Comms Business Live S4Ep6
DAVID GUNGAY [00:02:01] Welcome to Comms Business Live. My name’s David Dungay, editor of Comms Business magazine. And today we’re here to talk about the opportunity which surrounds Microsoft teams. I have with me an expert panel. Let’s do some introductions at the far end we’ve got Adrian Sunderland from Jola, Lucy Green from Larato getting there. I’m gonna get this right we’ve got Gareth Long from DWX Digital Wholesale Solutions. We’ve got Richard Carver from Call2Teams. Welcome. Shall we all go around the room and just tell everyone who we are and what we do.
ADRIAN SUNDERLAND [00:02:32] I’m Adrian Sunderland. I’m the CTO Jola Cloud Solutions and we are a channel only supplier of telecoms and cloud services.
DAVID GUNGAY [00:02:44] Lovely, Lucy.
LUCY GREEN [00:02:44] I’m Lucy Green, MD at Larato. We are a B2B business development company working with tech firms to help make their go to market more productive.
DAVID GUNGAY [00:02:55] Lovely, Gareth.
GARETH LONG [00:02:57] I’m Gareth long, I’m head of cloud services for DWS, formerly Daisy. My core job is to bring new I.T voice products to market.
RICHARD CARVER [00:03:07] I’m Richard Carver, CTO of Call2Teams, we have a global cloud service that facilitates direct routing by letting customers keep their phone system and use Microsoft teams.
DAVID GUNGAY [00:03:22] Well, welcome all to the show. To my audience, if you have any questions for my expert panel, please tweet them using the CB Live 19 hashtag, that’s CB Live 19. So Microsoft teams 13 million weekly users. What do we think about this? They’ve overtaken the slack in the last couple of months. The biggest collaboration piece of software out there right now. The decision to integrate that into the 365 bundle, was that inevitable all along? Lucy, what do you think?
LUCY GREEN [00:03:53] I think so. Yeah. I think this is where it’s been heading for quite a long time and and rightfully so. I think a few years ago we started saying work is a place you can work is something you do rather than somewhere you go. And that has really sort of gained traction now. So the way that we’re working is changing. And so having a collaboration platform that connects in to Office 365, which has got something like a hundred eighty million users, I think they said earlier this year, it just makes a lot of sense and it aligns with the way that work is changing. So, you know, we’re moving away from a departmental based organisation to a more teams based way of working. And I think this piece of software basically reflects that.
DAVID GUNGAY [00:04:39] 180 million users, 13 million weekly users as well. Adrian, that’s big numbers in a short space of time.
ADRIAN SUNDERLAND [00:04:48] Is absolutely huge. And I think Office 365 is by far and away the most widely used cloud productivity platform in businesses. 91 out of the biggest 200 companies use Office 365, which is tremendous. And I think if you look at it from the I.T. perspective, for years now within companies, people have been using WhatsApp here or Facebook Messenger or Skype here. And there’s been all these little little collaboration teams based around social media platforms on the public cloud and Microsoft have just handed them this enterprise ready collaboration tool and included in the licence fee. You know, you don’t have to pay for these things. Just you’re paying for 365 have this. And it’s not surprising that it’s been adopted and deployed so widely.
DAVID GUNGAY [00:05:37] Okay. So what business is getting out of this Microsoft teams? Obviously they’ve got this free tier, which you spoke about then. This is really going directly after that WhatsApp free user market, isn’t it? What do we think Richard?
RICHARD CARVER [00:05:51] I think It’s going after collaboration as Slack was a big worry for Microsoft and they’ve over taken now. I think also Microsoft have got all these products in the 365 bundle that most customers don’t use and teams give you a unified desktop application that lets you get to them all. So from Microsoft’s point of view, they’re actually making customers more use, more applications, and it’s harder for them to leave.
DAVID GUNGAY [00:06:16] Okay, let’s talk about channel partners. That’s what we’re here to do. I mean, being part of that Microsoft ecosystem, is that going to become an absolute must for partners what do you think? Gareth.
