya partners, and Anikos benefits from Avaya’s support when needed, including engineering support if Anikos’ technicians can’t solve a problem. Avaya provides a healthy funnel of leads for Anikos, more so than any of its other technology partners. Additionally, out-of-state Avaya partners will contact Anikos to implement solutions for their Florida clients.
“Having Avaya’s name behind us makes my company more trustworthy for any new customer or existing customer,” Vilas says.
Powered By IP Office was the right solution set for DJJ Technologies, which is headquartered in Islandia, NY, operates satellite locations in NYC, Arizona, and Florida, and serves 5,000+ SMBs and enterprise customers, to offer because of the internal familiarity with the product, according to Ed Dolan, Executive Vice President.
“Our sales team is comfortable selling Avaya solutions to customers,” he notes. “Once we identified Avaya IP Office as being the right product for the customer, we could ask them how they wanted to deploy it and didn’t have to train more people around the solution set.” This saved time and money for DJJ.
New Opportunities with SMBs
Powered By IP Office also allows partners to reach a new market – small businesses that don’t need or can’t afford an on-premises IP Office deployment but would benefit from the features and functionality. When Anikos’s Vilas investigated Powered By IP Office, he found that it provided an enterprise solution for his smaller customers who didn’t have the infrastructure or need to install on-site phone systems. His technicians are already trained on Avaya IP Office, and Anikos would be able to cover all the needs of its customers requesting cloud-based telecommunications. In fact, Vilas chose Powered By IP Office to meet the needs of his own company; he has an installation in the main West Palm Beach, FL office as well as his satellite office in Vero Beach, FL an hour away.
Additionally, IP Office also can be deployed in a hybrid cloud model. This makes it easier to sell since most customers are faced with the choice of a limited set of features if they select a hosted model or having to go all-in on premise. It also provides a failover plan. As a larger company, DJJ is able to offer several types of IP Office deployments: in a DJJ-hosted cloud, through a distributor, or through Avaya.
Transforming Business Models
Like most MSPs, Affiliated, Anikos, and DJJ traditionally generated revenue from selling on-premise technology and support services. However, selling Powered By IP Office means they’ve had to shift their model and create a recurring revenue stream that isn’t based on the maintenance contract. On one hand, this has created a predictable revenue stream that doesn’t depend on whether the customer signs a maintenance contract. But that also means not collecting the full purchase price out front, which may seem like a daunting proposition for some.
For Anikos, the new business model has introduced predictability into its revenue stream. Previously, Anikos would sell hardware to a customer and possibly contract with the customer for maintenance. Now, maintenance is a given, and Anikos often can add on maintenance for phone systems as well as for IP Office. While it’s less money paid to the company up front, it does carry value for the company. For example, should Vilas ever decide to sell the company, having recurring revenue streams makes it more valuable to a potential buyer. And, of course, there’s the predictability for budgeting purposes.
“For me, having recurring revenue allows me to predict how much profit I’ll clear in a certain month,” Vilas notes. “Avaya IP Office is more than selling a phone system – it has opened doors to sell other products.”
Additionally, Anikos forges better relationships with its customers by entering into these monthly service agreements. Whereas before customers would purchase solutions as a one-off, being in monthly contact with its customers allows Anikos to offer improvements and upsells, like up-to-date firewall or network equipment. The customer already trusts Anikos, and the company can offer its expertise. Additionally, customers that already use Anikos for maintenance will call the company if they suspect a new solution is needed.
Revenue anxiety isn’t an issue for DJJ with the cloud sales model. “When you look at the full-blown financial models of what the total contract is against the one-time sale up front, it makes it much more palatable,” Dolan says. Powered By IP Office provides a more profit-rich return on investment and helps the company keep customers for life because they work so closely with the customers for the duration of the contract, which can be 36 months. As is the case with Anikos, customers start asking about WAN upgrades, presenting new opportunities.
Affiliated already has 10,000 users on Powered By Avaya and had started the process of selling cloud services five years ago. The company is nearing its inflection point. Instead of selling a $10,000 system in a one-shot deal, Affiliated can sell Powered By IP Office for $100 per month for 36 months, for example, which has a positive effect on revenue due to its recurring nature, Carter notes. This figure multiplies and translates into more revenue, not less, for resellers, he added. The impact that recurring revenue has on EBITA is a 12 percent NDP on equipment sales and 18 percent NDP on cloud sales.
“As the technology momentum keeps moving and more people go to the cloud, we’ll have customers and references and beat out the competition that is still trying to understand VoIP.”
-Jim Carter, Partner at Affiliated Communications
Honing Its Competitive Edge
Meanwhile, Affiliated is using cloud-based solutions to edge out its competition. As an established company, Carter saw the writing on the wall years ago, and the introduction of IP Office in the cloud provided another way to offer customers what they wanted. But it also provided something its competition, consisting of MSPs selling solutions on-premise, hadn’t leveraged.
“As the technology momentum keeps moving and more people go to the cloud, we’ll have customers and references and beat out the competition that is still trying to understand VoIP,” Carter says.
A Customer Win with Cloud-Based Solutions
While DJJ doesn’t have quantifiable revenue numbers yet, Dolan knows that the company was able to land a sizeable account with a school district because it could offer Powered By IP Office. “We wouldn’t have gotten that sale if we only offered an on-premise based option for telephony,” he says.
For these three Avaya partners, adjusting to a new model of selling is already showing signs of being more lucrative than offering on-premis es solutions alone. As customers continue to look to the cloud to save money and scale upward, partners that offer Powered By IP Office will continue to have an edge, creating recurring revenue streams and finding new market opportunities.
“Our sales team is comfortable selling Avaya solutions to customers. Once we identified Avaya IP Office as being the right product for the customer, we could ask them how they wanted to deploy it and didn’t have to train more people around the solution set.”
—Ed Dolan, Executive VP, DJJ Technologies
About Affiliated Communications
Affiliated Communications was founded in 1984 to provide service and support for customers’ voice communication needs. Since then, Affiliated has grown into a premiere communications distributor with offices in Dallas/Fort Worth, Austin, and Houston. It assists customers in planning, design, integration, and installation of voice and data communication products. Affiliated installs and maintains these applications with a highly skilled, manufacturer-certified workforce to provide a great and professional customer experience.
About Anikos Technologies
Anikos Technologies serves the technology needs of small to mid-sized businesses located in West Palm Beach, Florida and the surrounding Broward County and Martin County communities. Founded by Marcelo Vilas, a systems engineer and current president of Anikos Technologies, the company is dedicated to providing all of its customers with personalized service. Anikos has built a solid reputation for expertise, reliability, and commitment to service and provides small and medium-sized businesses with affordable IT services as well as helping them develop business continuity and disaster recovery plans.
About DJJ Technologies
Since 1992, DJJ Technologies has proven to be the premier full-service provider of voice, video, data and sales, installation and support services because DJJ knows one size or solution does not fit all. DJJ Technologies understands that every company’s and organization’s wants and needs are uniquely different, spanning across the small, medium and enterprise markets, including all industry verticals, so you won’t find any cookie cutter solutions from DJJ Technologies. Every DJJ client is special and is treated with the special attention they deserve by highly skilled and qualified staff, sales and expert support teams that provide businesses with comprehensive integrated solutions, superior service, and quality products they expect and deserve.