[Asterisk-biz] Asterisk for small businesses.

[John gerlich]

When was the last time you bought bottled water? 

I have had a number of companies over the years and have always been the
high price provider. It has nothing to do with cost but with perceived
value.

Let others be the low priced product. They will go out of business providing
service for which they will not be compensated. It is far better to have
fewer customers generating the same revenue. The hand holding is the same no
matter what the price is. 

-----Original Message-----
From: asterisk-biz-bounces at lists.digium.com
[mailto:asterisk-biz-bounces at lists.digium.com] On Behalf Of Alex Pui
Sent: Thursday, February 17, 2005 12:37 PM
To: jim at vanmeggelen.ca; 'Commercial and Business-Oriented Asterisk
Discussion'
Subject: RE: [Asterisk-biz] Asterisk for small businesses.

Jim,

I thanks for your time for the feedback which is very educational. I still
have a question : If Asterisk is an entity, your strategy to sell value not
to compete on cost, might make sense, but since it is not, everyone can sell
Asterisk at any cost they want, your strategy is no way to implement and
this is the current problem we have.

Air is most valuable element for our life, but since it is free, nobody can
make money on it....well may be in 20 years time, we can sell clear air.

Alex
-----Original Message-----
From: Jim Van Meggelen [mailto:jim at vanmeggelen.ca] 
Sent: February 17, 2005 9:05 AM
To: alex.pui at act-labs.com; 'Commercial and Business-Oriented Asterisk
Discussion'
Subject: RE: [Asterisk-biz] Asterisk for small businesses.

Alex Pui wrote:
> Jim,
> 
> I totally agree with what you said here. I guess we need to
> find out what are Asterisk problems at this point of time and
> we can work together to solve it. In my experience it is not
> much a "product" problem, it is a "productization" problem.

Actually, there are already too many telecom "products" on the market.
Trying to turn Asterisk into yet another one strikes me as a tactical
error. Asterisk changes the rules; disguising it as another legacy
system doesn't strike me as serving any purpose.

> To learn how to install Asterisk is fun, but to use Asterisk
> to make money it is difficult, problems are : 1. There is no
> perceived value as a total solution or package at the right
> size. Unless we can build such value perception for the
> customers in the mass market, that is people can easily
> compare a Cisco model with Asterisk and then they can compare
> how much they will have to pay for Cisco and now how "Less"
> they need to pay for Asterisk consultant and also the
> benefits, we will have no point to say we charge $60 or $100
> per hour as nobody can link the cost and the value together.

For my customers, the fact that it is _not_ a Cisco or Nortel and is a
Linux-based open source technology has huge value. They completely
understand the fact that Linux doesn't come encumbered with vendor-lock
in. I had thought there would be more resistance, but the only
resistance I've seen comes from the old-school telecom folks, who seem
to think that a revolution happens when you don't change anything.

Asterisk _does_ require a more complicated sales cycle, but where I
think we may make a mistake is when we position it as "cheaper". Sure,
we can be extremely competitive due to the commodity hardware and
software we use, but some of that cost difference needs to go into the
custom development required.

Putting Asterisk into a box and then selling that box is a mistake.
Asterisk needs to be sold as a service. That means that the
hardware/software is irrelevant. What is sold is the fact that whatever
the customer wants can be delivered (what seems so self evident is
actually huge - no other telecom system can make this claim). The value
comes from outstanding customer service. Asterisk solutions need to be
priced high enough that there is money available to provide superior
service. Customer service is sadly lacking in the telecom industry, and
is therefore a huge opportunity (it always was, in any business).

Asterisk should not be sold as a cheap system; it should be sold as a
technically superior way to engineer telecom systems. It is not "free"
and I would argue that it is not necessarily a compelling sales strategy
to tell customers that it is (I'm not talking about hiding the fact that
it's GPL, I'm talking about focusing on the value of the solution, not
the price of the components).

Let's look at a hypothetical $20,000 VoIP-enabled legacy key system
with, say 20 sets.

Each character represents $500
# represents hardware cost
+ represents licensing of "extra" features (including voicemail)
^ represents sets
! represents labour

The Legacy, proprietary "solution"
##########+++++++^^^^^^^^^^!!!=========

The Asterisk solution
####^^^^^^^^^^^^^!!!!!!======

With twice as much labour in the job, and more expensive sets, there is
a similar margin, and yet you can go as much as 25% lower (and I
wouldn't start $5000 cheaper either - especially if the Asterisk solves
problems the proprietary system cannot - a 10% difference might be
compelling enough). If your competition matches your price, they lose
money.

