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Week 12: Consumption Economics Predictions Came True…Now What Do We Do?

This is the final post in a twelve week series. “A Few Words From Chuck–The Epilogue” is the culmination of Chuck Daniels’ 30+ years of industry knowledge, the recommendations from Consumption Economics, and a real solution to address the shifts. It is specifically written for MSPs serving the SMB market who are looking for ways to capitalize on the shifts identified in Consumption Economics.

A FEW WORDS FROM CHUCK—THE EPILOGUE CE

For the last eleven weeks, this blog series focused on predictions from the TSIA as presented in Consumption Economics–The New Rules of Tech. We discussed WHAT needs to be done, HOW it should be done, and WHEN to do it. This week, we offer a specific solution that directly addresses five of the seven shifts: the D3 Unified Communications White Label, Cloud-based Phone and Unified Communications platform.

On the surface, this seems completely self-serving so please allow me to explain. The founders of D3 Unified Communications established our company exclusively for technology VARs and MSPs for the sole purpose of developing a service that would allow them address the challenges described in Consumption Economics. If you recall from Week 1 of this blog series, we outlined the seven shifts that Consumption Economics predicted in 2011 would permanently change forever how customers consumed technology services. The D3UC White Label, Cloud-based Phone and UC services help MSPs address the first five shifts while generating monthly recurring revenues with profit margins of 50% to 100%.

Below is a description of each shift and how the D3UC solution addresses the shift to the benefit of the MSP and their customers:

Shift #1: The risk in the purchase decision will shift from the customer toward the supplier.
What this means to the VAR or MSP:
Customers no longer want to risk their capital dollars to buy technology solutions that may or may not perform as promised. They want YOU to buy the technology solution and sell it to them for a monthly fee based on their usage.
How the D3UC solution helps: D3UC does not charge upfront fees to VARs or MSPs. Our White Label Resellers and White Label Agents pay a monthly fee based on the number of devices on the platform. Prices for IP phones range from $100 to $200 and are a pass-through cost to the customer—either paid upfront or monthly.

Shift #2: Complexity’s long and illustrious reign will end. Simplicity will be king.
What this means to the VAR or MSP:
Customers are tired of complexity. Simplicity is becoming the new hallmark of sophistication. When it comes to the technology services they buy, they don’t want to wait months for customization, configuration, implementation, and training to be completed before they can benefit from the new technology. They want the entire implementation cycle for a new technology purchase to be completed in weeks instead of months.
How the D3UC solution helps: Simplicity is at the heart of the D3UC platform. It takes approximately 10 minutes to take a new IP phone out of its box, provision it via the D3UC Portal, plug it into an internet connection, and start making and receiving calls. White Label Resellers and White Label Agents (or their customers) can perform all activities necessary to set up an entire office through the D3UC internet Portal. Everything can be resolved remotely via the Internet Portal.

Shift #3: Cloud customer aggregators will shrink the direct market for technology providers.
What this means to the VAR or MSP:
Most technology VARs and MSPs serving SMB businesses currently sell premise-based “infrastructure” solutions that provide revenues from the sale of equipment and the services necessary to install and support them at the customer’s location. Now, Cloud-based infrastructure competitors sell lower cost solutions bundled with Phone & Unified Communications services directly to SMB companies, eliminating many VARs and MSPs along the way.
How the D3UC solution helps: Our platform allows VARs and MSPs to supplement their current, declining profit margin infrastructure solutions with higher profit margin Cloud-based Phone & Unified Communications services. The D3UC platform is price, feature and function competitive with the offerings of the larger, infrastructure solution competitors and provides monthly recurring revenue streams with profit margins of 50% to 100%. The D3UC solution also helps VARs & MSPs transform their business models from the old CapEx model to the new OpEx model.

