Whaleback Splits The Difference Between Hardware And Hosted VoIP

Company:

Headquarters: Portsmouth, N.H.

Technology Sector: Networking

Key Product: CrystalBlue Voice Service

Year Founded: 2004

Number of Channel Partners: 50 in the U.S.

Ideal Channel Partner: Managed services provider

Why You Should Care: Whaleback's gradual expansion has earned it 12 straight quarters of growth, a loyal channel following in the Northeast U.S. and a robust mix of solution providers specializing in VoIP resale and networking managed services.

The Lowdown: Whaleback underwent a sizable revamp to its channel program in the summer of 2008, hoping to align itself toward better serving the needs of solution providers selling VoIP to small and midsize businesses. Fast-forward a year and a half, and the New Hampshire-based VoIP vendor has grown a healthy channel that's about 50-50 VoIP equipment VARs and managed VoIP services providers, with about a third overall competent in both.

Whaleback, which is 100 percent channel-based, offers companies a managed IP PBX with a monthly subscription service called CrystalBlue, which includes unlimited nationwide calling for small businesses and other features like monitoring, a voice-only broadband connection, QoS and other advanced features, variously available on tiered pricing plans. Unlike other managed PBXs, CrystalBlue isn't a hosted service -- it's premises-based software, which allows Whaleback to call itself different from both hosted VoIP services players and traditional PBX box-pushers.

"The sweet spot for us is the five- to 99- employee companies," said Dave Zwicker, Whaleback's vice president. "What we bring to [VARs] is an alternative to a purchased PBX, and we can help customers realize the economics of an IP solution without the same kind of heavy cap-ex outlay that a brand-new, shiny PBX system would require."

While VARs don't land as much initial return as they would selling a typical PBX, the long-term recurring revenues are significantly higher, Whaleback contends.

"We never saw much of a hiccup from the recession," Zwicker said. "We saw maybe a bit of a hiccup in terms of our churn rate -- there are companies we served that just simply went out of business -- but our monthly churn has always been running between a half a percent and 1 percent per month, whereas most network services providers and hosted providers run about 3 to 4 percent per month."

Zwicker said Whaleback's expansion has been deliberate for a reason: It wants VARs and MSPs that embrace its model whole-hog. The company is beginning to expand beyond its Northeastern base, with emerging pockets in the Midwest and Florida, but is not yet fully national and has not yet opened itself up to international markets.

"We don't want to overdistribute," he explained. "The U.S. market is so fertile that there's no need to go international yet. In that five- to 99- sweet spot, there are well in excess of 2 million businesses and 36 million stations in the available market."

Whaleback is confident in its channel program and Zwicker said not to anticipate any major changes in the short-term. Next up for Whaleback will be the unveiling of several strategic partnerships. Zwicker is keeping their identities close to the vest but said they will help continue to extend Whaleback's reach on a national scale.