GARETH LONG [00:06:26] Yeah, I think moving forward, if they’re not a part of it, you are going to lose spend and share. The reason being is we know that we want to consume instantly and Microsoft have that environment there on scale to consume us when you want buy demand. So yeah. We’ve got to get our partners to be apart that we’ve got to make it simple for them. One of the biggest learnings when you look at the ecosystem or Microsoft offer is how complex it is. And I think that’s a challenge as well as DWS when we try and take things to the market for the channel, but the channel, as well as a huge amount of upskilling and development that will need to take place. So it will become central to most businesses.
LUCY GREEN [00:07:11] I’d like to add to that, if that’s okay. That I think I think you’re absolutely right. But I think there is potentially sort of more understanding within a company that uses Microsoft already. So, you know, if you introducing a new so say you rolling out teams in an organisation, people expect that there are going to be hiccups and that they’re used to dealing with Microsoft. And Microsoft does things at its own pace because it’s so big. And so there is an expectation, I think, that that it won’t necessarily be a smooth journey and an a tolerance of that, which I think is healthy. I was talking to a gentleman who’d gone to a big Microsoft conference in London a couple of weeks ago. And he was he was listening to an I.T director of a large global organisation. They rolled out 58000 seats and they they’d had anticipated some glitches and they’d got them. But there was a tolerance that that’s the way it happens. And I think that offers an opportunity for the channel partners to offer additional services like training, etc, etc. But also the environment, I think is is potentially slightly more relaxed.
DAVID GUNGAY [00:08:30] We’ve got a question from Twitter here. Maxwell Jones, thank you very much for watching. Microsoft had a tendency in the past to charge more for parn spla than they do going direct. I’ve been burned. Is this better now? Well, to take that one.
ADRIAN SUNDERLAND [00:08:49] So it’s a different licencing model to start with. So the Microsoft partner, most types of partners will get their licences from a distributor of Microsoft CSP and those all those distributors have a price list, which is based on the Microsoft selling price and then less a discount. So you would expect that because everything’s discounted from the Microsoft selling price. There isn’t the opportunity for Microsoft to make make this unattractive for partners.
DAVID GUNGAY [00:09:26] Is that a common misconception in the market that Microsoft has always been that, you know, that big bad vendor is going to come and eat all the partners up and it has come none left for the for the channel community, are we past those days now?
ADRIAN SUNDERLAND [00:09:40] Now, I think there’s a natural fear with any large vendor, but in reality, the Microsoft partner program is probably the largest partner program. It’s the envy of many other vendors, you know. You know, many vendors wish they had the engagement that Microsoft gets from their partners. So I think Microsoft needs partners. And it would be foolish to to go around them.
DAVID GUNGAY [00:10:07] Yeah. Okay. I want to pick up on something you just said there, Lucy, about the forgiveness of end users in that Microsoft journey. I mean, how significant is is that going to be as we go through this transition?
LUCY GREEN [00:10:18] Well, I think there is an established understanding that, you know, if there are issues with, you know, a part of teams say, for example, there have been well publicised issues about the auto attendant and that, you know, Microsoft will fix it, but Microsoft will fix it as part of a program of change that they’re managing across the whole platform. And so that’s the way it’s been for years, basically. And I think that’s that’s what I was trying to say, is that there is that understanding there already in the marketplace so that if you are deploying voice on teams, you know, PSTN type voice on teams, expect to have some challenges, expect to have some issues. And and Microsoft will deal with them in the way that Microsoft deals with change. So and companies get that. I.T People get that. They’re used to it. And I think, you know, that’s a that’s a good thing.
GARETH LONG [00:11:20] Just to add to that, I think the channel itself is more adapt now with the transition from IOCN to IP. We see more issues in the IP space. And we definitely historically you’ve seen outages, software bugs over time. The whole channels have to adapt to that way of working. So I think you’re absolutely right. We are more accepting as a community where if you go back seven years when I first started myself, Everyone would be jumping up and down. But as we’ve moved into an IP journey, not just a Microsoft journey, we’re acceptaning software isn’t the quick fix, that sending a man in a van with a spanner with a new box to replace I do think is a good learning now that we’ve already started to appreciate the software as we go into the future is going to be a slightly different beast to fix.
