Add video conferencing to the list of technologies blazing the managed services trail.
Glowpoint has developed a suite of services around telepresence solutions that can help the user lower the total cost of owning a high-end video solution. The Hillside, N.J.-based vendor helps monitor the network to make sure the equipment is running properly as well as provide bridges, usage statistics, 24/7 help and scheduling for multipoint conferencing, according to Jonathan Brust, vice president of sales and marketing, at Glowpoint.
Many companies investing in telepresence solutions don't have the resources, or the desire, to manage the systems, a situation that creates opportunities for his company, as well as solution providers, Brust said. Early telepresence owners didn't need a lot of services because companies didn't want to invest beyond the equipment, Brust said. But that is changing as high-end video communications becomes more of a mission-critical component and companies seek to reduce travel expenses by hosting more virtual meetings.
"Now they say let's make the investment, not just in equipment, but in the whole solution. Telepresence has been a tipping point for video managed services," Brust said. "A telepresence solution might cost a company $300,000 for one room. They might have five rooms. When you make that kind of investment, you can't go to the IT department and just say it better work. The IT department will just say who knows how to do that?"
For one, a solution provider like Plus 6 Technologies in Henderson, Nev., knows how to do that. The three-year-old company recently closed a four-year video managed services deal with a beverage distributor worth $650,000 with Glowpoint. In addition, the VAR leased more than $300,000 worth of hardware and software to the same client.
"What we've found is there are a lot of organizations that don't want to buy the whole enchilada. They want to buy it by the drink," said Colin Sturtevant, CEO of Plus 6. "They're looking for more of a rental program. We are able to offer them a leasing package that gives them an operating monthly cost and can bundle in services for another monthly cost."
In some cases, clients want to own the hardware but they don't want to hire a tech support staff to manage it, Sturtevant said. "They lean back on us for the hardware management and Glowpoint for the network management," he said.
Glowpoint manages all the video networks, giving its VARs a monthly cut from the recurring payments from the end users.
About 10 percent to 15 percent of Plus 6's revenue now comes from video managed services, Sturtevant said. "We're seeing more interest in it, particularly in the current economy where capital budgets are drying up. More companies are having a hard time loosening their purse strings," he said.
Angling the solution, including leased network infrastructure equipment, as an operating expense with a monthly payment has helped, he said.
"Realistically, we look more for the SMB market for things like managed services because they're less likely to justify video as a big capital expense," he said. "Video is a bandwidth hog and no matter how robust your network is, if you deploy [video], you'll see an impact on your network. Not everyone has multimillion data networks ready for video. Until video as a technology is completely embraced, more companies aren't prepared to bring it into their own internal network."
Sturtevant's advice to VARs seeking a new solution to bring to customers is to offer a video conferencing solution with monthly payments.
"If you're shooting to get cash from customers, you're just banging your head against the wall. Asking them to explain to their shareholders to spend $300,000 as a capital expense at a time when they're laying off thousands of workers won't work," he said. If you can move it to op-ex and swap budgets for something that's already approved, like T&E budgets, it's an easily justifiable payment that becomes more efficient. You've got a win for everybody."