Comcast Business Channel Chief: 3 Channel Revenue Models Are Emerging
In advance of the Channel Partners Conference & Expo underway this week in Las Vegas, Channel Futures turned to the longtime channel executive for his insights on the evolving channel. If you’re not familiar, Schlagbaum has been working channels for more than 20 years. A member of the Channel Futures Think Tank, he’s a regular contributor to Channel Futures.
In this Q&A, Schlagbaum discusses changing business models, customer experiences and channel convergence among other things. We start the conversation with channel evolution.
Channel Futures: What’s holding channel partners back from experiencing exponential growth?
Craig Schlagbaum: Like most things, people tend to stay close in their comfort zones. For agents this has been data and voice, and not applications or other value-added services. For VARs and MSPs, it is the opposite. I believe these two communities of partners must start to look at things more holistically — ideally through the eyes of the customer. This will enable them to support all the services needed. That’s when we’ll see the full potential of the channel materialize.
CF: What impact is the market’s fixation on customer experience having on the channel?
CS: For us, we have translated that to Partner Experience, which we call Px19. We are putting a massive focus on this. We track metrics, so we measure how we are doing in our partners’ eyes and we grade ourselves on that. In today’s world, it is all about the ease of doing business. This is our No. 1 priority every day with everything we do.
CF: What’s driving disruption in today’s channel?
CS: Disruption is being caused by the channel moving from one that distributed products to one that distributes virtual services. In the old model, a partner would buy all the hardware and software, and then assemble those elements at the customer premise to create a final solution. Now, so much of that solution is already “pre-built” in the cloud where the servers reside to the networks that carry the bits from the carriers. This is forcing partners to become much more focused on the value-added services rather than creating those services. Carriers and the major cloud companies are more efficient to build these offerings than any one partner could be. So, rather than selling all the physical hardware in the solution, it is more about selling the surrounding support services that make the solution work. This business model casts the partner as the trusted adviser to the customer — a new, but very lucrative role.
CF: Who’s winning — the agent or the MSP?
CS: Both are winning. And both have significant value. But the key is that these two partner models either come together in front of the customer as “one” or they create a model similar to how a general contractor operates with a plumber, electrician and framer to build a house. Not all agents will become MSPs and not all MSPs will become agents. But we believe that all partners can have three or more key income streams available.
- Revenue from services they bill for on their own paper for a recurring revenue service they created.
- Commissions they earn for the sale of services that another provider built for them to use for their clients.
- Value-added and support services that are required to handle their clients ongoing needs.
All types of partners would be wise to start working on these income streams and/or build mutually beneficial partnering ecosystems to get their customers everything they need. If they don’t, customers will find a way to get them from someone else. We believe the successful agents and MSPs will make that transition or build partnerships that allow it to occur.