DAVID GUNGAY [00:12:05] A bit of a perfect storm and for the channel. Okay, so let’s talk about value for partners now where we’re going to be the major areas where they can extract value out of these out of the team’s proposition. Richard, What do you think?
RICHARD CARVER [00:12:18] I think there’s three main areas. I think it’s in the deployment. So project management, migration training to get them up and running with it. And then Microsoft will always push their partners to add value to the monthly bill. So they’ve always push the monthly bill should part of it should be Microsoft. You should be out the recipe connectivity of business applications around there. And then the third area, I think is it’s quite new, but potentially significant is with Microsoft power apps and Microsoft flow. These are tools that let you essentially do automation in your business without having to hire any developers. It’s drag and drop. And I think that’s a real key area where some of the partners who are really looking ahead channel partners will start to invest in those.
DAVID GUNGAY [00:13:05] Yeah, okay. What do we think? You agree with that Adrian?
ADRIAN SUNDERLAND [00:13:08] Absolutely. I think the know the opportunity to make margin on the licence itself, if you’re just taking a Microsoft licence and reselling it to a customer, you’re looking at margins of around 15 percent. But Office 365 now contains dozens and dozens of applications. And somebody’s just going and buying a licence off the Microsoft Web site and trying to then say we’ll have, you know, just DIY deploying that within an organisation is not going to get the greatest experience. And that’s where a partner can add tremendous value, particularly teams. You know, we’ve just rolled out teams over the last few months internally and. It’s been a real learning curve to me to tailor it to work within within our organisation, and I think partners can justifiably providing they’ve got the skills they need to invest in those skills, but they’ve got those skills they can justifiably charge for that project management and deployment and that extra level of support above and beyond just sending people to Microsoft.
DAVID GUNGAY [00:14:11] Okay. We’ve got another question from Twitter, from cloud comparison. Thank you very much for watching. As a partner, should I include support to my clients or include it as a value add Garath? Do you want to take that one.
GARETH LONG [00:14:25] There’s no right answer to this one. You should charge for support. I think one of the great things about, especially from a if you’re a traditional voice reseller, is with hostage you’ve lost some of that ability and some of that support spent. I think what most of those actually give you it back. If you look at a traditional I.T. company, they charge for support. And I think for a specifically for a voice partner, they need to realise that revenue is kind of turned back on together. So slightly to offer that support, though, there’s a cost to that. There’s a cost here for you as a partner to do that. There’s a lot of upskilling to be able to offer the right support. But, yes, it’s a chargeable service. You should be able to offer and should be offering. That should be full backcourt.
LUCY GREEN [00:15:10] And its value added, I mean, there’s this two ways, really. I think organisations are adopting teams. One is here it is, you know, go play and you’ll get change organically and it will be a bit chaotic or to understand how you want your business to work ahead of deploying teams and then rolls out whichever way you look at it, a partner with experience of teams, deployments across different types of businesses. He’s going to have a huge amount of value to add. And I absolutely agree with you. Should be should be charging for it.
DAVID GUNGAY [00:15:46] Presumably getting the adoption high within an organisation. In the organisation. Sorry, is I’m a pretty simple task as well, because it’s all, you know.
LUCY GREEN [00:15:56] No, no, no It’s not because because if you’re if you’re a worker and you’re used to using I did voip and email and you’re happy with Voip and email, then that’s great. Why should I change? If if if I’m comfortable with the communications channels that I used on a daily basis, I might not see the added value of adding all these other different ways of communicating with people. And so it isn’t. And it’s a really easy mistake to make because you look at teams, it’s easy to use and you know, you plug and play basically. But you make an assumption that people are ready to take it all on. I think at your peril, really. And and that’s you know, that’s where a lot of the resistance comes from.
DAVID GUNGAY [00:16:40] Interesting. We all agree with that statement.
