By Simon Woodhead
It has been a week since we announced the acquisition of Sipcentric and Birchills Telecom. I promised that I would update you on our plans. This is an attempt to do so but also an opportunity to answer some questions arising in discussions since.
For many years, we have been looking for a suitable hosted PBX solution that enables us to offer customers a more vertically integrated set of options. The reality is that in wholesale we walk a thin and sometimes grey line between those who simply switch minutes in volume, with no value added, and being the value-added enabler.
Our hearts and values have always been in the enablement rather than the pure play “stack it high, sell it cheap” minute shops, and we’ve attracted a smart customer base that gets it and reflects this – thank you. However, the downside of being the enabler is that by definition you can attract people who need enabling, ergo, can be less able. Some may be advanced in terms of sales, marketing, packaging but may lack the engineering skills to build and operate a technical platform. In recent years we’ve spent a disproportionate amount of energy filtering out those people from the tide of resellers who wish to leave ‘me too’ but aren’t technically ready to. We’ve needed a solution to service these people, and complete a deep customer upgrade path that lets them go from concept through to total ownership, with us helping in the right way at the right time all along. Arguably we’ve been a square peg in a round hole for some people, at some stages along that path.
In Sipcentric, we’ve acquired some amazing intellectual property and a stunning team. Sipcentric’s platform is so much more than just a hosted PBX. It is the building blocks on which almost any communications business could be built, including hosted PBX. Nimvelo is a reference implementation of its services and APIs, whilst Birchills Telecom is a traditional reseller of the kind we previously couldn’t have helped – both give great insight into where the market is at.
We think our vertical integration away from pure wholesale opens a number of doors for customers. Where we’ve lost customers in recent years, a common theme is them finding it too hard or uneconomic to operate their own platform, them possibly having only done so in the first place to access wholesale pricing. Now, customers can genuinely have their cake and eat it, benefiting from Simwood’s wholesale services either directly or packaged through what we believe is the most user-friendly best architected reseller solution in the marketplace. Our customer can add value where they’re best able to, rather than being forced down a sub-optimal path, and the end user can get something truly different.
The key phrase here is “add value”, as we passionately believe everyone in the supply chain should add value to the end-user. Where everyone is adding value, and all doing so in their own unique way to reach their unique audience, this market is plenty big enough for everyone.
The alternative of resellers in a stack that we’ve seen 7 deep, reselling the same bland commoditised rubbish are adding no value to the end-user, only each other. Such stacking can only exist at best due to misguided volume discounts, at worst due to all pricing being hidden behind sneaky NDAs with little consistency in terms between two resellers. That is not a world we will defend and we believe Simwood transparency and fairness can help bring the best service and choice to end-users, which long-term is what we should all aim for.
Whilst Simwood’s wholesale services are largely complementary to Sipcentric’s partner services we will be keeping them distinctly separate. Simwood Wholesale will continue to service our existing customer base (through Simwood eSMS Limited and Simwood Inc), but arguably will continue on the established trajectory of raising the bar to entry, which many of you have welcomed. Sipcentric Limited will be the platform for Simwood Partner services.
Some of you have asked whether this means that services can be mixed and matched, for example taking expected Partner minute bundles and combining them with Wholesale numbering. This obviously would not make commercial sense to us and therefore we are clear that in almost every circumstance, customers will be either Simwood Wholesale or Simwood Partner, with distinct contracts and billing, but almost never both. Existing Simwood Wholesale customers are very welcome to embrace the new Simwood Partner offerings and we will be very accommodating in terms of contracts terms and existing commitments in order to enable such migration, but it will be a migration to whichever offers the most appropriate solution, not an expansion to consume both.
New customers will have a clean journey through being a Partner reseller, becoming a Wholesale customer should they ever wish to build (or already have) their own platform or wish to license our software to run on their own tin. At this latter level, wholesale commercials fit with wholesale ownership – our customer being able to access Simwood Wholesale pricing whilst using the same software that powers Simwood Partner to handle their own minute bundles etc. We’re of course very happy to help with colocation and connectivity here.
There will be no requirement for you to sign non-disclosure agreements so we can give you terms we wouldn’t want anyone else finding out – that just feels dirty, underhand and not to mention unfair! What the actual price is has been an interesting discussion, because the market leader by volume in the space has always led on price. They look to have ran out of strategy now though so where will they go next? We’ve seen the answer there as existing Simwood customers have pitched against multiple ‘me too’ resellers, with ‘me too’ themselves in the bidding as well. In every case we know the Simwood customer has won, but how can that possibly end well for the others!?
So what does this mean for Partner pricing? Well we do have a strategy, and we don’t have the constraints of either quarterly earnings reports to shareholders or license fees for someone else’s platform. Simwood’s obsessive ownership of everything in our supply chain means we don’t need to worry about license and support fees and, quite frankly, we’re used to being the thin-end of the margin curve already! So, make no mistake, if we wanted to be the lowest-priced in the market, we could, but does entering in that place help our customers and end-users? Probably not.
Pricing also signals value, and we have a solution way ahead of alternatives. It offers great quality, uptime, and employs all the end-user privacy and security features we’ve been banging on about for years that many in the market-place disregard. It also has a 2019 user interface, there’s no sneaky NDAs, and we’ll even return your call! This solution could be priced far higher than the commoditised alternative but we know this is a price-sensitive space.
We will therefore be pitching seats and bundles comparably with the market as at that level they offer a fair division of margin and enable quite disruptive offerings to end-users. However, for that you’ll be getting far more value, and we can be more flexible on contract terms – no 5 year lock-ins to get our best pricing. You’ll also know it is our best pricing because, in case we haven’t mentioned it enough, there’ll be no sneaky NDAs. Pricing will be clean, clear and on our website; how refreshing! This will all be available from November 1st so please reach out to us ASAP to get involved.
|On-boarding and white-labelling||GBP 500||Non-recurring set-up|
|Seat with 2000 mobile mins / 2000 fixed minutes||GBP 8||per month, no minimum term|
|Seat with 2000 mobile mins / 2000 fixed minutes||GBP 7||per month, with 1 year contract|
|Seat with 2000 mobile mins / 2000 fixed minutes||GBP 6||per month, with 3 year contract|
Given the concerns expressed over ‘me too’ competing with their own resellers, we also need to address the fact that we now have potential to as well. We are very clear that we have absolutely no intention of competing with our customers, and hopefully we’ve built up a level of trust given our honesty and transparency – your reactions to this news on the whole reassure me we have. But beyond that, we are committed to customers that Simwood Partner will trade as a customer of Simwood Wholesale, and will never have preferential pricing over the standard commercial offerings available to any other customer. Our Managed Interconnect service level has been available to those who wish to compete head-on with ‘me too’ in composing unlimited minute bundles, and remains so. This market is plenty big enough for everyone and still growing at 40% p.a. Where everyone is adding value, that value will be subtly different and appeal to a different customer base so we’re happy even our customers are not truly competing with each other.
The only people we cannot reassure are those sneaky middlemen simultaneously claiming to their customers to be out to destroy ‘me too’, whilst being a reseller of ‘me too’. How does that possibly work!? We’re very excited that Simwood Partner resellers are going to be able to shine some long-needed light under some of these rocks, supporting those who have honestly built great solutions on Simwood’s Wholesale solutions and are out there fighting poor-service and dishonesty. In my eyes, we’re all on the same side, and I can’t wait to get started.