How many tech buzzwords can you get into one newly-launched company's mission?
EC3, slated to go to market in October 2012, has created a hosted collaboration solution including cloud-based voice, video, and messaging services that CEO Daniel Newman says will be marketed exclusively to commercial integrators and VARs.
For integrators and VARs, the idea of being a cloud collaboration provider to their clients has been appealing but extremely daunting, Newman says, but EC3 changes the game with disruptive pricing and elimination of most infrastructure needs.
“We're basically making it so easy for our partners to become hosted cloud providers. All they need is to be able to log into a website to do it,” he says.
In this case, Newman adds, the buzzwords are substantive. “I actually have been known to tease people for their abuse of buzzwords. The Bottom line is we have a clear vision for what we want to accomplish. Words on paper are just words, but we are confident that our solution will revolutionize the way cloud services are delivered by the partners we serve.
"For the longest time this industry has talked about moving to a services model and we believe we have the platform to turn that talk into reality.”
EC3: The Inside Scoop
Newman, former CEO of integration firm United Visual, current CEO of cloud-based management solutions provider EOS, EVP of Cisco Systems distributor TMD, talked to EH Publishing about EC3:
EC3 allows dealers to piggyback on its cloud infrastructure and, in turn, offer their clients voice, video and messaging services. Is that about right?
Newman: EC3's Synergy solution is a cloud based hosted service providing voice, video, and unified messaging services. The services will be subscription based and they can be procured as turnkey including all hardware (IP phones, routers, etc.) or as license only if the partners seek to procure the hardware elsewhere. Our turn-key packages include all best of breed Cisco hardware, but the solution is open standard so other products will work as well.
How much would it cost dealers to create this infrastructure themselves, and how much do you charge them?
Newman: While the exact number varies based on the number of users and the size of the deployment, for a partner to stand up an enterprise-grade cloud-based service they would be looking at a $1 million-plus investment. Taking into account redundancy, engineering and support, as well as massive scalability, the solution could cost much more. We believe this is cost prohibitive for most partners, so if they are able to leverage our solutions to provide a five-nine quality [99.999 percent up time] solution; then they can focus on what they do best and that is delivering the service rather than worrying about developing it.
How long will it take EC3's dealer partners to earn their investments back and start profiting as cloud providers?
Newman: This really depends on the level of commitment/investment that the partner makes. To be an agent level partner there is really very little upfront investment required. For the partner that is seeking to sell this in large volumes and may even want their own branded solution, it may take several months of active selling to recoup the investment. We are focused on making the barrier to entry as low as possible for partners that are genuinely interested in delivering our service.
Do integrators and VARs want to be cloud providers and why?
Newman: I think it is always a mistake to over generalize an industry. What I will say is that there is a group of forward-thinking integration firms that are very focused on building out their service offerings to include solutions that generate substantial recurring revenues. This is because profitable recurring revenue is a key to strong cash flow, greater profitability and, of course, greater business valuations.
How do you take the responsibility to provide service off of your partners' backs?
Newman: EC3 has a two-prong approach to simplifying the delivery of our services. First is to make the quote to order process the easiest in the industry. We plan to do this through a web-based portal that allows our partners to generate proposals including statements of work as well as quotations by asking only a few select question as to the customers need for collaboration services.
This portal will also serve as the knowledge center and support center as well as CRM for managing all of the quoted opportunities of our solution. Second is to include TAC in the subscription fee so the end customers can call our help desk so the partners can focus on revenue generation rather than customer support.
Will integrators and VARs be reselling an EC3-branded solution?
Newman: The solution can come in two forms. An EC3 branded solution or an OEM branded solution.
We feel that some partners will want to try and differentiate through a branded offering, while others may not find that to be as important. Either way, the service level and capabilities won't change. Obviously the partner will be making a more substantial investment if they choose to brand the portal, but for the VAR that is serious about this business and their brand we feel like the cost is anything but intrusive.
You say you are exclusively targeting commercial integrators and VARs. Why?
Newman: The bottom line is this. Today, if a CI or IT VAR seeks to deliver this type of service they are either going to partner with another VAR who [might be] a competitor or a service provider like AT&T or Verizon. Either way they are not putting themselves in a great position. Working with another VAR is limiting because chances are they aren't really set up with a channel focus, not to mention that they will know who your customers are.
As for the service providers, it is very hard to be relevant in their ecosystems unless you are moving massive numbers. We wholeheartedly buy into the channel and given the importance of communications in a business's day to day operation we feel this channel is well set up to provide great value to the end user.
EC3's BroadTouch Business Communicator
Are you capitalizing on a trend - perhaps led by Skype and Google - toward low-cost collaboration solutions?
Newman: I don't know if I would say that; however, I would say that services like Skype and Google Apps have shown the markets that powerful solutions can be delivered in low- and no-cost cloud packages. We believe that there are opportunities from small business all the way up to the enterprise to provide a better brand of service at a price that is disruptive to what other service providers offer today.
You mentioned that it costs millions of dollars to build this infrastructure. How can your partners feel confident that EC3 will earn back its investment and continue to provide the services they'll be re-selling?
Newman: EC3 benefits from the backing of the owners of two strong companies. The founders, Joe Smith, Chris Avants, Darcy Harrell, and myself bring the support and resources of our companies TMD and L3 Communications to back the development and growth of our platform. And while EC3 is a separate venture from the other two companies, the founders are committed to the continued investment to see this business grow.
Further, we have pre-launch commitments from a couple of substantial partners that will quickly put this new endeavor into the black. But even if that wasn't the case we would have moved forward. This opportunity to change the game for our partners was just too good to pass up.
How will distribution work?
Newman: EC3's Synergy Solution as well as its future solutions will be distributed exclusively through TMD's channel of CIs and VARS. As a Cisco distributor we have access to more than 20,000 Cisco partners in North America, and we believe this solution will be a great complement to the offerings of the partners that we support.
How can integrators and VARs learn more about EC3's solutions?
Newman: With an impending launch date of October 1 , we will have our web presence up at www.ec3us.com as well as information on our website www.tmdconnect.com. Of course you can just email me and I'll be happy to further discuss.