ADRIAN SUNDERLAND [00:16:42] I think I think Lucy’s is right to make the statement. I was at an event with Microsoft recently, and it was interesting because one of the slides they presented was all about the demographic of the team’s user base. And they were making the case that actually there’s four or five generations that are using teams. But it was a big thing for them to be able to say, you know, when they develop this product, they’ve been developing it with that in mind and going, actually, this has to work for the, you know, the the teen age social media addict and it has to work for the person is nearing retirement. That’s perfectly happy with the slide rule and not just the funky millennial. Yeah. So I think they they put a lot of thought into into making that adoption easier. I mean, is it is it has become their fastest deploy product ever in the history of Microsoft.
GARETH LONG [00:17:27] I think anything is just on the platform adoption of how you add value is it’s going to be different the way you sell Microsoft and to your end user customers, it will be more a five or six touch sales process. So you might go in on day one don’t they want your team to go by teams for me? Brilliant. Those were 15 percent margin, but you might go back in six months because in that conversation you’ll start talking about SharePoint or Dynamics 3, 6, 5, and it’s no longer just about getting in selling the phone system and seeing them in three or four years time is all about this now continual evolution of constantly talking to them. So I think you’ll find a lot that’s kind of hunter salespeople in the channel and you will have to go out and build some good relationship farmers that can leverage those relationships and time it right. IT team manager If you go back to it an end user IT manager, you give him a big project of integrating teams into his business and say, how about I move all your storage from your servers at the same time he’s gonna cry and that also then help drive the adoption, because if you go in and say, here’s a load of new stuff, some people are going to go, can’t use a word and they’re going to have a complete meltdown where if you do that, gradual integration of teams first dynamics 3, 6, 5 second, SharePoint third you will continually build that relationship.
DAVID GUNGAY [00:18:44] Right. Let’s get on to direct routing. Entering the last third of the conversation here, we haven’t even touched on it properly. So let’s firstly let’s outline what is the proposition? What is the direct rating proposition for partners? Richard, give us give us your take on that,.
RICHARD CARVER [00:19:00] Okay. well, if I start with not direct routing, but Microsoft calling plan. So this is this is how marks of start out. You as a team’s user can go and buy a phone number and minutes from Microsoft and that 100 percent Microsoft. So where direct routing comes in is it allows the customer to bring their own lines and minutes into Microsoft teams without having to give everything to Microsoft. So it’s the same user experience, but keep your keeping as a customer. Ownership of your own numbers and minutes downside. I think with that is also you have to give it your phone system, which a lot of people have got very feature rich phone systems. They using call recording that using call centres and Microsoft would have to shift everything to teams and teams is still fairly immature in that way. That is where. So potentially people might be suffering on a feature set for I think I think it’s a big challenge for Microsoft with this still some early adopters, but that’s a big challenge because actually when my company Calls2Teams has come in because we do allow the customer to keep the phone system and plum that into Microsoft. So we’re helping teams adoption.
DAVID GUNGAY [00:20:10] Okay. Adrian. Direct routing for the channels. Obviously bringing your own lines and calls into the scenario is quite it’s pretty pretty big right?
ADRIAN SUNDERLAND [00:20:19] Is absolutely game changing, I think, for the channel. The thing with the mix of calling plans and Microsoft billing, the minutes that Richard was talking about was that there’s no opportunity for the channel to make margin out of that because it’s an add on licence. It’s not something that you buy upfront the out of bundle calls. So the simplest way to do it is simply to say, well, just pay for my calls out to bundle calls have to be prepaid. So the business has to load up with their company credit card. You know, it’s I mean, it’s just not an enterprise ready solution. And and ignite the big Microsoft partner event in Orlando. Last year, Microsoft announced direct routing for teams and very much were making the point that they see that teams. One of the things that’s holding back teams as an enterprise voice platform is the inflexibility and the restrictions and the geographic limited availability of Microsoft’s own calling plans. And so they said we can open it up. We’re going to work with. We’re going to stop trying to be a telco. We’re going to work with telecom service providers. And we think that’s going to unlock the potential of that platform. And I completely agree, because with Direct routing now a partner can it may well be the partners already selling ISDN lines or SIP trunks to a PBX. The businesses got to the point where it’s the right thing to do is to get rid of ISDN. The right thing to do is to get it to the PBX. And now with direct routing, you can simply port those numbers across, use it with teams and give everybody know if the organisation has already deployed teams and a raving fans of teams. And then you unlock voice calling. Actually, your DDI is on teams now and you ought to attend and anything can call centre isn’t your voice is then. It’s it’s it’s a win win. And that’s been impossible for the channel to do until the advent of direct routing.
