December 2001
 

BY RICH TEHRANI

All of these escalating challenges create anxiety and fear over the economic consequences. How much our economy may suffer, or for how long, is uncertain. However, the economic downturns immediate consequences shouldnt occasion any surprise. Nearly everybody will take the opportunity to hunker down, avoid risks, cut costs, and engineer an overall contraction. Our industry, which, more than most, used to urge a go-go-go ethic, will find itself coping with a pervasive and potentially dispiriting wait-and-see sentiment.

Dispiriting as the general sense of caution may be, despair is not an option. Instead, these gray days should be taken as an opportunity for some self-examination. We could, for example, begin by remembering that the fundamentals for our industry remain sound. There is still a need for richer, more natural communications and human-computer interactions. Moreover, the technological means with which we may satisfy this need continue to evolve. Improvements in processor power still observe Moores Law. Increases in available bandwidth continue apace.

Thus consoled, we might yet be inspired by remembering that innovations in communications solutions are by no means limited to automating routine interactions and reducing head count. In services industries, unlike manufacturing industries, the automation of routine tasks may free many workers to take on more interesting tasks, or at least promote the eventual creation of more interesting work, which could go far actualizing heretofore unrealized human potential.

Thus bolstered, we might be ready to take a hard look at our own practices, to see if we can identify any bad habits we might do well to eliminate. We could ask ourselves if the extended economic boom inculcated any complacency. We might even fnd we failed to attend to certain basics. If so, by identifying these basics, perhaps we could again attend to them, and by doing so, hasten the ultimate turnaround in our economic fortunes.

THIS... IS MARKETING
When I think of how a turnaround can be engineered, I remember a story I heard about Vince Lombardi. Soon after he took charge of the struggling Green Bay Packers, he decided that it was time to get back to basics. He assembled all of the players into a meeting. Holding a football, he waited patiently for the room to settle down. Then, raising the football above his head, he pronounced, This is a football. Granted, one wag called out, Hey, coach, can you go over that again? Everyone, Lombardi included, enjoyed a good laugh. But the Lombardis point was lost on no one. The team settled into a thorough and intense review, and no doubt the review contributed significantly to the teams ultimate success.

Similarly, we can take a moment to consider what is most basic to the communications industry. And what could be more fundamental than marketing? As weve all no doubt heard many times, exceptional marketing in the service of an indifferent product trumps indifferent marketing of an exceptional product. So, lets take a very basic look at marketing.

Distributors On Distribution
The best way to begin, I think, would be to concentrate on an aspect of marketing that is anything but glamorous. Lets not dwell on the sort of thing that is typically trumpeted in press releases. Lets not be distracted by novelty. Lets look at something that should be of abiding concern. Lets look at distribution.

Unfortunately, every time we revisit distribution with respect to converged communications, we hear the same themes. People on the data side need to learn about voice. People on the voice side need to learn about data. Educational efforts continue While we may tire of these themes, distribution, as a marketing function, is an especially timely topic these days, since many vendors and suppliers, in their haste to control costs, frequently reduce marketing expenditures, and even lay off marketing staff. Might vendors and suppliers, by limiting marketing commitments, let their channel relationships suffer? Might distributors respond by stepping up their own capabilities, filling in the gaps, so to speak? It at least seems possible that distributors would have an opportunity to distinguish themselves by doing what they could to compensate for a specific weakness on the part of vendors and suppliers.

An idea that is plausible but by no means proven is that in these difficult times, the distributor may evolve in its traditional role as the bridge between suppliers and end users, especially since both suppliers and end users seem to be moving further apart. As weve discussed, suppliers are cutting marketing resources, offering less in the way of training, promotion, and documentation. End users, for their part, want to contemplate nothing but the simplest installations and the shortest timeframes possible for return on investment. Distributors, however, may fill in the widening gap by expanding their role beyond the usual pick, pack, and ship approach. They may provide more value-add, accomplishing more systems integration on behalf of end users, upgrading their own Web sites, and organizing their own educational programs for resellers and end users.

A cursory review of the leading distributors tends to support our thesis. For example, Catalyst Telecom, which recently announced it was the first North American distributor of Intels Converged Communications Platform, credited its success to its long-standing commitment to telephony VARs, which includes strong multi-vendor configuration capabilities, proven system integration expertise, and first-line technical support, in addition to competitive pricing, fast delivery, and a broad product selection. Catalyst, which also recently announced the launch of its professional services initiative, hosts a technical knowledge portal on its Web site, and publishes a channel-focused newsletter, called ESP Magazine, where the ESP refers to empowering solutions providers.

