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M5 stakes its reputation on service reliability, Hoffman said, and because its phone system is a proprietary solution, it markets itself as completely transparent about that solution. For example, there's a Web site, trust.m5net.com, where customers and partners can monitor the health of M5 services, as well as see scheduled maintenance and other potential changes, around the clock.
"Any competitor can go on this thing and say 'Look, M5 has a problem,'" he said. "But we see it as setting a standard to know where and what we're doing. We're not going to [B.S.] you."
Major outages of cloud-based services, such as what befell Amazon earlier this year, aren't always deal-breakers for customers, Hoffman said, but also don't do a lot to reassure them about the stability of the cloud model.
At the same time, he argued, the industry is heading undeniably toward the cloud -- the economics and flexibility are too attractive to ignore -- so the companies that gain respect are the ones who put their reputation behind service assurance, and own mistakes when they're made.
"When we have an outage, the good news for our VARs is that they don't have to do anything," Hoffman said.
He made an analogy between cloud computing and airplane travel: there will be crashes and difficulties, but the model itself is here to stay -- the cloud provides easier access to computing resources, just as air travel is the fastest way to cover large travel distances.
"IT departments have crashes every day that don't make two articles in The New York Times," Hoffman said, referencing the Amazon debacle. "We need to fly. Let's be real about that. We have our FAA and we have our understanding, educated consumers. This is the way it's going and we have to be prepared for it. You can't compete if you don't."'
Eric Berridge, co-founder of New York-based cloud computing consultancy Bluewolf, first encountered M5 as a customer, with Bluewolf using M5's platform for a handful of people back in 2002. Bluewolf now has about 250 employees globally and they all use the M5 system, he said.
As a solution provider, Bluewolf doesn't resell M5's hosted VoIP platform but directs M5 solutions toward customer projects on which Bluewolf consults.
"We don't get involved in tinkering around with the phone system. We come in and define what the user experience and business process is going to be, and M5 takes it from there," Berridge explained. "But one of the great things around a solution like that is it's all managed centrally. It's a very simple process and you don't have to maintain internal resources to handle it. In the M5 world, because it's all hosted, you can make changes incrementally to an entire customer base if you want."
The hosted VoIP opportunity is growing steadily thanks to greater customer acceptance of the model, Berridge said.
"As the economy has picked up, I'm seeing more and more organizations create a call center from scratch," he said "They're realizing that by going with a hosted VoIP solution, they don't have to maintain that infrastructure and don't have to work with traditional phone vendors. You are absolutely seeing it grow."
"The cloud brings a certain amount of disintermediation. You don't need to install things or ship things," Berridge added. "So that means the role of the traditional reseller has to change dramatically. The ones that are thriving in this world are the ones that are actually adding value and coming up with very individual solutions."
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