Become A Convergence Expert

One of the most intriguing panel discussions I attended this year was the “Walk The Talk” session at value-added distributor Catalyst Telecom’s Convergence Connection event. Unlike all too
many other panel discussions, which are little more than product PR and technology hype, this session featured three top VARs/systems integrators sharing the hard truths about becoming convergence experts. David Giangano, CEO of networking systems integrator Juma Technology Corp., was one of the presenters who warned the audience, “Even if you’re earning healthy profit margins selling traditional telephony systems, it won’t be long before a competitor selling a converged solution will make your business obsolete.” Giangano’s candor was just as intense (and appreciated) when I caught up with him recently. It turns out that the systems integrator, which was an $8 million company last year, is projecting $12 million in sales revenue by the end of 2006. While speaking with Giangano, it became clear that the one theme that ties together everything Juma Technology has accomplished over the past two years is that it never gets comfortable with its current status — it’s always evaluating the next best thing for its business. The following is a snapshot of Juma Technology’s business development, complete with Giangano and CTO Joseph Fuccillo’s no-nonsense insight into what it takes to make the transition from a TDM (time division multiplexing) telephony reseller to a convergence systems integrator.

Change Your Data-Only, Voice-Only Mindset

Within the first two years of Juma Technology’s inception, it realized that remaining a TDM-only reseller was a losing proposition. “There are a lot of really big TDM carriers/service providers that are experts at what they do and very tough to compete with,” says Giangano. “Plus, with TDM, there aren’t many ways VARs can differentiate themselves from their competitors. You have a PBX [private branch exchange] appliance that contains all of the phone features [e.g. voice mail, intercom/paging], and you plug the phones into the PBX.” In 2004, Giangano and his newly hired CTO, Fuccillo, saw VoIP as the next best thing in telephony. Not only could this new technology save customers money on long distance calls, it also offered systems integrators several ways to differentiate themselves from their competitors by offering customized applications such as unified messaging, call presence, find-me follow-me, and telephony/CRM (customer relationship management) integration.

Ramping up its business to sell VoIP wasn’t cheap, however. In fact, Giangano predicts he will spend close to $500,000 in test and demo equipment this year, which includes high-end products from vendors such as Avaya, Extreme Networks, Juniper, and Meru Networks. Both executives credit this decision with the systems integrator’s transition from earning 25% of its sales from IP technology in 2004 to IP sales comprising 85% of its projected revenue in 2006.

Two years ago Juma Technology had only two data engineers and five TDM engineers on board. Fuccillo remembers well what a disaster its first VoIP win almost turned into after the implementation was completed and the phones didn’t work properly. “It was like we instantly turned into two separate companies,” he says. “All of our TDM engineers insisted the problem was a network issue, and the data engineers insisted the problem stemmed from the TDM engineers.” Plus, many of the TDM engineers were cursing VoIP and saying that the company was making a big mistake by trying to sell it. “Shortly after fixing the problem, we very bluntly told our engineers that TDM technology was going away, and if they weren’t willing to learn a new technology, they would soon be out of jobs,” says Giangano. After making their point, Giangano and Fuccillo began researching VoIP hardware and software partners and investing heavily into a testing facility and equipment. According to Giangano, engineers spend about 20% of their time in training-related activities. “If they’re not out in the field installing hardware or software, they better be in the lab learning something new,” he quips.

Take A Best-Of-Breed Approach To Convergence

There are two basic approaches to selling convergence solutions: selecting one vendor that offers each component of a converged solution or finding the best components and integrating a best-of-breed solution. Even though the latter category requires a lot more work and skill for the systems integrator, Juma Technology believes this choice offers a stronger differentiator. “By evaluating several products, we learn which ones work best and what business problems they solve,” says Giangano. “And, that’s what our customers care about — having a partner that is responsible for seamlessly integrating the telephones, routers, switches, firewalls, and other components to support their business applications and solve their business problems … period.”

