Bookshelves are not disappearing from homes as predicted and LP records are enjoying a massive resurgence. Why? Because people still like the look and feel of a book and the sound quality that vinyl offers is unbeatable.
Tony Cook shares this philosophy when it comes to the minutes versus services revenue debate. Although the managing director of Union Street – the UK’s largest and most successful billing solutions provider – is leading the march into the Cloud and on-line process driven billing for his 600-plus reseller partner base, he still believes there’s life left in traditional minutes revenue models.
“Things have changed a lot over the past few years, although, when it comes to minutes, perhaps not as much as you might think. The benchmarking survey we carried out recently is showing us the rush to bundle based contract agreements might have plateaued. Instead of minutes continuing to drop away, some resellers are continuing to use minutes rating as a valuable tool to boost margins. They can now buy an inclusive usage bundle from a carrier and sell it on a pence-per-minute basis to their customers and still make a healthy margin. I think there is a minutes renaissance happening now and some of the more savvy resellers are using it to their advantage.”
Cook is certainly an authority when it comes to turning minutes into money. Before founding Union Street, Cook began his career as a telecoms entrepreneur in 1994 with his first start-up, Telinet, a telecoms reseller business in Central London. “We were a traditional PBX supplier and maintainer and one of the first to move into minutes resale. We purchased a ‘Billie’ billing platform from Club Communications and got an account with Energis to supply minutes. In those days, we were mostly competing with BT and it was easy to offer very competitive rates whilst still maintaining a healthy margin.”
Telinet’s early entrance into the minute market was, in a way, the impetus for Union Street’s creation. Cook explains, “WLR presented many opportunities, but an efficient system was required to manage calls and line billing for Telinet’s customers. Unfortunately, Billie wasn’t really cutting the mustard and, finding nothing else suitable on the market, I decided the best thing to do would be to build my own. I established Union Street and recruited a small team of software developers to work on a solution.”
Having built the Telinet Group to £10 million annual turnover, in 2006, Cook accepted an offer to acquire Telinet which left him free to focus his attention on Union Street.
Cook firmly believes that when it comes to opportunities for the channel, the best has yet to come. “Over time, the communications market has become much more competitive, but it has consistently provided new opportunities for the channel. What I love about this market is the way it keeps reinventing itself with periodic waves of change. After minutes resale came the opportunity to own and resell the line plant. Wholesale Line Rental was a game changer for many resellers like Telinet and we all enjoyed successful growth over a number of years. But it doesn’t stop there, I believe today’s resellers have as big an opportunity today as those that first got into reselling minutes.
“Following the BT announcement to withdraw ISDN services in 2025, the replacement of millions of ISDN lines with IP based telephony is the biggest opportunity the channel has had in years. Resellers who can offer the right service and package will clean up. The channel can also take advantage of many other interesting revenue streams such as cloud computing, data services and M2M.”
Cook believes that for an R&D centric business like Union Street – he now has 96 staff, 35 of which are focussed on software development – the goal must be to develop solutions that enable resellers to fully capitalise on these and other emerging opportunities. His first-hand knowledge of the reseller model, has helped to shape Union Street’s market offering in this way.
Citing advances in cloud solutions as a recent example of Union Street’s success in this regard, Cook continues, “The Cloud has been a key part of our development strategy. When you look at it purely from a cost basis, moving our billing platform, aBILLity™, into our cloud environment is a no-brainer compared to keeping it on your own hardware and maintaining that environment. Initially though, people were nervous of transitioning aBILLity from on-premise to cloud deployment. This was largely due to perceived security issues and lack of control.
“We’ve gone a long way to addressing these concerns, using Azure, Microsoft’s public cloud, to build our platform from the ground up in accordance with ISO27001 standards for data security. The result is a cloud platform that not only delivers market leading performance and availability, but also offers security levels comparable to those found in the financial sector.
“In addition, we have fully automated the deployment process. It’s a SAAS implementation where we can get a new instance of aBILLity up and running in minutes.”
As a result, the acceleration to aBILLity hosted has continued apace, fuelled by nationwide educational roadshows. “Coming from a position of being an entirely on-premise solution, over 330 of our partners are now hosting their aBILLity platform in our cloud environment. We aim to increase these numbers in 2019,” says Cook.
Asked if the increasing influence of millennial buyers has in any way affected the development roadmap, Cook states, “Millennial users have different expectations for user interface usability and aesthetics. We’ve responded to this with an increased focus on user experience (UX). There’s now a whole team of people at Union Street that focus on UX and the customer journey, everything from designing screens and icons, to the number of clicks needed to get something done. The net result is that we are dramatically changing the aesthetics of the product particularly in line with the drive to the web.”
Commenting on the company’s current development goals, Cook says, “This year we are putting a lot of focus on making reseller businesses more scalable and profitable by automating their back-office processes without adding to their headcount. I can’t say much more now, but we have some big launches in the pipeline based around this.”
Cook is keen to point out that when it comes to adding value, providing comprehensive support services is just as important to Union Street as development. “One thing that has not changed over the years is that the more successful resellers tend to have good, efficient processes and revenue assurance. We have become good at supporting and helping the channel to achieve this by introduced training,