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There are four parts to marketing that we learned in Marketing 101. They are called the four P’s.
Price. Product. Promotion and Place.
As long as I’ve been working in technology, one of the most misunderstood and weakest areas of effort is place. And place = distribution and distribution = sales. Many companies in technology today think that sales is all about the web site.
Well in technology sales two companies that sell better in the business verticals than anyone are Cisco and DELL. Cisco routers are the staple of the industry, while Dell servers power more cloud, email and web sites than likely any other box, regardless of whether they are running Windows or Linux. In essence Dell and Cisco understood from the very start about owning the channels of distribution, and in turn about owning their markets. Microsoft knows this too, as does Apple. In the case of Apple it’s almost all Direct with mobile operators and some very hand picked retailers.
But if you don’t know your channels and don’t have a channel strategy, you won’t succeed.
Now lets look at the telecom market today. In the old days you bought your phones from the phone company, or you rented them. There was one phone company per country for the most part. They all bought from the same companies that produced handsets or had their own labs that developed then had phones manufactured. But that model is long gone. No one buys phones from the phone company, unless the phone company is a channel partner. And the technology running the phone companies come from a myriad of companies, all of who work through for the most part Network Equipment Providers (NEPs.) Today, companies like Nokia Siemens, Alcatel-Lucent and Huawei are the old line NEPS that supply the telcos with gear that makes the telco networks work.
Nortel used to be in that same suite of companies but imploded. But Nortel understood VoIP, possibly better than all the rest. For VoIP companies, especially in the software and applications layer understanding the channels of distribution is key, especially if you want to reach the massive market of business customers. That means knowing who the players are that are changing the game in the way communications technology gets delivered to the market and eventually, the customer.
This we call eco-system competency when we talk with clients.
Today, the companies changing the game in getting new telecom technology to the market include Broadsoft, MetaSwitch and GENBAND. They each control the lion’s share of what gets to the telcos so eventually in a transparent way the technology gets to consumers, and to the business markets too. Understanding the channel is key to success of any telecom products or services company, for one reason. It’s called Go To Market (GTM) but really could mean Get to (the) Market, and without channel partners there are just too many carriers, mobile operators and service providers out there today to effectively get to and sell to all of them directly.
Take Microsoft. Long a giant, with a massive sales engine, today they are focusing on using the mobile operators as a key channel to grow their business and take market share away from RIM, Apple and Google. They each do this by defining their operator partner channel in such a way as to have the mobile network operators selling to enterprise and consumers. This is called the indirect channel approach.
Well closer to home, CounterPath, the company whose advisory board I sit on, and which my agency works with, is making news by adding GENBAND to their roster of strategic partners today. With this addition CounterPath has once again demonstrated they get the distribution model to bring the world of softphones and VoIP technology.
This new alliance is in addition to last year’s link up with Metaswitch and a long standing relationship with Broadsoft, all of whom compete for the tier one to tier three carrier and mobile operator business, CounterPath now has the three most innovative Network Equipment Providers (NEPs) in the business selling their softphones and other technology they have developed or rolled up. How they got there was based first on successes in the Enterprise space with strategic alliances with the likes of Cisco, Avaya, Mitel and Genesys.
Who or what is Genband? Only a company that picked up the Nortel telecom assets and sold a ton of it last year. While private, they are backed by the venerable, and respected, tier one investor, Oak Investment Partners. Long time and very well resepected Canadian telecom business watcher and writer Mark Evans points to the size of the market Genband got into with their acquisition of Nortel, noting the 2008 sales as $820 million. But it’s the news from Nortel that was the most revealing, and potentially beneficial to CounterPath. 121 million ports and over 10 million SIP lines to leading carriers globally. That’s a market ready to be turned and already a book of business that needs something new.
Why is this important? Well just last month CounterPath expanded their relationship with Wall Street darling BroadSoft, by expanding their Broadworks efforts to the mobile level. This is important because it shows Broadsoft and CounterPath both see the mobile market as intrinsically important and Broadsoft needs an alliance with someone to develop breakthrough technology to be able to go to their customers and sell up, after they have sold in. Genband, like MetaSwitch and Broadsoft see the future too.
Now with CounterPath’s soft phones and configuration technology Genband can take that existing 121 million port customer base and upsell them with something new. Mobile endpoints on new IP devices like iPads, iPhones and Androids through the carrier customers. Genband will thus take CounterPath in more deeply with the Tier one to Tier three telcos that around the globe are on par with the AT&T’s and Verizon’s of their nations. By taking what CounterPath has and blending it with the Nortel technology that Genband now owns, the two can tie together feature support and user experience.
The strategy is known as swarming. Cisco, Dell and Microsoft all understand that sales approach, and so does CounterPath. Now, between Genband, Metawitch or BroadSoft, telcos now will get offered CounterPath. For the telcos it means selling an already trusted brand at the Enterprise level. For the Enterprise it means being sold something their peers already buy. And for users it means a consistent experience end to end.
Growing their eco-system this way over the past three years and gearing up towards other people’s endpoints was the key. Unlike the days of old, there’s no need to manufacture a phone. You just have to connect to what’s on people’s desks or in their hands. CounterPath sees that, and with this latest move now has more routes to more carriers than ever before. That’s getting the distribution game right.
And in my book distribution is like chapter one of Machiavelli’s book, “The Prince" where he wrote "Territory establishes control." Well, with today’s news announcement, CounterPath just gobbled up a lot more telecom territory.
