Posts Tagged ‘TELCO’

Differentiation critical in commodity markets

January 8, 2018

Any business that supplies a product or service that cannot be differentiated against its competitors is at risk of being undercut and thereby losing its customers.

Environmental and Ambient Data

Commodity markets, such as electricity and other energy types are particularly exposed to price cutting, due to the fact that no matter which supplier a customer chooses, the end product, or service, is essentially the same. Sometimes there is a small difference in service or product quality, but often that is not a strong enough argument to compete against a lower price.

The stark choice that businesses in commodity markets face in order to compete, is between cutting prices or finding a point of difference that will motivate customers to choose them over a lower priced competitor.  Cutting prices leads to price wars with competitors and a downward spiral to the bottom, so differentiation has to be the preferable option over price cutting.

In the New Zealand electricity market, Trustpower has proven that bundling electricity with broadband and/or telephony services together in a single offering makes a very compelling proposition to customers. It is also very difficult for other electricity (or broadband) suppliers to compete with, unless they can also provide the same bundled services – which most don’t.

How can you compare the price of an apple with the price of an apple and an orange?

Trustpower’s leadership position in bundling electricity and broadband has been exceptionally successful in the New Zealand market and we are now seeing other suppliers starting to follow in their footsteps.

Another successful point of differentiation is locality.  In the New Zealand region of Taranaki (known fondly as “The Naki”), local managed service provider “NakiCloud” prides itself as being the local guys, who sport Taranaki’s famous black and yellow colors.  NakiCloud (and their sister company “Speedster”) offer locals the same products and services as the big guys in Auckland, but when things go wrong they are there on the spot to help, which is far preferable to the locals than spending hours on the help queue for one of the bigger providers.   This point of differentiation is working exceptionally well for NakiCloud in the Taranaki region.

In a reversal of Trustpower’s bundling, NakiCloud is in the process of bundling electricity with their current offerings, thereby adding a further point of difference for their customers – as well as an increased revenue stream from their existing customer base.

This bundling is facilitated by NakiCloud’s use of the Datagate billing portal, which can combine telecommunications services, data services and electricity on the same invoices to their customers.

In my role as CEO of Datagate Innovation, I see that a big part of our purpose is helping our clients differentiate their service offerings through various means, including bundling different services from a multitude of suppliers, improved information flows with our clients’ customers and superior invoice & data presentations.

As they say…“Differentiate or Die”.




The Age of the IT Service Re-seller

December 19, 2017

New business models appear as the technology landscape evolves.  Most of the sales and service companies within the ICT sector have now evolved into service re-sellers, or service aggregators.  This is a direct result of the Internet and Cloud computing.

Inspiring productivity with a wealth of technology

Businesses today have access to a huge range of cost-effective, scale-able, public-cloud computing and communication resources, available on subscription or usage-based pricing plans that can scale along with business growth and demand. “Everything as a Service”.

What do businesses need to make productive use of all this readily available ICT resource?

Most businesses need external expertise and support to provide a service layer over the top of these on-line resources to produce functional business solutions that perform correctly for the business’ requirements.

This service layer of expertise and support is typically provided by Managed Service Providers (MSPs) and in some cases, Value-Added Re-sellers (VARs) that focus on particular business applications, such as ERP or accounting software, CRM solutions, communications, inventory or production solutions.

MSPs and VARs typically have a good understanding of  their customers’ business models, workflows and processes. They are able to recommend, advise on, design and sell business solutions to suit the customer’s business requirements. These solutions are often hybrid, meaning that some parts of the solution might be their own services, while other parts may be on-line services wholesaled by other suppliers.

Convergence of IT and communications (computers and phones have merged) means that IT-focused MSPs are now being looked upon to provide voice solutions, such as VoIP, virtual PBX and mobile along with data and connectivity services.  We are even seeing electricity sales converging with telephony, to add to the mix.

