Sutus undercuts Nortel and Microsoft in battle for small office IP

From Report on Wireless Network Letter

By Cristina Howorun — Created 02/08/2008 - 11:22am

Vancouver-based Sutus Inc. is challenging the big equipment makers for a larger share of the small office IP communications market with a new unified communications product that is competing on both price and ease-of-installation.
Shipments of Sutus' Business Central only started in November 2007, but already the product is earning accolades and gaining traction. Last month, Internet Telephony magazine named Sutus Business Central the 2007 product of the year and Rocket Builders, a BC- based management consulting firm, included Sutus on their annual list of 25 private companies poised for substantial revenue growth in the coming year.

The company offers SMBs a flexible, easy-to-use, unified communications solution, by incorporating data, telephony and networking tools into a single system. Voice features include unified messaging, enabling users to retrieve messages via email, and the integration of PSTN and VoIP services. Email and file servers, VPN remote access, wireless LAN support are just some of the features available on the data side.

Sutus' bread and butter is the SMB market with customers ranging from real estate to financial services to the retail sector. "We are absolutely laser-focused on the [SMB] market, because it's so under-serviced," Shawn Chute, Sutus executive VP, tells Network Letter.

Approximately 75% of Sutus' client-base is located on the west coast in both Canada and the US, but that could soon change. "We just opened a US sales office in Boston and we're doing a lot of activity in Toronto. Right now, we're in discussions [with] 75% of Canada's large national service providers, and a big chunk in the US as well," Chute boasts.

Sutus' products are distributed by NetXUSA and Canadian Communications Products Inc. to service providers, such as Core IT, Netstar and United Systems Access Telecom Inc. Service providers then rebrand the product as their own. Sutus derives revenue from the initial sale to the distributor and revenue sharing with channel providers for hosting services.

Chute acknowledges the company faces some stiff competition from industry juggernauts Nortel Networks Corp., Microsoft Corp. and others when it comes to unified communications. He is confident, however, that Sutus has some advantages over its larger competitors and can win in the SMB space.

One area where Sutus has a leg up on its rivals is price. "They tend to sell their solutions as a one-time fee and then charge a management fee on top of that. With us, service providers can sell it through a monthly subscription type of relationship," Chute explains, While the big players may sell their gear for upwards of $30,000, according to Chute, Sutus offers its business centre solution for significantly less than that. "A unit for up to a nine-person office [retails] for $3995, and for a 10-25 person office for $5495. A provider can sell it on a one-time price or bundle it with other services and sell it on a term or lease basis," he says.

SMBs will also benefit from the easy installation, something that isn't available with the big systems. "Generally speaking, these other systems are very complex to install. With our solution, you can literally have a 10-person office up and running in an hour," Chute says. "We literally have a four-page set-up guide and it's been designed for this market place."

The greatest challenges ahead, Chute says, are ensuring "the features meet the needs of small business and that there is a strong market for the features." Maintaining simplicity and affordability are also key going forward, he adds.  
Sutus is also looking to gain some traction with wireless providers to further broaden its reach into the SMB market. Currently, the company is in discussions with three undisclosed "decent-sized wireless providers," according to Chute.