A long time channel luminary, David Peach was last seen as CEO of Express Data, overseeing its integration into Dicker Data in 2014. He is now heading up Lifesize's A/NZ operations. Lifesize is an Austin, Texas, US-based video and audio telecommunications company which provides HD videoconferencing and collaboration over the Cloud. Peach stopped by the ARN offices to give his first ever interview in the new role.
What have you been up to since we last saw you?
After Express Data/Dicker Data, I went away on holiday with the family for a break. I came back in February-March this year and did some consulting for a couple of different organisations while I was looking around for the next opportunity. I didn’t have a set role or company in mind. All I knew was that I wanted to end up somewhere on the disruptive end of the technology game, involved in change in a channel facing organisation. The one thing I took away from my 14 years at ED was I really enjoyed partnering situations, the power of channel leverage, and the opportunities that it provides. It provides profits for all the players when its really done well.
What drew you to Lifesize?
It was a company that was looking to completely disrupt itself from the inside out. Lifesize has been one of the leading organisations for about 12 years in the provision of on-premises video. But with the rehiring of CEO and co-founder Craig Malloy about two years ago, they decided they needed to reinvent themselves, to become a SaaS business via the channel.
That gave me the opportunity to come on board as the regional director for A/NZ, to help drive that change locally. It’s a company with a lot of history in the video space. Video is an area that has been expected to explode for, say what, nearly 25 years?
What's changed then?
What has been interesting is what we’ve seen from the consumer end. There’s been a huge adoption of people using Facetime, Skype, and other video messaging tools in their personal life, and yet business video has been confined to the boardrooms of large companies who could afford really expensive on premises rollouts. Now we’re seeing employees coming to work and they want access to that same consumer experience at work – being able to collaborate the same way they do with their friends in their social life.
Video is a better way to communicate. So much of human communication is non-verbal.
We’ve getting more used to using video as consumers, in a lot more of our interactions. It's still very challenging to bring that into the workspace, especially when you move to beyond the borders of your own workplace. There are so many different standards and technologies in play.
So what does your new role entail?
I oversee A/NZ, and report into the senior vice president of sales, based out of our headquarters in Austin, Texas. There is myself, and six other regional directors across Europe, Asia and A/NZ who are responsible just for the local channel and customers.
The key part of our role at this stage is to help our customers and partners transition to Cloud, to move from selling on-premises video to our Cloud-based video meeting platform. There are seven different ways you can meet across our Cloud service, with video being just one of them.
What are you going to do differently to your predecessors to help grow the business?
Its been just over a year since we started selling our Cloud based subscription video-as-a-service in Australia. We haven’t done a lot of marketing about it locally, its been more of a solution sell alongside our on-premises solution over the last twelve months.
The local team here have been doing a fantastic job of selling the old as well as the new. I can’t go into specifics about the customer numbers on our Cloud service, but we’re in line with what you’d expect for being a percentage of a global vendors business. We’ve got about 1800 customers globally on our Cloud platform, but we’re ahead of plan in terms of the growth of numbers of customers on our local Cloud service. We haven’t structured our partner programme and our offerings around that just yet. Its more been that pure demand from our customers to get onto the subscription Cloud video service.
So what I would do differently? Over the coming months, the coming quarters, I plan on really accelerating the transition of our partners to this new model of selling, as well as making sure our local team is well equipped and are doing a good job of selling annual recurring revenue, as to on premises. You’re going to see a ramp up of activity, of marketing, and of engagement with the broader IT channel.
Who handles your distribution now?
We have Aria Technologies and VExpress.
With a Cloud video distribution model, you could quite easily direct sell. What do you need partners for?
Yes we can direct sell. But so can any vendor. You just whack a price list on a website and take credit cards. We are moving to becoming a SaaS company, with our channel partners. We rapidly want to get to being a 100 per cent subscription based software company. But the real magic part, and the real differentiator in our business is deeply connected endpoints, which we also manufacture and sell via our channel.
Traditionally this gear has been very expensive, especially if you go near the top end of town – like an endpoint that takes over an entire room. A large piece of capex, with a large cost of ownership over its life.
Our endpoints provide that same high definition experience on one or two screens in a single room at a fraction of the price. Its similar to the Apple TV – which is an endpoint. What it really does is connect you into a Cloud experience and ecosystem that is very similar to the Apple Store, with channels, apps etc.
Our endpoints provide a camera, microphones, audio bridging capabilities but once they register into our Cloud service, you’re really getting the value. Our distributors obviously have a big role to play there, but their main role is to help us build and develop our partner channel. We need them to go and demonstrate how customers can unlock businesses to video.
So what have been some good examples of your partners putting this into practice?
