Digium -- which promotes Asterisk (the open source IP PBX) -- has finally launched a cloud-based PBX service, aptly called Switchvox Cloud. No doubt, there's demand for hosted voice services. And Digium partners can resell the new cloud service, which is based on Digium's Switchvox brand. But how exactly will partner engagements work, and can partners earn recurring revenues? Bryan Johns (pictured), a product manager at Digium, offered some insights to The VAR Guy.

Digium launched a closed beta and field trials of Switchvox Cloud in January 2012, according to Johns. The reason: Hosted PBX services now represent 20 percent of the PBX market, up from 4 percent only a few years ago. Plus, the hosted model delivers roughly twice the gross margin, he estimated.

"Switchvox is software so it's cloud ready," said Johns. The new cloud system is hosted by Vocal Cloud -- a company in Atlanta, Ga. Basically, Vocal Cloud offers plumbing for the data center operations and network operations. For its part, Digium delivers the Switchvox software, handsets and customer support.

Getting Started

Over the past year, Digium quietly added seven to 10 customers per month onto the cloud system. Those customers were already in Digium's deal-capture sales funnel but they expressed interest in a cloud approach. "The field trial taught us a lot about operating, implementation, setting expectations, and how the offering fits within our existing channel operations," said Johns.

Still, the new Switchvox cloud initiative is not part of the standard Digium partner program. Partners have to execute a separate agreement to earn residual revenues from the cloud service. And there's no white label offering for partners. To make sure the approach works, Digium quietly launched a cloud channel beta in January 2013. Digium has routed a few partners through the process and received good feedback, he added.

Pricing and Partner Considerations

Switchvox Cloud costs $29 to $35 per user per month, depending on length of contract term. When it comes to working with partners in the cloud, Digium also understands that the list price may not end up as the invoiced price. "We collaborate with partners on every opportunity they may uncover. We directly control any discounting or modification on pricing since the partner doesn't sell on their own paper. But we do collaborate with the partner to figure out what's best for each customer."

Digium also expects to attract agents into the cloud initiative. While VARs and resellers are Digium's traditional partners, agents from the telecom world are expected to resell the Switchvox cloud service, earning recurring revenue along the way.