Businesses customers are showing a clear preference for simplicity and buying their ICT and on-line services from a single supplier, who can be held accountable for their entire technology framework, including voice and data connectivity – maybe even electricity as well.

What is the biggest challenge for MSPs re-selling services and hybrid solutions?

The biggest challenge of the Service Re-seller is to combine a collection of services from any number of suppliers (both internal and external) and then bundle, price and present it all to the customer in the most simple and easily understandable form – a single bill. This is no easy task because often the services involved have a different pricing basis, different display requirements, different suppliers and may need to all be bundled together on the same invoice.

Billing of voice and mobile services is already complex, let alone when it is combined or bundled with other types of services.

What solutions are available to help service re-sellers manage the complexity of combining multiple services?

A new generation of Cloud-based billing solutions, such as Datagate, is designed to simplify and automate the job of combining, rating and billing different types of services from any number of suppliers. Datagate will also present usage data and invoices to end-customers via a white-label, end-user portal. It also integrates with most common accounting or ERP systems, such as Xero, Quickbooks, MYOB, SAP, Sage, Microsoft and others, meaning invoices get passed through to the re-seller’s accounting system, without the need for any re-keying.

Where is this all heading?

Worldwide, across so many industry sectors, there is a growing trend towards subscribing to services and paying based on usage of those services. This behavior is being driven by the dominance of the Internet (or Cloud), which itself has a predominantly service-based business model.

Service re-sellers are the way of the future!



Why “owning” the customer relationship is so important for service re-sellers

November 15, 2017

Sales and billing models have been top of mind for me recently, particularly as Datagate is in the process of expanding into the North American market and getting an understanding the dynamics of the service re-sellers and vendors who operate there.


In the ICT industry – in particular, business computing and communications – we have seen a huge shift towards the “as-a-Service” model and a shift away from the earlier model of selling hardware and desktop software solutions.  This has brought about what we refer to as the age of the service re-seller.  Service re-sellers are everywhere at this time – you just need to know how to recognize them.

Service Re-sellers

Within the ICT industry, service re-sellers are businesses that sell on-line services that are built, owned and supplied by another another party – a service vendor.  Typically in the ICT Industry,  service re-seller are Managed Service Providers (MSPs), Business Solution Providers, Value-Added Re-sellers (VARs) and Telecommunications specialists.

Often, service re-sellers have the advantage of being able to offer a closer, more personalized service than what the large service vendors can offer. MSPs can often position themselves as a single point of contact for all ICT services to their end-customers. Service re-sellers will often combine and bundle services together from different vendors to create unique value offerings – which are more difficult for competitors to displace.

With any online service sold by re-sellers, such as cloud solutions, telecommunication and data services there are a number of different marketing, sales, billing and support models that are possible.  Each is model is significant as to who “owns” the customer relationship.

Who “owns” the customer relationship?

Any relationship has at least two parties and obviously the customer owns one side of the relationship.  But on the the other side, the ongoing supplier relationship; who “owns” it will depend on who controls it and who is more visible to and engaged with the customer.  Most important is the flow of money; who bills the customer and under what brand?

If the re-seller sells, bills and supports the service under the re-seller’s brand and also holds the supply agreement with the customer, then clearly the re-seller fronts and owns the supplier side of the customer relationship.  If the re-seller allows the service vendor to perform any of these functions under the vendor’s brand (particularly billing and the flow of money), then it cannot be said that the re-seller owns the relationship.  If the service vendor performs all or nearly all of these functions under their brand, then the service vendor owns the relationship.

Why is owning the customer relationship so important?

The “owner” ultimately gets the most business value from customer relationship, in terms of control of the service and also the boost in valuation of their own business.

If the re-seller is the relationship owner, then the re-seller has more power in negotiations with service vendors and is often able to change or re-negotiate service contracts or change vendors in the background to the customer relationship.