DAVID GUNGAY [00:22:13] So the big question then, is this going to be a market killer? It’s a lot of host of voice providers out in us in our space. So many hundred of them, you know, is teams going to come in and dominate. What’s it? What do we think Gareth?
GARETH LONG [00:22:26] Yes. Is the short answer. In the longer term, yes, absolutely. I think Adrian summed up or mentioned at this, five generations in the workforce at this moment in time, you’ve got I separated them in a document i did for my business recently into two, which is millennial and premillennial. Sorry for the buzz words. And you look at the users of what they want. And today you’ve got the premillennial, who still wants a telephone system and teams are great at that today. So it’s not like tomorrow you’re going to wake up and everyone is using teams, but over the next three to seven years, there will be a huge transition. Phone systems, as we know, become the niche rather than the mainstream. So that’s kind of where we’re headed.
ADRIAN SUNDERLAND [00:23:12] There’s no reason why it shouldn’t be. It has the potential to be a market killer. Absolutely. The I used team’s voice and I find my experience, the functionality and the usability of the teams client, whether it’s on my desktop or whether it’s on the mobile phone, is better than any traditional UC mobile client or UC desktop client that I’ve ever used. The challenge we’ve got at the moment is the licencing costs. So direct routing service providers like Jola and others can provide direct routing, It’s a very cost effective cost competitive with hosted solution for the PSTN calling. The problem is to take advantage of it. You have to have a Microsoft phone system licence, which is an add on licence for Office 365. Ninety five percent of all the subscribers in the UK subscribe to Office 365 on something called the Office 365 business premium. You can’t add a phone system licence to Office 365 business premium. The first licence that you can. Is the Microsoft E3 licence. So the business premium licence is £9.40. The E3 licences £17.60. So you’ve got an £8 jump in licence cost. And then you’ve got £6 for a phone system. You getting to this stage now £14 before you’ve even made a telephone call. That’s not looking that competitive with hosted. I mean, it’s a good enterprise grade hosted platform. A broad soft type platform might be at 10 or 12 pounds a month, including all you can eat minutes. So I think at the moment, all the traction we’re seeing with our customers are those enterprises typically larger. They’ve already got hundreds of E3 licences deployed. And for them, it’s like, yes, actually this is really compelling and they’re lapping it up. But that’s the 5 percent, the 95 percent. We need to see a shift in Microsoft’s licencing and pricing, I think. And then we could. And then at that stage, if you’ve already deployed teams, I think it’s it’s going to be 20 months or so.
GARETH LONG [00:25:17] They know where there weaknesses are for each set. I think they know we tell them, the Channel tells them, we feedback into them that where the weaknesses are in terms of the licencing, as Adrian just pointed out offering if much of want to open the channel in the space, then they will make the changes.
LUCY GREEN [00:25:35] You would expect. I mean, you know, those that 95 percent are not going to automatically upsell themselves from a, you know, buy by 14 quid. And so but then it’s in Microsoft’s hands then, isn’t it, to readjust the pricing and a way you go.
GARETH LONG [00:25:51] It’s interesting you say that because we talked about 14 quid. I think the price is actually closer to two. By the time you do the uplift of licences and then you assume you’ve got a telephone system over here with ISDN channels and probably a POE switch your cupboard and various other bits and components, actually by the time you figure out is two pounds. This is an argument that it says is the value worth natural two quit and some people will absolutely buy it. Yeah, some people go. Well, actually I want a phone system that’s got hung group and autotendant and I don’t want to pay an extra two pounds to use it because that’s going to add up to my business. But I absolutely do think that it’s going to change.
