Business Intelligence - NextiraOne Takes Convergence to the Next Level

NextiraOne is reinventing itself. Traditionally a phone and data equipment integrator, the company now is looking at providing professional and managed services. Larry Underwood recently was appointed to head up the initiative as national vice president of managed and professional services. He talked with T@G in June about NextiraOne’s new focus on convergence. NextiraOne funnels its products and services through VARs and systems integrators, and also is a channel partner for Cisco Systems Inc. and Nortel Networks Ltd.

The value proposition is that as convergence hits the enterprise, that organization has a set of services and capabilities, but it’s all centered on a TDM set of solutions. So our managed service offer is targeted at helping leverage our core understanding of the TDM environment and help bridge it given our expertise and experience in the area of convergence with voice over IP and IP telephony and IP-enabled TDM solutions.

That is the direct value proposition to the enterprise and, interestingly enough, to the VARs and systems integrators. The one thing they never really had in-house and the one thing they always partnered for was to deliver part of or all of the TDM voice-managed service. And that’s how they have become some of our largest channels. My top three customers are either SIs or the SI arms of carriers.

For the VAR, who has a lot of the same capabilities that we do, what we provide for them is the expertise that they don’t have and, also, we fulfill footprint gaps. Most of the VARs that we have relationships with are super-regional and don’t have a national fulfillment capability, and we do.

We do not have any revenue-sharing arrangements. There needs to be one contracted entity and it’s really hard when you are not the contracted entity. If we were in a joint venture, it would be easier to build the case for a revenue-sharing model.

Because of our scale, our infrastructure and costs are a lot lower than others and we are able to put together a very cost-effective solution that makes it work for [channel partners]. And, systems integrators don’t make their money on resale. They don’t resell our service. What they do is they negotiate and aggregate on behalf of the client, and they make their money on program management and fees and commitments on how they are going to help an enterprise transform or save them money through consolidation. We’re a logical partner that can offer some of those price and cost performance advantages to the systems integrator.

Our value proposition to the VAR is not as significant as it is to the systems integrator. Because, in that case, it does become basically a direct resale and you’ve got to be concerned about margin-stacking. But at the same time, it’s a matter of them looking at variablizing their cost, versus having to build the infrastructure to support maybe 10 or 15 or 20 percent of a contract, and then being willing to take a lower margin on one smaller piece if they can blend it with a more strategic piece of business. They look at a relationship with us as a way to solidify a client relationship that they have that if they cannot fulfill they are going to put the client relationship at risk.

Each one of them [is] looking for some level of design and consulting assistance … all the way through technology planning through basic design implementation and ongoing optimization. So, across the entire service spectrum at the higher end, we have yet to engage a client who doesn’t have some qualified need.

It’s a tremendous opportunity and it’s the reason why we are retooling NextiraOne into a higher-end professional services organization from our traditional roots, which is as a telephony and data equipment integrator.