There are those who would tell you that phone systems, as a business offering, is a pond that’s already been overfished. Maybe that’s true, or maybe not. But one thing is certain: unified communications as a service (UCaaS) via the cloud is an opportunity not to be missed. In short, every business has phones and voice providers. But the current percentage of cloud migrators is ridiculously low.
This is what has Noel O’Dwyer so energized. The manager of strategic alliances for Intermedia has seen the math, which doesn’t require Sheldon Cooper to formulate. There are more than 400 million business phone users across the country, yet only 100 million have converted to the cloud. Even doing a rough estimate, the tally is somewhere south of 25%. That, O’Dwyer notes, screams opportunity for both Intermedia and its growing cadre of dealers and resellers.
In this month’s Getting to Know You profile, O’Dwyer discusses his company’s value proposition, its points of differentiation and a host of system and service upgrades that embrace artificial intelligence (AI). They all combine to help Intermedia offer tools that office technology dealers can leverage to increase customer share. And while the company doesn’t require a contract, it enjoys an extremely low churn rate, allowing dealers to bundle them with other office needs in a single monthly invoice. It all adds up to a busy signal flush with dollar signs.
Talk a little about the evolution of Intermedia and the channels it serves.
O’Dwyer: Intermedia has seen a significant evolution, especially in its engagement with the office technology dealer channel. A number of years ago, Intermedia strategically entered this market by partnering with some high-profile dealers—a move that has proven to be highly successful. More than 200 office technology dealers actively serve Intermedia solutions, highlighting the strength and growth of this channel.
The success of Intermedia in this channel is driven by two major market trends: the rise of hybrid workspaces and the widespread transition to cloud-based services. The migration of phone systems to the cloud represents a massive market opportunity. Currently, the overall market opportunity for UCaaS is estimated at $79 billion, with the market growing at an impressive rate of approximately 30% per year.
We secured our first channel dealer roughly seven years ago, and since then we’ve added a lot of big-name dealers across the country. Our partners cover everything from the small, two-person dealer to large companies with hundreds of millions in revenue. It’s going really well.
Outside of the office technology dealer channel, what are some of the other markets in which you thrive?
O’Dwyer: Health care, education and manufacturing are probably our top three. We’re seeing a lot of growth in school districts, with the need to have a more hybrid way of communicating plus integration with their email systems. Intermedia started as a Microsoft distributor for hosted exchange, and we still do that today. And with some of the dealers, they’ve been using our product without knowing it’s Intermedia.
Do you sell directly as well or exclusively through dealers?
O’Dwyer: While 90% of our business is through resellers, we also have some direct business. We’ve had a certain retail home improvement franchise almost from the very start as a direct client, but most of our new business comes from the dealer channel.
What are the core strengths of Intermedia, and what makes it unique to the cloud communications space?
O’Dwyer: Intermedia stands out due to several core strengths and unique attributes. A key strength lies in its product offerings, particularly Intermedia Unite and Intermedia Contact Center, which are enhanced with Intermedia SPARK AI. This advanced AI technology is integrated throughout the solutions, providing intelligent features that enhance user experience, streamline operations and improve overall efficiency.
Additionally, Intermedia’s partner program is another significant strength. This program is designed to be highly scalable and flexible, enabling dealers to enter the cloud communications marketplace with ease and achieve success. Intermedia offers comprehensive support across technical, marketing and sales aspects, ensuring partners have the resources they need to thrive. Importantly, the program allows for top-line monthly recurring revenue (MRR) and customer ownership, empowering dealers to maintain lifelong customer relationships while also attracting new business opportunities.
Intermedia’s partner program also provides a competitive edge. By offering a distinct solution through Intermedia’s robust product suite, dealers can secure their position in a competitive market, gaining a “seat at the table” and the ability to win new business. This unique combination of intelligent products and strong partner support makes Intermedia a leader in the cloud communications industry.
What were some of the highlights for Intermedia during 2023?
O’Dwyer: Intermedia had a remarkable 2023, during which we launched over 75 new features, including advanced AI functionalities that enhance productivity and customer service. These highlights include:
- AI Innovation: Continued evolution of Intermedia SPARK AI, which enhanced automation and insights, positioning us as a leader in cloud communications.
- Product Enhancements: Major upgrades to Intermedia Unite and Intermedia Contact Center, powered by Intermedia SPARK AI, improved performance and user experience.
- Partner Program Growth: Significant expansion of our partner program with more dealers, supported by extensive technical, marketing and sales resources.
- Industry Recognition: Multiple prestigious awards recognizing our innovation, product quality and customer service excellence.
As Intermedia doesn’t require users to sign contracts, what kind of impact does it have on end-user retention?
O’Dwyer: Intermedia’s policy of not requiring users to sign contracts hasn’t really impacted end-user retention in any negative way. In fact, this approach underscores our confidence in the quality and reliability of our services, encouraging customers to stay with us based on their satisfaction rather than contractual obligations.
Our commitment to excellence is recognized industrywide. We have a vibrant community of 200-plus office technology dealer partnerships, which reflects our dedication to building strong, trusted relationships. Our award-winning products and exceptional technical support are key to maintaining this trust.
Notably, Intermedia has been certified by J.D. Power for excellence in technical support seven times, a first among SaaS companies. This certification highlights our unwavering dedication to customer service. Additionally, our Net Promoter Score (NPS) consistently exceeds 80, far surpassing the SaaS industry average of 35. These metrics are a testament to our commitment to quality and customer satisfaction.
