New Fonality CEO Turning Focus Back On UC Channel Partners1:26 PM EST Wed. Apr. 25, 2012
The unified communications and contact center markets burst at the seams with competitors, but David Scult believes he's found a diamond in the rough in Fonality, the eight-year-old open source VoIP and UC specialist that's looking to expand its addressable market further into the cloud.
Scult, an industry veteran and former Microsoft Office 365 chief, was named Fonality's new CEO in January. He's Fonality's third CEO in as many as three years -- Dean Mansfield replaced Chris Lyman in January 2010 and exited last year -- but Scult says Fonality represents a "rare opportunity."
"It's not often you find a venture-backed company of this size, about 250 folks, that's more than six years old and is in pretty good shape," Scult told CRN in a recent interview. "At that stage, the company is usually either looking to do a reboot, and that's why they bring in a CEO, or the founder kind of took it as far as he or she could and the board says, 'you need adult supervision.' This is unique because we're on a growth path and we don't need to shake much up."
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Scult spent much of his career at early-stage companies, and also 15 years at Lotus/IBM and Microsoft. He joined Microsoft in 2005 following the software giant's acquisition of collaboration specialist Groove Networks, whose CEO at the time was future Microsoft CTO and Chief Software Architect Ray Ozzie.
Scult had been president and COO at Groove, and his most recent role at Microsoft was general manager of its Office 365 business.
"I was looking for something about this size," Scult said of Fonality. "I looked at lots of different things and Fonality stood out because it wasn't sickly and there wasn't going to be an issue with emotional ties to the founder and CEO. The management team that had run the company since last year without [Mansfield] was spectacular, and we both spent a few months doing our due diligence."
NEXT: Scult's Plans To Focus Fonality
Scult's move to Fonality comes at a time of greater acceptance for unified communications alternatives, hosted and cloud-based UC, and also for UC and contact center products rooted in the open-source community. Fonality's competitors include not only incumbent UC giants like Cisco and Avaya but also scrappier players like Digium, the best-known purveyor of Asterisk-based telephony products.
One of the first things he's looking to do, Scult said, is streamline Fonality's branding. Its various lines include Trixbox, the software-based PBX supported on the Asterisk open-source platform, its PBXtra business phone systems, and its Connect hosted solutions.
"The vision for the next six to 12 months is to bring that all together," Scult said. "We're the only provider in the industry that supports all of these different deployment models, from on premise to public cloud. So we're leaning in the direction of re-branding and trying a unified brand. Maintaining all these different brands plus our company brand is incredibly expensive, so I'd really like to double down with this integrated approach and turn up the volume in the marketplace around a unified Fonality brand."
Scult will also focus Fonality's product team on updating its core products more quickly, he said, and also make it easier for Fonality solution provider partners to buy the systems.
"I think this company was really good with technical innovation, but it didn't always rationalizing pricing, purchasing and packaging -- it seemed like that could be a little scattered," Scult said.
Fonality could stand to be a better channel steward, Scult said, adding that Fonality lost a lot of its channel focus during the transition from former CEOs Lyman to Mansfield and didn't expand its channel footprint in the way in which it needed.
"The channel has stayed pretty vibrant in spite of that misstep," he said. "That's great, because if and when we really invest in it, we can create the best role possible for the channel. One thing I learned a lot from my most recent experience at Microsoft is that you have to be clear about how the partner makes money."
"There are a lot of categories of partners we haven't tapped into -- partners, for example, who can easily attach subscription services to their traditional software businesses, or distributors who we haven't much tapped into who are looking for cloud solutions," he said.
Scult said he's pleased with the current Fonality management team and will make strategic hires only as needed.
"I like what I've inherited -- I don't have plans to bring a Microsoft mafia to Fonality," he said. "I was impressed hearing about how they really came together in their year without a CEO."
NEXT: Fonality's Channel Program Retooling
Fonality over the last year did revamp its channel program substantially, including a completely redesigned partner portal. It also unveiled the Partner Plus program, which includes a tiered structure for partners and more resources for solution providers focused on VoIP, UC and contact center customers.
"I spent a lot of time with partners over the last few months and they're really begging us to get out of our own way," Scult said. "We typically target companies between 10 and 250 employees -- that's our sweet spot. The technology can scale beyond that but we just don't have the organization or relationships with the larger integrators."
Under Partner Plus, compensation and incentives increase the higher a partner is categorized -- Platinum, Certified, Authorized -- though all partners can sell hosted and hybrid-hosted Fonality services, according to John Young, Fonality's general manager of channel operations. Beyond the Partner Plus tiers, Fonality also has a program for telecom agent partners who can build residual revenue streams and receive referral commissions.
Darlene Doherty, owner of APEX Communications, an Andover, Mass.-based solution provider, signed on with Fonality about three years ago. Traditionally a telephony reseller, APEX had been looking to expand its options with VoIP, UC and communications infrastructure and, as a former Platinum 3Com partner, had watched 3Com implode and then be sold to HP in 2010.
"We looked around at other competitive products at the time," Doherty said of her first discussions with Fonality. "We were blown away and the price point was low, so we took a leap of faith. You go back to when VoIP was first getting started, that was an exciting time at 3Com back then. A lot of that same type of excitement is really evident in the Fonality platform, and it's easy to use."
Fonality is best suited to SMB customers, Doherty said, but also for customers north of 1,000 users, in which the users are heavily distributed with multiple branches needing connectivity options. Its first few Fonality installs were a challenge, Doherty said, but Fonality's team was strong on support from the get-go.
"One of our major customers, Honeywell, broke off a subdivision and I was in there up against Cisco and Avaya," Doherty said. "They took a leap of faith and said we've never heard of Fonality but we're willing to talk. They went with it."
Most of APEX's customers in the 50-to-150 user bracket are looking at hybrid-hosted models for UC deployment -- what Doherty described as "one server, and most everything else in the cloud."
Doherty met with Scult early into his appointment, she said.
"He has made himself available, and you don't get that everywhere. He's a breath of fresh air, and he clearly sees value in having the channel in partnership," she said. "We're working with them on a way for us to share leads and do integration locally. I think there's a good opportunity for dialogue with partners."