Technology is Changing.  Your Business Model needs to keep up!  Check Out VoIP!

It is obvious that the technology of telecommunications has changed over the past 15 years.  It's still about about people communicating and connecting using voice services, but that underlying technology that enables this communication has moved from TDM to VoIP.  

Big news flash?  Hardly.  We have all anticipated this transition over the past years and most VARs and Interconnect companies have been making the technological switch from TDM to VoIP.  This has not been without some challenges.  Data Vars have had to get up to speed on Voice and Interconnect Companies have had to get up to speed on VoIP and networking technology.  

Moving into these new technologies is now necessitating a modification in the old fashioned business model that you may have been using for the last 20 years.  There is a clash of business models and the Interconnects have something to learn about the data model and the Data Vars have something to learn about VoIP.  Both need to take some time to analyze the emerging business model that has the most promise for success over the long term.

The time honored tradition of selling equipment, marking it up and maintaining it for many years is shifting.  While the equipment market is still robust and customers always will need a maintenance provider, there are some new services that can change the fundamental cash flow of your business. Before you go completely out of business, it's a good idea to consider how moving over to a new business model may effect your business.

Hosted VoIP services are gaining in popularity.  Selling hosted PBX services is far different than selling premise based equipment.  Here are a few fundamental differences:

1. There is no markup to speak of.  Most hosted providers will publish pricing and you sell at the published price.
   1. This is in contrast from purchasing at dealer volume price and selling at MSRP.  Less cash flow as a result of the sale.
   2. There needs to be a way to survive on the commissions until the recurring revenue is enough to fund operations.
2. The margins are different.  Instead of marking up equipment, revenue is generated through a revenue share.
   1. The revenue is substantial, especially when considering there is no PBX to install and purchase.  The commissions will mount up over time, but until there is a steady stream built up, be careful with cash.
   2. The best solution is to offer both premise based and hosted PBX services.  This will provide you a reasonable amount of time to increase your recurring revenue.
   3. Don't miss an opportunity to sell SIP trunking.  The revenue mounts up fast on SIP trunks and there are millions of customers who can benefit.
3. SIP trunks can be sold on any phone system.  Don't over look these sales.  They can increase your cash flow fast.

Summary:

Grow your recurring revenue as fast as you can by selling hosted VoIP PBX services as well as SIP Trunking.  Don't forget that you will need to gradually move into a pure shared revenue model so continue to offer premise based PBX with SIP Trunks (VoIP) for your customers that prefer it.  Having a blend of recurring revenue sales and premise based sales is the best business model while you are growing a strong and healthy recurring revenue base.

Stay involved with your customers.  With IPitomy, you still have the options of assisting your customers with their application.  It is a good idea to stay involved and be as helpful as you can.  Customers appreciate the relationship and will continue to look at you as their go-to company for telecommunications services. Adding managed services that include managing the router and the customers bandwidth is a good way to earn extra revenue and increase customer satisfaction.  IPitomy's new managed router offering is a good way to get started and improve your customers VoIP performance.