Shift #4: Big changes will come to the VAR & MSP channel ecosystem.
What this means to the VAR or MSP:
Prior to the advent of the Cloud, it was not cost effective for large technology vendors of Phone & Unified Communications solutions to sell their products and services directly to the SMB market. Instead, they sold their products and services to the SMB market through VARs and MSPs, bundling them with their own professional services – installing, configuring, training, and supporting the product. The Cloud has completely changed these relationships. Large technology vendors no longer need to rely on VARs or MSPs to sell their products directly to the SMB market and customers no longer wants to buy a product and pay professional service fees to VARs or MSPs if they can buy the same capabilities on a monthly basis via a Cloud-based provider. This is the #1 threat to the VAR’s and MSP’s business model.
How the D3UC solution helps: The D3 Phone & Unified Communications White Label, Cloud-based platform levels the playing field for VARs and MSPs. D3UC White Label Resellers and White Label Agents are able to offer competitive, feature-rich functionality branded with their name which generates additional revenue streams — selling and installing phones, providing training via the web, and signing managed services agreements for ongoing support and problem resolution. D3UC believes that the customers of VARs and MSPs prefer to maintain their current relationships with their trusted technology providers. We say this confidently as long as they are able to provide the same competitive pricing as the large competitors while also supporting how their customers now want to consume their technology purchases – in monthly OpEx payments instead of large, upfront CapEx payments.

Shift #5: Cheaper enterprise technology software will emerge.
What this means to the VAR or MSP:
For the longest time, large technology vendors have had a strangle-hold on their markets because they were the only ones who had the resources and endless R&D budgets. The “Open Source” movement was started to break the hold the existing vendors had on their markets by creating “free” alternatives to the expensive and proprietary solutions from the large technology vendors.
How the D3UC solution helps: The D3UC platform is a direct result of the Open Source movement in telecommunications products and services industry. The Open Source components in the D3UC platform are free from hardware, software and licensing fees. By operating a Phone & Unified Communications platform that has no upfront software and licensing fees, D3UC is able to pass significant saving on to our White Label Resellers and White Label Agents. They have the power to upsell features and set the price for the Phone & UC services they sell.

ABOUT THE FOUNDERS OF D3 UNIFIED COMMUNICATIONS

In 2005, the three founders of D3 Unified Communications were hired to create a Cloud-based telecommunications subsidiary for a large banking cooperative. Partnering with local MSPs was the key to their success; together, they helped deliver a combined voice and data solution that was superior in price and functionality to the competitive offerings of the phone and cable companies. The company grew to 600 locations in 15 states with over 10,000 phones in just eight years. During that time, Chuck, Mike and Imran witnessed the struggles of the technology VARs and MSPs serving the SMB market. This observation combined with the reality of Consumption Economics is what prompted them to establish D3 Unified Communications in 2013. Their White Label, Cloud-based Phone and UC platform was created exclusively for MSPs for the sole purpose of addressing the shifts outlined in Consumption Economics.


Please let us know if this post or any other post in our Consumption Economics blog series resonates with you by leaving a comment. We do value your input!

D3UC is dedicated to and entrenched with the MSP community. We have spent the last 18 months perfecting the D3UC platform and developing everything you need to sell Phone and UC services to your customers. Everything is branded in your company’s name; you sell it as your own and reap significant profits!

If you would like to discuss how D3 Unified Communications can help your company capitalize on the shifts predicted by Consumption Economics and prosper in a Cloud-driven world, please call me at 973-333-3322. I look forward to your call.

Originally published July 19, 2015. Reviewed December 2016.

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  • Two Offices, 8 Employees

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    • VM to email tracks calls for follow up

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    • Gives African company a U.S. presence
    • Calls made from Africa originate in U.S.
    • Caller ID displays U.S. number
    • Calls to U.S. number answered in Africa

  • Music Company with 20 Employees

    • Use original songs for music on hold
    • UC features give corporate feel
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    • Monthly cost savings of 40%

  • VoIP Replaces PBX

    • NYC-based company with 4 locations
    • 250 phones, free inter-office calling
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    • Reduced monthly costs by 50%

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    • Always open with find me—follow me
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    • Offers phone service to tenants
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  • Two Location Immigration Law Firm

    • Offices in NY and NJ
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    • Attorneys never miss a call
    • 5 digit dialing between offices

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    • 4 founders, 4 homes, 2 states
    • 4 digit dialing for conferences
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    • UC services keep staff connected

  • International Non-profit

    • Simultaneous ring to cell phone
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    • Monthly savings of 60%

  • Law Firm with 14 Employees

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