CRN Interview: Star2Star, Blueface CEO Foy On Channel Commitment, Double-Digit Growth Hopes And Outmaneuvering Mitel

Alan Foy tells CRN that the company can't capitalize on rapidly growing markets in North America, Europe and Asia without a stable of strong partners committed to selling across its newly expanded portfolio and in combination with hot SaaS offerings.

Getting Starstruck

As head of the newly combined Star2Star and Blueface, Alan Foy is in the driver's seat of a company he expects to race to the head of the UCaaS pack.

But the company, which will be known internally as StarBlue, can't capitalize on rapidly growing markets in North America, Europe and Asia without a stable of strong, aggressive channel partners committed to selling across the company's newly expanded portfolio and in combination with hot SaaS offerings, Foy said.

To that end, Foy intends to bring the best of Star2Star's channel program, which is used by some 800 North American partners, to the rest of the company as it eyes global expansion and deeper penetration into enterprise markets.

Those markets, Foy said, are growing rapidly as the unified communications industry consolidates, and Star2Star and Blueface have a huge opportunity to outmaneuver and out-innovate larger competitors like Mitel.

What follows is an edited excerpt of Foy's conversation with CRN.

What's the rationale behind the merger between Star2Star and Blueface?

Globally there's been a huge uptake in Unified Communications-as-a-Service. The growth rates are accelerating globally. But equally there's been a huge move to consolidation globally. As part of that, the rationale for the merger is that both Star2Star and Blueface are very complementary. Obviously, Star2Star has a great presence in North America and Blueface does in Europe, and as such it makes a lot of sense. From a cultural perspective, both businesses are very similar in terms of their really entrepreneurial and innovative DNA.

Do you have any projections for how rapidly the combined company can grow?

The growth rates in Europe are quite strong right now. In many respects, Europe is a number of years behind North America in terms of adoption of telecommunications more broadly, so we're seeing strong growth in Europe broadly and in Asia PAC. Overall, where we see a lot of growth is the traditional SMB space and equally in enterprise and wholesale. On that side of things we're seeing quite a significant uptick in interest and sales. In enterprise and strategic wholesale, being a global player is vital. It's really important to these guys that you can deliver a localized experience and operate off of one global platform. That's very much at the center of what we're trying to achieve with this merger.

What are your hopes for the company's channel partners?

At the core of Star2Star is our love of the channel, and our support of the channel, and that's absolutely not going to change. We are very much a channel-focused business in North America, and I think Blueface has a lot it can learn from the channel approach of Star2Star in North America. We actually have ambitious plans to roll out a more robust channel strategy across new markets in Europe, really taking the lessons and insights that Star2Star has taken to support of the channel. The channel is absolutely vital to our go-forward plan.

How will the combined company differentiate itself in the rapidly growing and consolidating market?

The first key differentiator is that we have a truly global presence and can localize that offering in all the markets that we serve. We have a full spectrum of solution sets. It's everything from hybrid to pure hosted to SD-WAN to very, very intricate and very advanced integration platforms. We've got a full suite of offerings and in 2018 we're going to make some major announcements around product. I think the marketplace and the channel will be very happy to see that we've got a full breadth of offerings which I don't believe are rivaled by any third-party competitor.

How important is it for channel partners to sell across that entire portfolio?

In many respects, channel partners who are services customers of different sizes or different verticals, the nuances of what they want in the purchasing decision or the evaluation decision can be quite different. Having a trusted UCaaS provider that really wants to work with the channel and have the full suite of offerings and can tailor those offerings to suit those customers is a really important thing and an important part of the value proposition. I think it's really important. We've been really mindful of ensuring that we have long-term customer relationships. Our retention rate is really strong. A partner that can trust the product suite in its full spectrum, across the full portfolio, will deliver reliable, excellent service to the customer. I hope the channel will view us as a partner of theirs that's with them for the long haul and wants to make them as successful as they can be.

How has Blueface interacted with the channel until now?

We do have a channel partner program, but we've also had great success in the wholesale space whereby we've basically white-labeled our platform to third-party carriers and operators who are effectively like a channel partner but sell under their own brand.

What kind of growth projections are you seeing for the UCaaS market in 2018?

What you typically see is that there are different paces of growth. If you take the Asia PAC, South America territory, it's growing in the mid-20 percent CAGR. I think it's fair to say North America is around the 15 percent mark. In Europe, it's around 18 percent. The real thing people need to drill into is that there has been rapid adoption in midmarket and enterprise customers. If you strip that out, we're seeing amazing growth in that space. I think that's where a lot of the market has gone. I think that's principally because of the transition of vital IT services in enterprise. There's a real recognition now that Unified Communications-as-a-Service and unified communications more broadly is really gaining traction in the larger businesses.

How does the merger improve each company's position versus competitors like Mitel?

The key thing is for our global peers to know we're coming. We have a huge commitment to technology and innovation and R&D. Fast-moving companies are innovating rapidly, and we're innovating rapidly. For the channel to know that we're are constantly going to stay ahead of the curve and really ahead of our peers in terms of product and solutions is really important. A lot of our peers in the marketplace have become like big oil tankers that are very resistant to change and are not as fast as they need to be in terms of deploying new offerings, and that's a real differentiator. We have a combined workforce in excess of 500 people. The really, really cool thing is that we now have the full breadth of talent on our team to really challenge our offerings and make sure we're constantly bringing best-in-class offerings to the channel. And we need to think ahead about what does the channel need that they don't yet know they need. We're listening to them and working with them to figure out what that is.

What do you need from channel partners in order for the merger to be successful?

I'd like the channel to constantly challenge us to make sure we're delivering absolutely everything they need from us. I think they need to consider new types of customer relationships, and also think about it in terms of how do we bring third-party applications and services into the mix and make sure we're delivering a fully unified experience across the board. That's what the future is about. It's about the integration and leveraging of third-party SaaS applications with our UCaaS offering and making sure we do that in a seamless way. At the end of the day, the channel partners are in front of the customer. They know what customers want, what they need and they're very responsive to the customer. Having them as our conduit, as our pulse of what's going on with the customer, is really, really important.

Do you anticipate Blueface adopting the Star2Star channel program, or will there be changes made in order to introduce a new, unified program?

Blueface can absolutely leverage a lot of the Star2Star channel partner approach, and in fact we've already started to do that, and we've had very good response. The channel is constantly challenging the offering in the marketplace, everything from product to incentivization to support. We're going to constantly listen to that feedback. From an overall perspective, the merger will absolutely try to take the best of both companies, but I really do think that Star2Star has an absolutely outstanding channel partner program that we can build on.