A large part of Fuccillo’s time is spent researching new VoIP, wireless, networking, and security hardware and software products, which he finds by reading trade magazines, technical journals, and white papers and by attending trade shows/conferences. One of the key criterion for bringing on a new product is that it cannot have any overlapping features or compete with an existing product. This is done to help Juma Technology form stronger relationships with its vendors by ensuring them it won’t take one of their referrals and complete the project with a competing vendor’s products. The other reason is that it helps streamline its engineers’ product training by enabling them to thoroughly learn only one firewall product line, for instance.

Juma Technology has discovered one other benefit to its best-of-breed approach to selling convergence — it causes customers to rely on the systems integrator’s expertise to keep everything working. As a result, customers are less likely to want to handle postimplementation support/maintenance issues themselves.

Become A Networking Consultant

Once Juma Technology tests a new product (which typically takes three to six months), completes a vendor’s product training program, and determines it wants to work with the vendor, it makes the extra effort to become that vendor’s go-to partner. Within 90 days of signing up with a new vendor, Juma Technology brings the new vendor into an implementation opportunity. For example, 60 days after signing up with Juniper Networks to resell its firewalls, Fuccillo recalls meeting with its Juniper account rep and making him aware of a very complex install Juma Technology was working on with a real estate company. “Unlike most VARs that use a Juniper firewall appliance to secure Internet traffic, we were using it to create a redundant mesh connection between buildings and to channel SDSL [symmetric DSL] and Internet traffic and VPN [virtual private network] tunnels from remote buildings to the real estate company’s headquarters,” says Fuccillo. “Our rep was very excited that his company’s firewall product was being used as such an important part of the install, and we quickly became Juniper’s go-to partner for several installs since that time.”

So, You’re A Convergence Expert … Now What?

Becoming a convergence expert is about 75% of the process to successfully sell this technology, which includes an array of appliances and software joined together by certified engineers using a variety of integration and configuration techniques. The remaining 25% of the process entails learning how to sell convergence. John Black, president of Catalyst Telecom, said it best at the Convergence Connection event mentioned earlier. “I wish I could take away all of our VARs’ products until after they’ve been engaged with a customer for 60 days,” he says. “That would force them to ask their customers questions and understand their business needs rather than pushing products.” This illustrates how Juma Technology works with new and existing customers. For example, if it’s meeting with a new healthcare client, it will initially ask questions related to compliance issues such as HIPAA (Health Insurance Portability and Accountability Act). After getting a good understanding of the customer’s compliance needs, the systems integrator shows how it can solve the problem. “We’ll talk to them about how we can set up their network to track every device accessing or exiting the network, and we’ll explain why a certain level of encryption is necessary to keep unauthorized users off their network,” says Giangano. “It’s not until several meetings later, after we’ve built the customer’s confidence in our capabilities that we start probing into additional business needs.” At the next stage, network assessments and technologies such as VoIP are discussed. Then, only after several business needs are uncovered, does Juma Technology present the case for convergence. For example, after understanding a law firm customer’s need to capture billable minutes from clients calling into its office, Juma Technology explained how migrating the law firm’s phone system to VoIP and integrating its voice application and CRM (customer relationship management) system could solve the problem.

Taking a consultative approach to selling eliminates most customer objections about the cost of Juma Technology’s products and services. In fact, the biggest obstacles it has to overcome are networking errors a previous VAR/system integrator created on the customer’s network. “One of the most common problems we uncover is that the LAN was improperly configured to handle full duplex communications, which are necessary for running voice packets on a data network,” says Fuccillo. “Usually we find the cause of the error is that one network device was set to autorecognize other devices on the network instead of being programmed to accept two-way traffic from other network appliances.”

Juma Technology’s transition to becoming a convergence expert has been affirmed in many ways, but one of the most important to Giangano and Fuccillo has been the absence of finger pointing among its engineers when installation problems arise. Many VARs/systems integrators might not work as hard after experiencing the level of success Juma Technology has in the past year and a half. But, if there’s one thing that you can count on about Giangano and Fuccillo, it’s the fact they realize that the technology that’s hot today will become a commodity offering in the future. To keep from becoming marginalized, Juma Technology expanded its business into wireless (see sidebar on this page) and physical security (see sidebar on page 34) within the past year, and it’s already projecting more than $7.5 million in sales from these technologies in 2007.