I visited one of our partners down in Melbourne, and they’ve done a great job of intergrating the whole platform for one of our customers. They’ve combined our endpoints with some third party equipment, to show how easy it can work with legacy equipment, it also tied up room automation, such as lighting and blinds. We don’t do any of that stuff. We provide the Cloud video service, which is only part of the meeting experience in that room. That’s why our partners are so important.
Its one thing to sell the first month to a customer, its another thing to sell the 13th month, or the 36th month. So we rely on our partners providing that excellent ongoing customer service. We need them to help customers who have maybe only just put their toes in the water in terms of video, to help make it pervasive throughout the organisation. That way they can increase the numbers of uses in that organisation over time, and build more revenue.
How do you and your partners intend to approach a long term Cisco, Polycom or Shoretel customer? What do you offer that they don’t?
The first thing we say to them is: You don’t need to throw out all your old equipment, and start using ours instead. You do get the best, the richest experience using our hardware, there is no doubt about that. One of our company statements as part of the disruption is that the user experience must be much better if people are to truly adopt video. The poor user interfaces and experiences in the past is part of why we believe video hasn’t taken off in business environments.
It doesn’t matter what vendors you talk about in terms of devices, whether you’re talking mobile, on premises systems, or in executives homes, we’re standards based – so you can dial into our Cloud. We’re interoperable with Skype for Business as well. We’re agnostic across the endpoints, but clearly my goal is to give you the best experience with our endpoints. We can give you a trial with our Cloud, using your current infrastructure. We can sort out any issues if there are any, but we've yet to come across one we couldn’t solve. We can then hopefully grow our relationship with them from there.
There are two groups of business users – mobile and on-premises. They have been traditionally hard to interoperate. We sit between those two in the Cloud, all of those devices can connect to us through a variety of means, whether its via WebRTC or a mobile app, or just purely browser based. We provide that inbetween connection, that’s our key differentiator, and that’s where we’re seeing the most interest.
What about players like Google Hangouts – don’t they do something very similar to what you’re offering?
There is a segment of business that is comfortable with that kind of service, a free service. But it does come with some catches, either up front, such as a lack of service, a lack of accountability, a lack of security and encryption, a lack of SLAs etc. or down the track, who knows what the outcome is? There’s an old saying, “If its free, then you’re the product.”
Do you work with any other vendor partners? Any horizontal alliances?
We’ve got plenty of alliance partners across several vendors. We’re still in the early days of our Cloud service, but we’ve got interoperability with Skype for Business, as I mentioned, we’ve got technology partnerships in place with other companies such as Shoretel. We’re also part of Telstra’s TBS programme, we go to market jointly with Telstra and a lot of their partners. Telstra sees us as a strategic product set, the Lifesize Cloud system fits a set of their customers very neatly.
For me its not about setting my sights on the big end of town, or the companies that already do video, and trying to convert them over. We’re more focused on the SME, midmarket end of town, where they may have tried video before, but been burnt by it.
Who provides the infrastructure for Lifesize?
In terms of the endpoint hardware, we build all that ourselves. In terms of the backend Cloud infrastructure, we use IBM Softlayer. We’ve got four nodes globally across four continents, about 20 points of presence around the world – including two in Melbourne and Sydney. On Softlayer, it's all encrypted, there’s full security there, and all the high class service you’d expect from an organisation like IBM.
Any specific market verticals you’re focusing on?
Not for profits have been an early focus. Some in the education space, especially in aged care and healthcare. Careflight is a customer, because they really needed a robust video service that worked well over 4G, both in the air and on the ground. They also have a large group of remote workers and volunteers that use Lifesize for training purposes, so having our Cloud service available means they don’t have to rely on the extensive infrastructure you would’ve needed in the past.
Education has been another big one. As long as you’ve got a screen, an internet connection and power, you can be set up, registered in the Cloud and running within seven minutes.
The financial services industry is another one that’s seen a fair bit of interest. We have a few companies in the works, but I won’t be able to talk about them for a few months yet.
Looking ahead around 12-18 months, what is the ideal position you’d like to see Lifesize A/NZ in?
We want to be at least double our size, in terms of staff. Perhaps three or four times more in terms of active Cloud customers as well as revenue. A/NZ is seen by head office as a very Cloud ready region, that will only increase more as NBN rolls, and people get access to better broadband particularly in regional areas.
Having said that, you can run our service over 4G. The Telstra plan I’m using, costs me about $8-10 dollars for a one hour 60fps, 1080p video call. That’s cheaper than the parking metre if you head into town for a meeting.
The price points we’re seeing for video are becoming so low, it’s a huge opportunity for our channel partners. We’ve got around 100 partners in our current channel.
If we have a 200-seat client, and we’ve rolled out 25 seats initially, and in two years time we get that up to 180-200 people using video regularly for business, that to me would be the win.
In about 18-24 months, if we’ve double or tripled our overall business, and all our partners have come with us alongside new ones, then we’d see that as successful.