Vendors got carried away with technology, says VP Matthieu Destot
Three pillars of focus and two words for his team: Growth and fun
WHEN it comes to Unified Communications (UC) solutions for enterprises, most, if not all, vendors have failed the market in some form or fashion over the last 10 years.
At least, that’s what Alcatel-Lucent Enterprise (ALUE) vice-president of sales for Asia, Matthieu Destot, believes to be the case.
“One-size-fits-all solutions, which include everything from telephony and instant messaging to web- and video-conferencing, dominate the market – bundled, unified, and pushed by all vendors.
“That’s not appealing to the end-customers.
“What we do see in the market in terms of trends is that the user profile and user desktop environment are very important.
“ALUE has recognised this and has shifted toward providing integrated solutions which are better suited to the unique environments of individual customers,” he says in a recent conversation with Digital News Asia (DNA) in Singapore.
Asked why that has been the case, given that the notion of custom-made solutions appears to be a ‘no-brainer,’ elicited a somewhat sheepish response from Destot.
“Well, I guess it has to do with the fact that we as vendors were very technology-centric when it came to developing solutions. It was about looking at what technology could do and providing ‘super-products’ which could do pretty much everything, from whiteboarding to telephony.
“It was about trying to unify all this technology, looking at research and development capabilities, and being really proud of that – and then just pushing it to market.
“It was a vision that we ourselves at ALUE had to change as well, when we became independent. We had to stop putting technology at the centre of everything; and put our customers and partners there instead – to think about delivering more value to end-users, over just pushing out a long list of features,” he adds.
Breaking down the pillars
There may be just one slide summing up ALUE’s new strategy for the months to come (see previous instalment), but the explanation behind the strategy runs quite a bit longer than that.
“I essentially have three pillars of focus and two words for my team: Growth and fun,” quips Destot (pic).
As previously shared by Destot, addressing the small and medium business (SMB) segment is one of these three core pillars for ALUE, and an especially important one for the Asia Pacific region.
The second pillar for the newly independent communications and networking solutions provider’s strategy is the cloud.
“The push for cloud-based solutions has been a key trend for a while now, but beyond the technology upgrade, we see that customers would like to move from a capital expenditure (capex) to operational expenditure (opex) model.
“We’ve taken note of this shift in preference and taken it one step further in pricing our solutions to match the business models of our customers,” he declares.
In the UC space, Destot says that customers are focused on garnering real return on investment (ROI) linked to the bundling of their carriage and UC equipment.
“Which is possible by adopting cloud-based solutions, as some of our partners are able to provide this. What’s true for UC is now true for networks; we are seeing more of our customers looking at managed LAN (local area network) solutions on an opex-based model, which is appealing.
“Even if this is only a starting point – as the cloud market is still emerging in many markets, with the most mature being Australia where 10% of the total market is cloud-based products and services – this remains a strong growth area and we are positioning ourselves for it,” he adds.
For its third pillar of focus, the company is also seeking to meet the unique demands of individual industries with purpose-built solutions. To help in this, it has built direct sales teams specialising in servicing specific industries, on top of its channel partner ecosystem.
“There are four key verticals that we are focusing on right now, with a goal to be in the top three with a 15% market share within the next five years – hospitality, healthcare, education, and manufacturing.
“Our approach will be on providing vertical-centric solutions based on the demands of individual markets,” says Destot.
The company already has an initial footprint in these verticals in varying countries, and for hospitality it is focused on growing its presence in Thailand, Indonesia, India and Singapore – building out its strong customer references in this space for communications solutions. It already counts Accor Hotels in Australia as a customer.
“More hotels are moving away from the traditional PBX (private branch exchange) setups and embracing the bring-your-own-device (BYOD) trend by offering services directly to guests’ mobile devices.
“Our portfolio allows customers to put software on devices to deliver UC solutions,” he adds.
Destot points to the company’s Smart Guest Application Suite, a Guest BYOD Telephony solution specifically designed for the hospitality industry that enables guests to use their own mobile devices to access hotel services, as one such example.
“Rather than paying capex, customers pay fees which come under opex, and the fees are based on occupancy of rooms, so hotels pay per guest, per day of usage – and this pricing model is a strong differentiator in the market,” he claims.
