Cloud business is not necessary for everyone.

[2:34]

For Enterprises/Vertical Users:

Jason: But we still have chances to promote the hardware solution for some other customers, I guess like some vertical users. If you’re a business owner of a hotel, are you gonna choose the cloud solution? I guess maybe some of these business owners, they will prefer the cloud solution, but still in the market, take a look!
Ramon: And you mentioned hotels, then, of course, huge companies, enterprises. And some other organizations, they’re maybe not as big, but their standard for data security is still at that high level, like finances, banking, and some governments.
Ramon: Cloud is not going to be an option for them, it’s not an issue of trust. It’s that all the data are deployed on a cloud server that is not 100% in their control. This simple fact is not acceptable to them.

For SMBs:

Jason: When we talk about cloud solutions, most of our business opportunities come from the SMB market.
Ramon: Yeah, we have numbers. Over 80% of the extensions are installed on SMBs, meaning companies under 20 extensions. It’s an industrial number, not only from yeastar. Of course, the situation is different from region to region.
Ramon: There is one big important logic behind the whole thing. It’s because if you’re looking at the smaller PBX, then most of your margin comes from the phones.
Jason: PBX is not a money maker.

[29:14]

Plan A: Resell the telephone lines.

Ramon: If I want to resell the numbers, I have to sign a contract with the carriers based on how many numbers or lines I want.
Jason: And also what kind of lines are you looking for? The digital line, or analog, or sip trunk? They got different prices for sure.
Jason: This contract, you have to sign it with them for at least 2 years. And they give you 23 channels (T1) and 100 numbers. Well, the price will be around 1, 000 HK dollars. And they will also charge you some additional fees like labor charges, installation charges, service, and more.

Plan B: Sell cloud PBX as a package.

Jason: You know, the cloud solution is very popular and the service providers also have sip trunks. So the ISP, the service providers, they can make a package, too. They put trunks, telephones, and also the cloud PBX together. And the price will just be $150 per month.

[48:43]
Jason: You can take the example as a reference. See, this is how the ISPs do their business. You can do the same thing if you have the capability, you can charge even more expensive.
Ramon: Well, first of all, service providers or carriers have absolutely huge advantage in their channel capability. If they want to do a price war with you, you’re over. But that’s not what they do.

Jason: They also have their own competitors.

Ramon: So if you sign a contract to resell their trunks and numbers, you are actually their distributors.

Jason: You truly have the chance to work together with these guys.

[54:59]

If you get the capability, host it by yourself. This is the best way to control your cost.

If not, try to work together with manufacturers, like yeastar hosting solution.

Rent services from some data centers or ISPs in the market.