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How to Grow Your Business as a UCaaS Provider

If your customers aren’t asking you about cloud telephony today, they soon will be. Frost & Sullivan research indicates 82% of businesses have moved or are planning to move part or all of their enterprise telephony solutions to the cloud by 2019, and they forecast the user base for IP telephony and unified communications as a service (UCaaS) to grow 23% between 2017 and 2024.

As a managed service provider, you have plenty of choices when it comes to choosing a UCaaS provider for you and your customers. But not all UCaaS providers structure their MSP partner relationships in the same way, and few of them do so with an approach that benefits your business. How do you choose the right provider whose partner model benefits your business the most? And which businesses will be looking to service providers for guidance on moving their communications needs to the cloud?

These are the questions Frost & Sullivan set out to answer in their eBook “Best Strategies to Grow Your Business as a UCaaS Reseller.”

The mid-market opportunity

Besides evaluating the UCaaS market, the Frost & Sullivan eBook identifies those segments most in need of trusted partners to guide them on their cloud journey. With small businesses looking to telcos and large enterprise IT teams seeking out next-generation UCaaS providers, there is untapped potential with mid-market (50-500 users) companies that look to IT service providers for their cloud communications needs. Resellers, VARs, and MSPs are well-positioned to give those mid-market businesses a “one-stop-shop” for both equipment and services that telcos and other service providers don’t commonly deliver.

Mid-market businesses will be looking to their IT service providers for:

  • A variety of equipment and services
  • Unique skillsets for implementation, integration, and more
  • More attentiveness to and knowledge of customer needs
  • Greater knowledge of the customer’s infrastructure, existing systems, and integrations
  • Familiar brands and trusted relationships with those brands

However, to place full confidence in a VAR or MSP UCaaS provider, mid‑market businesses need to know that their partner has control or at least influence over the technology roadmap, solution packaging, and pricing.

UCaaS provider partnership models

And that’s where the partnership model matters. Service providers looking to capitalize on the mid-market need for UCaaS offerings can choose among several different partnership models, according to Frost & Sullivan, as follows:

  • The private-label resale model, in which you own the customer relationship, margins, bundled services, pricing, and more
  • Co-branding to deliver the solution with the provider
  • Resale under the UCaaS provider’s brand, in which you earn a percentage of recurring UCaaS revenues and own customer contracts along with the ability to offer additional services
  • The agent model, which gives you an additional revenue stream via one-time commissions or recurring residuals

Pros and cons of each model are outlined, as well as a recommendation on what type of service provider would be the best fit for each model.

So which UCaaS provider partnership model will give your MSP business higher and more sustainable margins than other models—sometimes up to 60% to 70% on average? You’ll have to take a look at the eBook (registration required) for the answer to that question. Spoiler alert: It’s our preferred model for our MSP partners…

Download the Frost & Sullivan ebook to learn how you can grow your UCaaS business

Download the ebook

About Mark Sher

Mark is the Vice President of Unified Communications, Product and Marketing at Intermedia.