Our focus on providing top-notch products and support results in a churn rate of less than 1%, with the average customer staying with us for approximately eight years. We believe that by prioritizing the quality of our products and customer service, we naturally foster customer loyalty, which is why we don’t require signed contracts. This philosophy ensures that our customers choose to stay with us because they genuinely value the services we provide.
That certainly gives the dealer more flexibility in terms of pricing and bundling.
O’Dwyer: We have a lot of dealers who are signing customers up for three- to five-year contracts. Dealers can determine their own pricing; we just give them MSRP guidance. Some of our partners include service fees that effectively allow them to realize more margin. They can also bundle it with other products and services. Most importantly, they have the ability to offer one invoice that covers everything, including the UCaaS solution. Because of the reliability and support we have for our solutions, we feel quite confident standing behind monthly contracts.
Which technologies do you see Intermedia’s investments targeting in the next two to three years?
O’Dwyer: Intermedia is committed to investing in several key technologies to enhance our offerings and support our partners and customers. We’ll continue advancing our AI capabilities across our product suite, with further enhancements to Intermedia SPARK AI that provide deeper insights, more automation and smarter features aimed at improving productivity and efficiency for businesses.
As cyber threats evolve, our investments in advanced security technologies will ensure our solutions remain robust and secure. This includes enhancing data protection, implementing cutting-edge threat detection and ensuring compliance with the latest industry standards.
Recognizing the ongoing trend toward hybrid and remote work, we’ll focus on developing features that help businesses operate seamlessly from anywhere. This includes improving collaboration tools, enhancing communication platforms and ensuring our services are accessible and reliable regardless of location.
Additionally, as a partner-first company, our investments will target the development of tools and resources our partners need to succeed in the cloud communications space. By continuously improving upon our already comprehensive technical, marketing and sales support, as well as creating scalable solutions, we aim to help our partners grow their businesses effectively.
By focusing on these areas, Intermedia aims to not only stay at the foreground of technological advancements, but also to provide our partners and customers with the best possible tools and resources to thrive in an increasingly digital and interconnected world.
Tell us a little about your marketing strategy within the office dealer space.
O’Dwyer: It’s designed to ensure the success of our partners through a collaborative and resource-rich approach. As part of our comprehensive onboarding process, we work closely with our partners to develop tailored marketing plans that align with their unique business goals and target audiences.
A key component of this strategy is Intermedia’s All Access program, which provides our partners with a wide array of marketing assets. This includes professionally crafted customer testimonials, detailed vertical case studies and a variety of social media support materials. Additionally, we equip our partners with effective email campaign templates and strategies to help them engage their prospects and existing customers more effectively.
By offering these resources and working collaboratively, we empower our office dealer partners to leverage our tools and expertise to grow their businesses, reach new customers and achieve sustained success in the competitive cloud communications market.
I spend a lot of time attending association events—the BTA, American Co-op, CDA BPCA and SDG, plus we’re a part of Mike Stramaglio’s Consortium. We’re getting ourselves out there. And within that, we have a lot of really good spokespeople and references. I do a lot of promotions through webinars, and I say, “Don’t listen to me, listen to what our dealers are saying.” There are some loud supporters of Intermedia throughout the channel.
Given all of the players you compete against, it seems the UCaaS market is highly contested.
O’Dwyer: There’s a lot of competition, but when you look at it from a pure cloud point of view, there aren’t a lot of providers ready to really make that transition to the cloud, or if they have, they’re trying to do it from a legacy system. Whereas with Intermedia, we have a native cloud solution that’s fully integrated. It’s allowed us to gain an advantage. Our target audience is customers who already have a phone solution and they’re working with another vendor, because the value we bring is the transition to the cloud. There are 435 million business phone users out there; only about 100 million of them have moved to the cloud. That’s a massive opportunity for us to go in and show our solution. As people are moving the phone system to the cloud, it’s not just the phone system anymore. They want to be able to take advantage of all the other elements of communications that can be supported in the cloud, such as video conferencing, file sharing and chat.
What do you feel is the path to growth for your company?
O’Dwyer: It lies in continuing to drive the transition to the cloud. Although we currently have more than 200 office equipment dealers, there are thousands more in the channel we’ve yet to tap into. This potential presents a significant opportunity for expansion. The cloud communications industry is still in its early stages of growth, and the market remains vast and largely untapped.
By expanding our reach within the dealer community and continuing to innovate our product offerings, we can capitalize on this growth potential. Additionally, we’ll focus on enhancing our partner programs and providing exceptional support to ensure that our dealers can successfully transition their customers to the cloud. As more businesses recognize the benefits of cloud communications, Intermedia is well-positioned to lead this transformation and achieve sustained growth.
What are your company’s goals for the next 12 months?
O’Dwyer: Intermedia is always focused on continued innovation to drive our growth and enhance our offerings. First, we aim to continue improving our products, ensuring they meet the evolving needs of our customers and partners. This includes exploring new technologies, particularly in the field of AI, to enhance efficiencies and provide smarter solutions.
We’re also committed to continuously enhancing our partner program. By focusing on providing comprehensive support, including technical, marketing and sales resources, we aim to empower our partners to succeed and grow their businesses. Our goal is to ensure that our partners have everything they need to thrive in the competitive cloud communications market.
Through these initiatives, we’re dedicated to delivering exceptional value to our customers and partners, reinforcing our position as a leader in the cloud communications industry.