Business valuations are most often calculated on multiples of revenue.  Locked-in monthly recurring revenue  (MRR), such as what you have with contracted on-line services, is valued significantly higher than other types of revenue.  This is because MRR is the best quality revenue – in that it is regular, ongoing and largely predictable – a solid cash platform for building valuable businesses on.

How to own customer relationships in the service re-selling model

For a service re-seller to “own” a service relationship (such as telecoms, Cloud software & services etc), those services must be named, billed and supported under the re-seller’s name and/or brand.

This typically requires a white-label service-billing solution, such as Datagate that can plug into usage data supplied by service vendors, apply pricing plans created by the re-seller and the automatically create & distribute re-seller-branded bills to the end-customers.  Datagate also provides re-seller branded portals where the end-customer can view invoices, reports and analysis of their service consumption.

Datagate’s mission is to enable service re-sellers (who are typically MSPs in the ICT industry) to maximize the value of their business and “own” their customer relationships in the areas of telephony and other on-line utility services.

We are also committed to helping service vendors maximize their sales channel growth through service re-sellers.



MSPs are Trusted Advisers, Solution Aggregators

October 9, 2017

The ever-increasing economy of scale of the Cloud is driving the business computing world towards fewer, larger vendors offering massively scale-able public-cloud platform services, while at the same time also driving a trend towards tighter specialization of on-line applications (“Apps”) that work together to provide integrated business solutions.

Computer media and internet communication concept

The role of the MSP (Managed Service Provider) is evolving towards the following areas;

  • Providing strategic advice and planning for business IT and communication requirements. Helping clients decide on what technologies, platforms and applications are best suited for their needs and which will work together in a coordinated, integrated solution set.
  • Brokering Cloud services – aggregating solutions.  Sourcing, acquiring, integrating and optimizing applications and services to build cohesive, well integrated and economic business solutions.
  • Management, optimization and support of business applications, services and platforms; regardless of where they are located – public or private Cloud.
  • More focus on business processes and the solutions required to support them.
  • Recognizing new adjacent sales and service opportunities, in order to provide more value to clients and thereby maximize potential revenue per client.  For example, many MSPs have recognized that the convergence of phones and computers means that MSPs can extend to providing VoIP, broadband and other traditional telco solutions to their clients – becoming a single point of supply and support – which is increasingly attractive to end-customers.

MSPs are well suited to the role of trusted adviser and solution aggregator, because they typically have a much closer relationship and understanding of their clients’ business processes than the larger telcos, application developers and public cloud providers.

The challenge to MSPs is to recognize and lock in these new recurring revenue services whilst maintaining their own brand & identity, gaining differentiation & competitive advantage – and also keeping their own business complexity down to a minimum.

This is where white-label, cloud billing systems such as Datagate, capable of billing numerous telco & utility services on a single MSP-branded invoice and end-user portal are ideal.  The services, no-matter where they are sourced, appear together on the invoice and portal under the same MSP branding, thereby minimizing complexity and maximizing MSP brand exposure to the end-client.

MSPs that evolve and adapt to this new service-based, knowledge-based environment will be those that lead and win.  Recognizing, locking in and monetizing new adjacent opportunities is key to this success.

Paradox of the Telecom Sector

August 20, 2017

The telecom sector is facing a paradoxical mix of circumstances. On one hand it provides the mission-critical technology platform for innovation, growth and disruption across nearly every industry; whilst on the other hand, it faces enormous changes and disruptions to its own traditional business model and revenue streams, more so than perhaps any other sector.

Furthermore, the average revenue per user, across the entire global telecom industry, is falling every year.


The telecom sector provides the platform for innovation and disruption across nearly every industry, yet faces the challenge of innovation and disruption itself, perhaps more so than any other sector.

Incumbent telecom providers need not be the victims of disruption and reducing revenues in their own industry; they can be the agents of change and disruption, by recognizing (or even creating) shifts in the market, differentiation and moving faster than their competitors to meet the new market dynamics.