This is very raw, but what I'm hoping to demonstrate is the concept that
the savings due to the commodity hardware and software allow for more
labour to go into the customized development. This is service!

Having worked with many different kinds of PBXs, I do not find the
configuration process in Asterisk to be complicated at all. A skilled
craftsperson should be able to program an Asterisk system in roughly the
same time as it takes to build an equivalent proprietary system. 


> 2. The education process to customers are killing. Yes, open
> source is free, knowledge to set up the system is not, and
> the cost of education to the customer about this knowledge
> will kill most of our business.

If you do not base your price on your costs, then yes. But yhy are you
trying to teach your customer about Asterisk? They probably don't care.
Sell them on how you can solve their problems.

> Therefore we need to work together to solve these problems
> (or some other problems if you want to share) then we can
> fly. There are not much successful cases we are hiding,
> Asterisk business is a lot of fun and attractive but not that
> profitable unless someone wants to correct me.

Asterisk is going to be enormously profitable. But it will never be
easy, or straightforward.

Cheers,

Jim.



> asterisk-biz-bounces at lists.digium.com wrote:
> asterisk-biz-bounces at lists.digium.com wrote:
>> Hi,
>> I'm looking in to the possibility of starting to sell a small
>> Asterisk installation in to one or two small businesses to test the
>> waters in my area, north west UK.
>> 
>> Are others doing similar things on a small scale? I currently do not
>> have a lot of investment to  plough in to this business at the moment
>> so things would have to be done within my current financial
>> constraints. I have a full time job at present which I plan to leave
>> in 8 months time if all goes to plan.
>> 
>> Now I realise people are not going to disclose their business winning
>> secrets but I'd welcome any friendly advise from others who have done
>> this or are doing it at present.
>> 
>> (I have linux/unix experience going back to 1992 but only about 3
>> months * experience, with a server at home running 2 analogue lines
>> and 4 extensions.)
> 
> As far as I'm concerned, open-source telephony is going to
> turn the world of enterprise telecom on it's ear. I've worked
> in that business for over 15 years, on equipment and networks
> of all shapes and sizes, and I've never seen anything like Asterisk.
> 
> This is extremely disruptive technology, in the same way the
> IBM PC was in the early 80s, or Linux through the 90s.
> 
> Check out this article for some thought-provoking ideas on the future:
> 
> http://tim.oreilly.com/articles/paradigmshift_0504.html
> 
> When I talk to customers, the amount of hate they have for
> the likes of Cisco, Nortel, Avaya and such is shocking. The
> horrible service they have come to expect from their telecom
> providers is hard to believe. The problem, as I see it, is
> that the technology that exists simply does not allow service
> providers to truly solve their customers' communication
> challenges. It's too closed. Too proprietary. Too inflexible.
> 
> Asterisk in and of itself does nothing. But the service that
> can be provided to one's customers, using Asterisk, is
> approaching miraculous. Even as raw as it is, Asterisk is
> amazing. This is so much like the evolution of the web. We
> started with text-based browsers, then Mosaic made it all
> graphical. Now, we have a billion different ways of making
> websites, and each site is a total custom job. This is the
> potential of open-source telephony. Will Asterisk still be
> the dominant engine in ten years? We just don't know. but
> rest assured that whatever succeeds it will be better, not
> worse. And the chances of it coming out of the labs at any of
> the telecom giants is zero. It's going to take them a few
> years just to get it, never mind provide a response. Some
> will go bankrupt, those that survive will embrace the new
> paradigm (the idea of IBM, Novell and the like embracing
> Linux even five years ago was ridiculous).
> 
> Just don't expect it to be easy. This is a revolution! (a
> real one this time). The industry will begin to attack
> Asterisk soon. Expect to see much FUD coming from the big
> boys, just as soon as they perceive the threat, 'cause FUD is
> all they've got.
> 
> To parapharse Ghandi: "First they laugh at you, then they
> fight you, then you win"
> 
> Cheers,
> 
> Jim.
> 
> 
> --
> Jim Van Meggelen
> jim at vanmeggelen.ca


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