From VAR to VoIP Provider

This company has parlayed its skill with Cisco and Microsoft products into a new VoIP-based business.

by Alex Goldman ISP-Planet Managing Editor [November 16, 2007]

San Francisco, Calif.-based business VoIP provider CallTower fits in a specific niche. Across the U.S., there are several local and regional VoIP providers focused on serving small business customers. Similar companies include Louisville, Ky.-based Smoothstone and New York, N.Y.-based M5 Networks.

This is not a company to buy from or sell to but one whose business model repays careful study. It's doing interesting, new things, and you can too.

We reach Mark Harris, executive vice president of sales and marketing. He says the company, founded in January of 2002, has less than 10,000 seats. Customers range from small up to 400 and the company is actively courting larger customers. He sees his company as small in its new business environment, but compared to other VARs, the business its founder, Kelli Law, left, it's a massive operation.

Skills
Law's main skill is the creation and deployment of middleware to help Cisco and Microsoft products work together, Harris explains. He says the company delivers the features and reliability of trusted solutions. So if the customer doesn't recognize the CallTower name, do Cisco and Microsoft help you get through the door? Absolutely, he replies. "Our larger sales may not know us but they do know the product."

More recently, the company has broadened its offering beyond VoIP to cover unified communications, a suite of services that you're familiar with (voice mail through e-mail, e-mail read to you over the phone, and much more). These are services that may be new to customers.

"Last year, actually, the end of 2005, Microsoft released Communications Server," says Harris. "It has secure instant messaging and has hooks to integrate that into telephony. We developed and launched our live communications product in three months in 2006."

The company now provides a complete communications solution, including bandwidth provided by the usual suspects (XO, Level 3, etc.).

Services
As ISPs and VARs grow, they develop services targeted at specific types of customers. Harris says that CallTower doesn't target one specific vertical but that he has a clear idea of what kind of company can take full advantage of all of its services. "Generally speaking, at this point, our customers are a certain size (usually over 20 users), have multiple locations (especially in different states because in that case they have higher interoffice phone bills), and have communications workers, knowledge works, or customer support.

A hosted call center offering is obviously a good fit. "Probably 15 percent of our customers use the hosted call center. They are, say, a 100 person company with 12 people in customer support."

Not every opportunity translates into a service. "The sales part of me would like to add stuff all the time, but we've got limited resources and we have to make sure that we do, we do well. One very complicated thing we do is the provisioning piece. The customer's administrator can go online and give a new hire an Exchange mailbox and [Cisco powered] call center functionality and have all that hit their bill at the end of the month without intervention. Customers don't understand how hard that is. The telco piece is very hard. I tell our customers that if any business besides telecoms provided this level of service they'd be out of business. Our customers find our level of service a breath of fresh air."

Growth
The company has offices in San Francisco (California); Oklahoma City (Oklahoma); and South Jordan, Utah. CallTower acquired a company called Voice3g in Oklahoma City for its voice messaging system and now has offices there. Although most of the company's customers come from its local regions, it has customers in many of the 48 mainland states.

Managing growth is important. At ISPCON, speakers reminded attendees to spend time with your customers to make sure they're happy, and Harris says CallTower has just launched a formal program to do that. "We hired a director of customer advocacy to call customers and to re-present our solution to them after they've bought it."

One reason customers disparage VoIP offerings is that they don't know how to use the features. It is therefore vital that every company that offers VoIP services checks in on customers to make sure they're getting as much out of the solution as they can.

One path to growth for a small company is through partnerships. CallTower has a VAR-focused channel, helping outside IT managers offer unified communications to customers.

All of these tools make it likely that this company will grow. And if there is no company like it in your area, check your own skills toolset to see whether you could become your local small business VoIP provider.

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