Recognition of new trends, agility and speed of execution are critical factors. Reinventing business models, bringing new offerings and services to market must be done in quick time.  A major factor, once new offerings are selected, is how quickly billing systems can be adapted to facilitate new offerings, bundles with new services and pricing plans. Billing is so often the Achilles heel in the telecom world.

Differentiation between Telecom providers can be achieved by bundling complementary or value-adding services or offerings with standard telecom services. This can often be achieved through partnerships with service providers outside the traditional telecom sector.

A significant disruption (or opportunity) for the telecoms sector is its convergence with other on-line service providers.  Telecom services are now being successfully integrated and sold by the I.T. industry, managed service providers (MSPs) and other service sales businesses. Electricity companies are bundling telecom services such as broadband with their offerings. Cloud software businesses are also selling and bundling telecom services.  Phones and computers are now one and the same.

Billing is so often the Achilles heal in the telecom world.

Bundling different yet complementary service types under a single pricing plan, on a single invoice makes it more difficult for competitors to undercut pricing with only a single service type. Service bundling is said to make telecom customers more “sticky” and provide differentiation.

Rather than competing with and resisting new convergent players in the sector, some telecom providers are actively embracing and pro-actively driving this convergence. A prime example in New Zealand, is Spark Wholesale that offers a range of telecom services to its clients, to enable them to sell telecom services under their own branding, giving Spark access to more customers and markets that it might not otherwise be able to reach.

Wholesale telecom providers enable service businesses, such as Managed Service Providers (MSPs) – who have trusted adviser status with their customers, to market and sell telecom services such as broadband, SIP, VoIP and mobile offerings to predominantly business customers.

Telecom resellers require specialized automated usage-billing solutions. Datagate is an agile, white-label, cloud-based billing solution which partners with Wholesale Telcos to get new telecom re-sellers up and running quickly, with billing functionality that integrates with the Telco’s usage data to rate, produce and distribute invoices to their end customers. Datagate can connect to and bill most usage-based services and make it easy for convergent bundling of service types, where multiple service types are combined on a single invoice.

Embracing new business models, new offerings, partnerships, agility and speed to market are the key requirements for success in the telecom sector of this new disruptive, paradoxical world.

Dimension Data successfully brings telco services to NZ clients, with Datagate

May 10, 2017


This week at Datagate, we published a case study detailing our successful partnership with Dimension Data New Zealand and Spark Wholesale, in bringing a full telco service offering to Dimension Data’s clients.

Dimension Data New Zealand is part of  the wider Dimension Data group, which has revenues of over US$7.5 billion, staff of over 31,000, offices in 58 countries and is a member of the NTT Group.  Dimension Data’s clients include some of the largest organisations in New Zealand, with typically hundreds or thousands of staff.

From Datagate’s perspective, it’s great to see that larger customers, like those of Dimension Data’s, are showing a preference for sourcing their IT and telephony from the same trusted supplier.  We have also seen this trend in the SME market, so we can now say that business customers of all sizes are receptive to having a single trusted supplier for all their ICT services.  It stands to reason, as phones and computers have converged and it is clearly preferable for one supplier take sole responsibility for the performance of the complete picture.


“Businesses prefer to deal with one supplier across all services, which are becoming more intertwined and harder to differentiate” says Dimension Data’s Shaun Bell.

Enabling IT companies, or Managed Service Providers (MSPs) of all sizes to become re-sellers of telephony services, by using our Cloud-based billing and reporting platform, is a big part of what we do at Datagate.  It’s great to be a part of Dimension Data’s success story and we look forward to continuing to work and innovate with Dimension Data New Zealand.

MSPs champion Telco sales

April 3, 2017

Managed Service Providers (MSPs) are making major gains in the business and government telephony markets, as customers show a clear preference to buy their IT and telephony services from a single source.  This stands to reason, as phones have become computers and computers have become phones.  The two product lines have converged, making it nonsensical to continue treating them as separate service lines.

