[Asterisk-biz] Asterisk for small businesses.

[Jim Van Meggelen]

> 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.

You're telling me that someone can beat me on an Asterisk solution if
they just come in at a better price? If that's how you get beat, you're
not selling the value of your solution very well. 

I've seen it in the interconnect industry. The guys that sell systems
for too low a price can't afford to provide quality service. The
customer ends up hating them. Result? No repeat business, no referrals.
Win the battle, lose the war.

> 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.

Really? Then perhaps you can explain the following:

Air purifiers, air fresheners, air quality analysis, air conditioners,
air compressors, air Nikes.

There is an incredible number of industries that focus on adding value
to air. Because the air is free, and everyone understands it, the
opportunities are huge.

Water is the same way. Why would I want to pay for a bottle of water,
when all I have to do is stick my face in a puddle? The answer, for me,
is that I don't mind paying for packaging, quality and service,
regardless of whether the product I am being sold could be obtained for
free elsewhere.



> 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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