DAVID GUNGAY [00:26:29] Okay. So we’ve got a question from Twitter. John, thank you for watching. Long longtime watcher, first time caller. If my client is regulated e.g. FCA or financial, etc., is there an opportunity with teams who wants to take this one?
ADRIAN SUNDERLAND [00:26:46] I think within teams itself. So on the using teams is obviously a mixture of all kinds different things. Chat and text based chat. Voice chat. Video chat. So within teams you have regulatory approved retention for those. So for those text communications, they are all it’s possible for them to be retained and securely retained from an evidential regulatory point of view. However, that does not apply to voice today. So if you do so within teams, the voice calls won’t be so. The PSTN calls will not be retained within that archive. However, that’s where third party providers come in. That’s of the beauties of direct routing because with the recruiting, the PSTN and all that. But those voice calls are coming out into the service providers network. So if the service provider can provide a regulatory approved call recording solution, then that call recording solution will apply can be applied to teams.
DAVID GUNGAY [00:27:42] Sure. Okay. Right. We’re coming very near towards the end of the show. I want to give our audience some practical advice. If they’re selling Microsoft already or perhaps looking to get into this space. What would you what kind of advice would you give a partner? Richard, give us your a couple of top tips from apartments.
RICHARD CARVER [00:28:02] I think you’re just absolutely got to include other services. And when we talked earlier about selling support, that’s a lot easier when you’re selling a bundle of services where Microsoft is a part of it.
DAVID GUNGAY [00:28:16] Adrian whats your top tip.
ADRIAN SUNDERLAND [00:28:19] If you’re not using teams already in-house, then I’d certainly used teams, you know, actually try it yourself using in-house and see if it transforms your business. It’s much easier to go and sell that to your customers.
DAVID GUNGAY [00:28:30] Free tier. Try it out. There you go. Lucy, what’s your top tip?
LUCY GREEN [00:28:35] Go and talk to your customers because, you know, they’ll be interested in what’s happening. It’s an opportunity to upsell and potentially also protect your your customer base.
GARETH LONG [00:28:45] I Think the big one is upgrade your skill sets of your People, if you haven’t already. I think no matter what angle we look at this from Microsoft is a beast to get your head round and you need more than one person that’s a good expert. So how you upskill your people and that will be a three year process, unfortunately. Looking at some of the stuff that microsoft turn out, but that will be key before you have a great conversation with anyone you need to know what you are talking about.
DAVID GUNGAY [00:29:09] Big investment. though no?
GARETH LONG [00:29:11] Yeah. Big investment for a big return. And I think I had a conversation with someone the other day. And the fundamentals of it is if we want a business in five years, then you’re going to need to start making that investment now. You know and you don’t have to do it all over night. keep selling what you sell today. Keep selling your hosted seats because it’s not going to I know I made the statements that teams is going to dominate at some point, but there’s still a window. It’s a bit like the switch off from ISDN to IP. It’s not going to happen instantaneously. So invest in your people, have a strategy for the next three to five years. That’s where you want to be. Because it’s going to add value to your business. It’s really hard to find those qualified people at this moment in time. So you’re going to have to invest anyway. There they’re very few and far between in the UK at this moment in time.
DAVID GUNGAY [00:29:56] Right. Okay. So we’re at the end of the session. I’d like to thank my guests for joining me. Thank you very much. And thank you for watching. Don’t forget, if you are in Birmingham, you should be next week, channel live 11th and 12th of September. The channel is the biggest channel event of the entire year. Make sure you get yourself along. We’ll be talking about Microsoft of teams amongst all kinds of other subjects and it’s gonna be great. So make sure you get yourself long. The website is Channel Hyphen Live.uk. You can sign up there. It’s free for channel partners. So come along. My name is David Dungay Thank you very much for watching.