Most of the tier-1 Telecommunications providers around the world have now established Wholesale business units to cater for “indirect sales” as they are seeing an increasing proportion of their business and government market shifting away from their own direct sales, in favour of those who have a closer relationship to – and knowledge of the target end-customer.  A sensible and logical business strategy for the Telco’s is therefore to provide a wholesale offering and pro-actively build a channel of re-sellers.   Those re-sellers are in most cases, MSPs.

Examples of Telco’s with Wholesale business units are; Spark, Telstra, Optus, TELUS and Verizon, to name a few.

A major stumbling block for MSPs moving into selling Telco services, such as VoIP, data circuits, mobile, MVNO etc is the billing process.  Telco billing can be very complex, especially in the areas of mobile, tolls, toll-free and other usage-based services.  Billing complexity and the time & effort needed to produce Telco-style billng and reporting is often the barrier to sales and success in this space. This is the problem that my company Datagate solves for re-sellers of Telco services (as outlined in this brief YouTube video).

With a suitable billing solution in place, MSPs are adding significant extra recurring revenue to their businesses, by selling and providing the data connectivity, VoIP and mobile solutions that they source from their local Wholesale Telco provider.  This is also good news for the end-customer, who gets a full-service offering from their MSP, less bills to pay and access to better analytical reports and information via an on-line portal.

Read more from the perspective of Spark Wholesale and VoIP HQ.

Datagate’s “Ecosystem-as-a-Service” Strategy

October 13, 2016

The path to value creation in business is very much about managing and balancing your tactical everyday decisions with the strategic big picture of where you are heading.

A year ago, I took on the CEO role at Datagate, an exciting fin-tech start-up, after spending over a decade as CEO of a larger business group. In an early-stage business, this balance between tactical and strategic is even more critical, because your decisions will shape the nature of your business for (hopefully) many years to come.

Datagate as a business and a Cloud service, can (like many technology businesses) be described at both a tactical level and a strategic level;

Datagate at a Tactical Level; Datagate is a white-label, Cloud-based billing and reporting portal for service resellers. We connect to all sorts of different service usage data (mainly from Telco’s, Electricity companies and Cloud services) from which we produce invoices, reports and customer portals for resellers of those services and their customers.


Datagate at a Strategic Level; Datagate is an “Ecosystem-as-a-Service”. We are building our base of service resellers and our base of service suppliers and enabling them to work through each other to strengthen their business reach and profitability. As we add more resellers and suppliers, the strategic value of our ecosystem increases dramatically.

  • We are strategic to our service resellers because we enable them to sell a range of services from a range of suppliers and combine or bundle them on to a single offering and/or a single invoice. For example we enable Telco resellers to sell Telephony combined with Electricity.
  • We are strategic to our service suppliers because we enable them to sell through our channel of resellers, who all use the Datagate billing portal.


On a day-to-day basis it’s easy to get entrenched in the important but tactical demands of your business, such signing up deals, building revenue etc, but it’s important to keep in mind where it’s all heading. Do the suppliers, deals and customers you’re signing up fit with your strategic long-term view of the business? In my case, Datagate is building a valuable ecosystem through our product and the partners we sign up – and that value will become more self-evident as the business grows.

At the start it is a visualization, but over time it becomes a reality.

Five changes in the market that underpin the value of Datagate

May 18, 2016

I get asked why I stood down from my role as CEO of Enprise Group and diverted my focus and investment to Datagate, which at the time, was the newest and smallest of Enprise’s businesses.