In the education vertical, ALUE already boasts a strong presence in Singapore, Australia and South Korea for its networking solutions, deploying unified access solutions across campuses for students and faculty.
“In Australia our customers include the Queensland University of Technology, and University of Technology Sydney; while in Singapore we have the National University of Singapore and recently won the contract for the Singapore University of Technology and Design as well,” Destot says.
Healthcare is a key vertical in Australia and Singapore, and ALUE is developing its presence in Malaysia as well.
In Australia, it counts Queensland Healthcare with 100,000 users as its biggest customer, and New South Wales Healthcare as a recent addition. In Singapore, the company won over Jurong Healthcare last year.
“It’s about providing differentiated value in this vertical, and you need to be very close to the end-user environments and its nuances,” says Destot.
“For example, the hospital administrator will have very different communications needs; compared with a nurse who is more mobile and needs robust real-time communications in place; compared with the patient who would want in-room entertainment.
“The network solution as well is a critical asset for hospitals with the rise of remote diagnostics; and with medical machines becoming IP-based (Internet Protocol), robust 24/7 availability is required,” he adds.
In manufacturing, ALUE is focused on northeast Asian countries such as Taiwan, Japan and South Korea, where the market is bigger and more mature.
“We’re developing a portfolio dedicated to the manufacturing sector. In a plant, there is a need for comprehensive solutions which encompass on-site mobility and which take the manufacturing chain into account, with features such as alarm-monitoring and real-time updates,” says Destot.
“This is an environment that cannot be serviced with traditional phones. For example, in critical chemical plants, there must be a centralised telephony console that’s connected to multiple devices – from smartphones to radios and industry-grade walkie-talkies.
“In the event of a crisis, information can and must be delivered across devices and managed from a control centre,” he explains.
It takes an ecosystem
Underpinning these ambitions is ALUE’s channel partner ecosystem, with Destot saying that it currently has about 100 ‘Tier 1’ partners across Asia Pacific, out of which 20 are distributors. These distributors have an average of 100 resellers each under them, with 50% of them active resellers.
“So we roughly have about 1,000 partners across the region selling or integrating our solutions. Our goal is to recruit more partners, especially for the SMB market, as we need to be closer to the end-user and more localised in our offerings,” he adds.
Destot says the company has a strong recruitment plan in India via a joint investment with Neoteric.
“That’s one of the new things we are doing, where we are co-investing in building up capabilities in certain markets. India is a very good example of this, where we have a strong growth plan and since the beginning of the year, we have gained an additional 35 partners in the country,” he adds.
Another such market is the Philippines, where Logic Solutions Inc, in partnership with ALUE, has established a new distribution entity via this co-investment model, with ALUE providing additional resources in terms of support talent.
In Malaysia, the company is in the process of confirming a distributor, with the target of recruiting an additional 100-150 resellers via its representative.
“This particular distributor we are talking to used to do Cisco solutions but will be moving to ALUE, so that is very good momentum for us in this market,” Destot says.
In addition, since January, the company has merged its services team with its sales teams to cover both sales and customer service support.
“We now have tightly integrated professional services support to help partners in delivering additional solutions on top of existing services, and are reinforcing these teams as well with additional investment and people,” says Destot.
This focus on building out a strong network of channel partners signals a philosophical shift for a company that was traditionally more invested in the direct sales model.
“I tell my team, ‘We used to be an organisation of sales heroes,’ where we were focused on gaining those big multimillion-dollar deals.
“But to have sustainable long-term growth, a ‘channelised’ business model is needed, where we work more closely with them on servicing key verticals,” shares Destot.
Based on the above three pillars of focus, he adds that ALUE targets to hit 20% growth this year in Asia Pacific.
“For the first quarter of this year we are forecasting double-digit growth based on sales and bookings, which is a good improvement from the last two quarters of 2014 where growth was in the single digits,” says Destot.
“We are now seeing an acceleration trend with bookings higher than sales, both of which are in the double digits. We are currently on a good trend towards meeting our objective, with a good forecast for the second quarter of this year,” he adds.
For Destot, the encouraging internal numbers are the result of simple hard work, and therein lies the true ‘secret sauce.’
“There is no magic behind this – we are investing 25% of resources behind this new strategic growth plan, and then delivering great solutions with our ecosystem of partners,” he declares.
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