Another distributor, ALLTEL Communications Products, would seem to illustrate our thesis. ALLTEL provides value-added solutions and services, ranging from technical support to product integration, to meet a variety of customer demands regardless of the size and scope, said Scott Chesbro, president of the company. Through complete system integration, ALLTEL is able to provide customers with a customized experience beginning at order placement all the way to product receipt.

Further aspects of ALLTELs operations that suggest distribution may easily go far beyond mere warehousing and shipping include the following: strategic product sourcing; system integration (including distribution, e-procurement, and e-commerce enhancements such as real-time item availability, customized pricing, online order placement, order status, and tracking); technical support (including applications solutions, product configuration, and on-site technical assistance); product integration including system design and engineering, assembly, programming, configuration, and testing; and training (including on-site application training and educational product seminars).

Finally, we took the opportunity to talk to Jonathan Shapiro, CEO of Alliance Systems, a distribution company that designs, develops, and manufactures communication platform products that enable voice communication applications such as network signaling, switching, unified messaging, and voice over IP. We asked Shapiro whether some of the new next-gen communications systems, since they were designed to make moves, adds, and changes something that end customers can accomplish by themselves, might cause some resellers to feel threatened.

Or, in the long run, might there be more customization service opportunities, given that these same systems emphasize advanced functionality and tools that may coordinate communications and customer interactions with highly individual business processes? According to Shapiro, The relationship between the end user and the reseller will not just be based on who does moves and changes. In the current environment most customers do some level of moves and changes themselves. Tools for current PBXs are easy to use and do not require much technical support. Cabling, call routing, voice mail, and IVR issues, however, really do govern whether the VAR or end user does the work. Most VARS try to sell support for these complicated functions. Next-generation systems may appear easier at first, but the call routing, cabling to new physical locations, and new feature integrations will still require planning and value-added services. Large customer will subcontract the cabling and may use the VAR for feature implementation. The VARs have been somewhat weak in selling consulting and could learn from the application sales people and systems integrators to sell services more effectively.

Another opportunity cited by Shapiro was the need for enterprises and call centers to account for business continuance planning. The events of September 11th clearly show the vulnerability of current circuit switched networks. The Internet and wireless networks stayed up and running while the circuit-switched network went down.

Every company needs to consider redundant or alternative networks in the event that their facility is not usable or the switched network goes down. Building redundant and contingency networks out of IP and wireless and possible ASP-based solutions give certain mission-critical organization the best reason possible to invest now.

A Supplier On Distribution
We noticed a couple of recent distribution announcements involving key suppliers of converged communications systems, so we thought to ask for the suppliers point of view. First, we noticed that 3Com had signed an agreement with Ingram Micro to distribute 3Coms NBX networked telephony solutions. In the announcement, 3Com cited advantages to distributors and VARs of the NBX solutions open, scalable architecture, rich application suite, and simple administration.

In addition, Ericsson Enterprise announced a distribution agreement with Graybar Electric Company. The distributor, in accordance with the agreement, began offering Ericssons line of enterprise communications products to authorized resellers in the United States and Canada, including the MD110 Business Communications Systems, MD110 Compact Enterprise, the WebSwitch IP telephony family, and wireless LAN (802.11b) products.

Graybars reach enables Ericsson Enterprise to expand its penetration in the North American market, said Harald Greifensteiner, director of marketing, Ericsson Enterprise. Graybar is able to sharpen a resellers competitive position through their powerful logistics network of 16 regional warehouses and more than 290 branch locations, as well as their training and financing services.

When we followed up with Greifensteiner, he indicated that Ericsson itself tried to do as much as possible to bridge the gap between supplier and reseller. He noted, At the end user side, partners (for example, resellers) are selling our products and solutions and basically carrying our branding into the market. To ensure quality of service, we make sure that partners are trained, qualified, and have the necessary product/solution expertise for selling and implementation.

This means we have a certification program in place (for authorized sales, service, and training partners), which is a mandatory requirement to sell and implement Ericsson Enterprise products. We offer our partners training/education as well as all kinds of information via e-business platforms as well as a wide range of level 2 tech support options. So, in general, we treat our resellers as if they have bought from us directly, even if they bought via a distributor. We utilize the help of our distributors, for example, organizing information events, doing training in their facilities, etc.

