MARKETWATCH
www.comms-dealer.com
EXIT MATTERS...
BROADBAND
update:
By Nigel Cook, CEO of Evolution Capital
Who is best positioned to
When I was young and impressionable,
capitalise on the surge in
I had dreams of making my fortune in
the stock market: I dreamt that I would demand for MPLS networking,
become as legendary as Warren Buffet.
asks Andrew Dickinson,
It didn’t quite turn out like that but I did
learn a few useful lessons. One was that Sales & Marketing Director
the market always overreacts to both good
at Griffin Internet.
news and bad news and another was that
it pays to evaluate the Chief Executive as
thoroughly as you consider the stock.
Any industry that is young and expanding
has a buccaneering quality about it and
attracts larger than life characters. Our F
orrester’s global survey, The State of
SMB Networks and Telecommunications
2009, predicts that by the end of next
sector is no exception and one of its most year 50 per cent of SMBs will have migrated
colourful personalities is Garry Moat. As to MPLS technologies for their site-to-site
I write, Garry is on the point of stepping WAN. MPLS has traditionally been the domain
Andrew Dickinson
down as Chairman and major shareholder of the carriers, however costs to sell, serve,
of BNS Telecom on its acquisition by Daisy. price and product inflexibility limit them concept. All of the intelligence is in the Service
to around 12,000 enterprises at the very Provider’s cloud and the customer CPE can be
The deal values BNS at around £10.45m top of the pyramid. Below that, 800,000 as basic as a £20 router. Provision, configuration
and with its firm basis as a VoIP carrier, companies in the UK that have between five and management are all handled via a self-
fixed line and mobile reseller, and provider and 250 employees are struggling to find service portal which will often have features
of other value added services, such a natural home for their WAN business. that can be extended to the end customer,
as minutes, data and hardware, it will making the whole process as zero-touch for
make a valuable contribution to Daisy’s Although MPLS networks carry voice and data, the reseller as possible. Choosing a channel-
strengthening position in the reseller market. most people still refer to the corporate WAN as only white label ISP is really important because
In the fiscal ending in July last year, BNS a data network. You might think therefore that for the larger deals you will need them to be
chalked up sales of £36.9 million with the first place they would look for a supplier involved directly with your customer and you
an underlying EBITDA of £3.2 million. would be their current provider of computer don’t want to fear the deal suddenly appearing
hardware and IT support. Not so, it seems. Most on their own direct sales prospect list.
We’re seeing high levels of consolidation SMBs (and particularly those with fewer than
in the industry driven, I believe, by three 100 employees) will often first approach their Make sure they have their own MPLS network
factors. The market has reached a mature voice reseller, probably because a trusted and are not just reselling for a carrier as
level where growth has slowed, the recession relationship has been built up over many years, this will restrict your choice of networks
has squeezed corporate spending, and cuts and because many resellers have already and the double margin will often make
in public sector expenditure seem inevitable. dabbled with leased lines and Ethernet. you uncompetitive - especially if you have
dealers of your own to consider. The true
That said, the industry needs its characters The issue for many of the voice guys is that MPLS aggregator should be able to offer a
and I can’t imagine that we have said their salespeople are not used to selling such variety of Ethernet and DSL options as well as
a final farewell to Garry. I remember a high value and seemingly complex deals, branded bid and first line support, technical
few years ago on a trip to Le Mans that and they are not equipped to respond pre-sales and white label intelligent install
I asked him why he had brought his big to requests for tender or even top level options for the larger sites in the network.
four door Bentley to the Sarte racetrack. technical designs. Consequently, they are
In his inimitable Geordie accent he said, allowing the direct ISPs to get a foothold As we have seen so often in the
‘It goos 200 miles an hour and it’s got in their customer base, and since most of communications business, resellers that get in
acres of space for all my gear’. He arrived these ISPs have, or are developing, their own early with a new in-demand technology (eg,
ahead of me – and in greater comfort. hosted voice and SIP products they pose a ISDN, CPS, DSL) can rapidly grow a base of
real threat to the resellers’ future revenues. high margin recurring revenue. Half of your
If there’s ever a Bentley stretch limo, I’ll be in customers either have or are planning to buy an
the queue to ask him for a lift.
n
The reality is that many of the new aggregated MPLS IPVPN, so choose your ISP partner carefully
Agile MPLS products are really quite simple in and make sure they buy it from you.
n
CN awards open for entries www.cnawards.com
40 COMMS DEALER MARCH 2010 www.comms-dealer.com
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