A Unified Communications Business Is An Opportunity, And A Defensive Play

The Unified-Communications-as-a-Service market is expanding at 21.7 percent annually, presenting a massive business opportunity for solution providers to help SMBs with their communications and collaboration needs, according to Jonathan McCormick, chief operating officer for UCaaS provider Intermedia.

Solution providers should think about building a successful unified communications business as a big opportunity, but also a defensive play, McCormick said.

That's because businesses often buy UC services from the vendor or solution provider that gets to them first. It's a sticky offering, and customers often stick with that provider for the length of the contract, if not longer, he said.

"This is an opportunity. Someone is going to be in there selling these services. If it's not you, then it's another provider," McCormick told an audience of MSPs at The Channel Company's NexGen 2018 Conference and Expo Monday.

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McCormick highlighted Intermedia's Unite platform that in its most simple form is a business-class phone system. But the platform also includes videoconferencing, screen sharing, disaster recovery and a fully integrated mobile client.

The Unite platform is seeing growth of 30 percent to 35 percent year over year, McCormick said, and it's a great product that can help MSPs dip their toe into the UC market.

For customers that have legacy phone systems that are on the way out, MSPs should be encouraging companies to replace these systems with products that can offer mobility and disaster recovery, McCormick said.

"I think Intermedia has the right mix of collaboration features, and it's smart to approach [MSPs] with this offering because these partners aren't going to build these kinds of solutions," said Stelios Valavanis, CEO of onShore Security, a Chicago-based MSP.

onShore Security used to provide cloud-based UC services for years before the business became focused on managed security, and onShore still has several legacy customers on its hosted PBX solution.

"I think the midmarket should seriously look at solutions like Unite," Valavanis said.

Intermedia's goal is to make it as easy as possible for solution providers to partner with the company, even for those that have never sold UC before, McCormick said. As such, Intermedia offers two ways in which solution providers can partner with it: an agent model that lets partners sell Intermedia's solutions while offloading billing to Intermedia and receiving a commission for each sale or a private-label model that lets partners set prices, bundle, and bill their end customers directly.

Private-label partners are earning margins between 40 percent and 50 percent, he said.

"It's a really great way to build a profitable UC business," McCormick said.