As for whether self-administration of communications systems constituted a threat to resellers, Greifensteiner responded, Yes and no. Yes, products are getting easier to use from an administration point of view; however, they still need administration. The self-administrating plug and play LAN has not been invented yet. With the change from mainframes to LAN architectures, IT departments havent been eliminated because we rather rarely see a LAN administrated just by an end user. It is true, however, that new technology does lower the entry barrier.

On the other hand, there are clear trends where end users/companies are focusing more and more on their core business. Small to medium enterprises usually dont have the dedicated administrative resources that large organizations traditionally have had, and today even those large organizations [are unable or unwilling] to keep them. This means that outsourcing becomes a clear trend for companies.

Or, in the long run, might there be more customization service opportunities, given that these same systems emphasize advanced functionality and tools that may coordinate communications and customer interactions with highly individual business processes? Its the old question of customization versus standardization. New technologies always start out very customized and as soon as they gain maturity, standardization kicks in. Since real life is, in most cases, a mixture of technologies/solutions in different phases of maturity, the result is a mixed picture. Certain areas are more customized, certain areas are more standardized.

Getting The Word Out
While marketing encompasses a lot more than promotion, this one aspect of marketing could also stand some re-examination. Of late, with an increasingly tough market outlook, promotional efforts have tended to become confused. Promotion may include analyst relations, press relations, advertising, direct mail, and exhibiting. Also, a suppliers Web presence may constitute a kind of promotion, and efforts to drive traffic to a suppliers Web site may take advantage of more traditional promotion techniques.

Unfortunately, as I said, sometimes these different techniques become confused. For example, I often hear of suppliers (or their public relations representatives, anyway) referring to editorial coverage as free ink or free advertising. I beg to differ. There is a qualitative difference between advertising and editorial coverage, and readers are quite savvy enough to tell the difference.

While a trade magazine may appropriately discuss current trends in one or another market segment, a trade magazine may go only so far in describing the particulars of any one suppliers contributions. In any case, it is exceedingly rare for any one supplier or vendor to produce an offering that is so different that it lives up to its hype. Very seldom do we encounter a contribution so unprecedented that it allows the vendor to claim that it is unique in any significant way. Rather, it is typically the case that an editor may digest information from many sources, produce a general, summary piece, and produce a list of relevant vendors, nearly all of which make similar claims.

The ability to recognize that a supplier or vendor may not be as unusual as it would like to imagine itself to be is, to me, one way to distinguish between good and bad public relations. Bad public relations would flatter the supplier or vendor, suggesting that all that is needed is the appropriate puffery in a press release and sufficient energy in importuning editors.

Over-inflated claims or even obscurantist language in press announcements represents the lowest common denominator. Moreover, low-quality information is improved not at all through amplification, by treating the dissemination of information as a mere numbers game.

Hardly any better is the quality of the inquiries editors typically receive in response to editorial calendar postings. More often than not, a calendar posting prompts a public relations representative to call an editor, so that the public relations representative may ask, Whats the focus? Editors hardly know how to respond to such a vacuous question. Editors know from sobering experience that taking the time to explain the focus is usually time wasted. The PR rep listens attentively, promises to provide information consistent with the focus, but ultimately delivers information that isnt particularized to the needs of the publication in any way. Any editor with even a little experience knows how they would like to respond to the focus question. Theyd like to emulate Louis Armstrongs response to the question, Whats jazz? Armstrong would say, quite reasonably, If you have to ask, youll never know.

Another curious practice is the PR follow-up to extant editorial. Whenever we run a roundup, or an article in which we mention multiple players in an industry segment, PR reps emerge from the shadows, complaining that they represent have been overlooked. Without exception, we apologize for such unintended oversights. However, we also acknowledge that it is a difficult challenge to notice everybody, especially when everybody is striving to be noticed. Were inundated with e-mail, faxes, and voice mail from marketing and PR representatives. Altogether, the volume of information, much of it information of very low grade, creates something like a data smog, or a deafening din of white noise.

I fancy that given this prevalence of noise, editors and engineers have more alike than you might imagine. Both editors and engineers cope with their own signal-to-noise ratio problems. Both find that perfect resolution is an elusive goal.

Needless to say, any vendor that wants to emerge from the noise can take certain steps. These would include offering useful information to editors, and not just low-grade PR bids for attention. And it does happen. There are PR reps who are highly professional, and a joy to work with. Just be sure that if youre a supplier or vendor, you take care to support the good PR, and that you abjure the bad PR. This caveat is especially important now that many vendors and suppliers claim that their marketing efforts will be accomplished exclusively through public relations. 

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