I did this because I recognised the very strong demand for Datagate by companies that sell IT, Telco and/or Utility services, driven by five big changes that are happening right now in the marketplace, as listed below;

  1. The rapid rise of Cloud computing is leading IT Companies of all sizes to shift their business models towards selling services (instead of selling hardware). Subscription service revenue instead of product sales revenue. For IT Companies, this has progressed through selling data circuits, Internet connects and on to SIP / VOIP Telephony. Datagate makes this type of subscription billing easy.
  2. Computers and Phones have become one and the same. Businesses of all sizes are deciding that one supplier is preferable to provide their IT and Telecommunications services, because the technologies have merged. A relationship with fewer service suppliers is easier and less expensive to manage, whereas having more suppliers is more complex and costly to manage. Datagate enables resellers to aggregate multiple service types such as Telco and IT services in their billing and portal services.
  3. Power companies are starting to sell broadband successfully. At the reseller level, we are starting to see an emerging pattern of convergence between electricity and telephony (at least at the broadband level at this stage). Telephony & IT resellers are interested in selling electricity to their customer bases – essentially it’s just another on-line service to add to data services. Electricity companies are interested in selling broadband and other Telco products. Datagate provides billing and portal services that can combine different services types, such as Telco and electricity.
  4. Billing of telephony and electricity is complex. A product like Datagate is needed to make this billing easy. Furthermore, it’s even more complex when you try to mix different service types. Standard accounting and billing systems cannot handle this complexity efficiently. A specialised product, such as Datagate is required.
  5. Further to billing, customers’ service expectations are increasing. They expect immediate on-line access to their bills and reports analysing their consumption of services. The large established electricity and telco vendors all offer on-line analytical portals and so have already set the market expectation. Resellers of these services therefore need to offer similar on-line portals. This requirement becomes more complex when the reseller is selling a combination of services, such as electricity and telephony. Datagate is built to handle this requirement.

Datagate exists to help IT, Telco & Utility resellers capitalize on the opportunities that these changes in the market are driving.

We are experiencing fast uptake of Datagate by resellers in the New Zealand market and we plan to take Datagate to overseas markets, where the same market changes are happening, in the very near future!

The Convergence of IT, Telecommunications and Electricity

October 14, 2015


This is a time of great opportunity and also great risk of disruption, for businesses working in the fields of IT services, Telephony and Electricity.  Each of these three industries on their own are under increasing margin-pressure, because each industry can be seen to lack a great deal of differentiation.  All can now be classified as on-line infrastructure services. Phones are computers, computers can be phones – all require a network and electricity to operate.  Increasingly, all must work together to provide a working platform for the common customer.

The needs of the market, the customers, will ultimately drive the outcome of who wins and who loses.  The market favours those who are efficient, those that have the best understanding of the customer’s needs, those who adapt, those who offer the best service, those who are easiest and least costly to deal with.

Increasingly we are seeing the rise of businesses who offer combined IT and telephony services. These are now intertwined services, where phones and computers share the same networks, Internet connections and infrastructure,  They are now very much one and the same.  The technology of both has converged.  Furthermore, the sales process and the customer relationship are now the same. It no longer makes sense for the customer to source telephony and IT from different suppliers.

Now add the supply of electricity to the mix of IT and Telephony.  It’s a logical addition – another on-line service. It can leverage the same sales process and the same customer relationship as IT and Telephony. Companies that provide all three of these services to their customers, can offer a better, more complete offering, while at the same time getting maximum return on their sales and on-going relationship effort.

This convergence of on-line services, is the reason why I’m so convinced that my new company Datagate is on the right path.  Datagate is a white-label, Cloud-based billing engine and customer service portal for companies that sell services including Telephony, Electricity, Hosting, IT services and other utility services.  Datagate produces a single unified bill for the end customer that includes all subscribed services and lets them review and analyse their bills and consumption of services in their own private on-line portal.

Datagate is rapidly building a base of on-line service re-sellers, covering IT, Telephony, Electricity and other services, enabling these businesses to pick and choose the services they want to sell and allow them to create their own bundles and pricing plans.

Convergence is a great creator of business opportunities …and also a great disruptor.