Kitchener’s Network Telecom delivers big results from small markets to win major Avaya award

While Avaya is putting more emphasis on the cloud, Network Telecom, whose customers are mainly in small town southwestern Ontario, won a Midmarket Partner of the Year award by leveraging a very traditional business model.

Network Telecom’s Dave and Cathy Waddle

PHOENIX – At this year’s Engage customer event, the transition to a cloud world has been forefront in the company’s messaging. The new Avaya Cloud Office UCaaS offering stemming from Avaya’s partnership announcement with RingCentral was the highlight announcement of the conference. Yet at the same time, Kitchener ON-based Network Telecom won Midmarket Partner of the Year for the Canada and Latin America International region – with a customer base and business model to satisfy them rooted much more in the past than in the future.

Network Telecom is a family-owned interconnect company, created by deregulation in Canada at the end of the 1970s. The owners, Cathy and Dave Waddle, have been there from the beginning.

“We have seen the introduction of a lot of products along the way – like the first fax machine,” said Cathy Waddle, Network Telecom’s Sales Manager.

“Everything except black rotary phones,” added Dave Waddle, the company’s Operations Manager.

Network Telecom started out with Nortel as their core technology partner, and shifted to Avaya when Avaya bought that part of Nortel’s business.

“Customers used to buy a phone and we would put it in,” Dave Waddle said, “Now they buy a solution or a service and we figure out the best delivery method for them, whether it be analog, VoIP, SIP, cloud, and premise-based or managed service. Our value, which has never changed, is consulting with the customer to help them select the best delivery method for their circumstances. Cloud is just another delivery method.” They have some fifth-generation customers. Most customers are in southwestern Ontario, specifically within 90 minutes of Kitchener, although they do have some national accounts.

The old Nortel CS1000s have been a key part of the company’s business for many years, and that isn’t likely to change any time soon, despite Avaya announcing the end-of-lifing the products last year.

“We still have a huge Nortel base that we support today – a couple thousand boxes,” Dave Waddle said. “When Avaya and the telcos sent out messages saying that support was ending and people have to upgrade, when customers asked us about it, we told them that they don’t have to upgrade yet. We can still support them for years and years, although some customers may lose features from patch issues.”

Being able to provide this kind of support, and to provide quality service with technologically less advanced equipment, is important to the business model.

“In our territory, a lot of customers don’t have good Internet access,” Cathy Waddle indicated. Avaya built a box with IP Office that lets customers use analog, but add new features when they want them.”

“They don’t have to upgrade to fibre,” Dave Waddle added. “In our area on the Internet, some days you have good days and some days you have bad days, but with voice, they all have to be good days.”

He said that while this may cost them money in the short term, it won’t in the long.

“There will be a $25,000 deal, but just not this year. They trust us. We have also had customers who get a new CEO, and they change to someone bigger, and five years later the CEO leaves and the customer brings us back. We often find that they have been paying for things, especially in cloud where they can have all kinds of extra lines, and we do the housekeeping and clean up that mess for them.”

This business model isn’t hurting Network Telecom’s bottom line. They were just named Avaya’s Midmarket Partner of the Year for the Canadian and Latin American region, with the key metric in their award being a 58% growth rate increase from the year before. For a company that has been in business so long, that’s especially significant.

A key element of this recent success has been school boards.

“One school board RFP was particularly important here, but we are in about a dozen school boards now,” Cathy Waddle indicated.

“Right now, we are in the middle of a huge school board refresh, in which all have their own tweaking requirements,” Dave Waddle added.

The Avaya IX Messaging unified messaging solution is particularly important in this market, as a lot of school boards use it to deliver messaging to teachers.

“With Avaya IX Messaging, we can integrate boards that have Microsoft Teams licensing,” Cathy Waddle said. “That’s been a phenomenal evolution for us in the last few years.”

The big news at Engage this year was the announcement of the forthcoming availability of the Avaya Cloud Office offering with RingCentral, which will be available in the U.S. at the end of March, and a little later in Canada, in the late spring time frame. Cloud is still a small part of Network Telecom’s business, with  on-prem deployments accounting for about 95%, and the company doing some cloud hosting in-house. Avaya Cloud Offices is likely to change that, but the Waddles think that in their market, it will take some time.

“We think that this will roll out to customers in much the same way as past innovations like fax machines,” Cathy Waddle said. “Densely populated areas will get it first, and then it will spread out to areas like ours. We will be doing a road show though with Avaya to introduce the offering.”

“We look on Avaya Cloud Office as just another delivery option that we can offer to customers,” Dave Waddle noted.

“We have situations now where some customers call us up and say that they want cloud, and we ask them what specifically they mean by cloud, and what they want to have happen,” Cathy Waddle said. “We can then create a solution that gives them exactly what they want.”

Exactly how Avaya Cloud Office will make them money isn’t yet fully clear, but because Network Telecom sees it primarily as an adjunct to their on-prem business for what is likely to be some time, that’s a less critical issue than for some partners.

“We don’t really know the impact of the comp model yet, but the beauty of where we sit is that we can rely on the on-prem business until the cloud demand comes in,” Cathy Waddle noted.

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