Agent World Gives IT Vendors Road Map for Recurring Revenue
Over the last 30 days, I have had the unique opportunity to attend and speak at a number of solution-provider events that fall outside the traditional telecom agent channel space. All of these events had one major theme in common: This is one of the most disruptive times for the high-tech channel in the last 30 years.
We now have new IT buyers and partners whom Gartner analyst Tiffani Bova references as being born in the cloud.” And many others are transitioning to recurring revenue models to improve their balance sheets while simultaneously maintaining current business models and meeting their customers needs. Additionally, there are new buyers, from CMOs to line-of-business executives, who are beginning to control more of the IT budget than CIOs ever had under their purview which is unprecedented in the industry.
The channel will adapt, as it always does, to satisfy the buying preferences and desires of customers. In a world of technological advances and economic challenges, many customers are moving to an outsourced IT model that focuses on OPEX rather than CAPEX expenses. This dynamic fits right into the sweet spot of the telecom industry, which has been providing recurring OPEX-based revenue services since its origins.
Traditional hardware and software IT vendors are starting to see the benefits of our recurring revenue model, but they dont know how to ensure that their partners will adapt to this model, or how to support them during the transition. On the other side of the coin, partners are also struggling with this change. Yet, amid chaos lies opportunity.
Our industry has the unique ability to help this massive channel make the switch to the recurring revenue world by providing them with a road map to sell access to the cloud, as well as other cloud services. Simply stated, there is an enormous opportunity to create a new buying outcome in the channel for customers who desire to purchase their IT needs on a recurring revenue basis.
Many years ago, IBM faced a similar channel challenge, and they turned that challenge into great success by building and developing a strong channel that generated the more than 180,000 IT partners that exist today. IBM desired a unique sales force of dealers” that were not the typical IBM blue-suit sales reps” selling the latest mini computers and mainframes of the day. IBM perceived that buyers needs were changing to focus on new IT devices, then called personal computers. So they sought out a new channel of word-processor dealers and electronics retailers in the late 1970s who were selling precursors to the PC. What started with companies like Computerland, Businessland, Sears Business Systems, and a number of other entities spawned one of the most powerful distribution channels in history. Those partners were not only selling the latest technology, but more importantly, they were also selling the vendor and the quality, support and service IBM could offer, as well as their own reputation and skills all concepts that are now more important than ever.
Today, the cloud model is logo agnostic, because it is the brand and reliability of the service provider that matters far more than the vendor logo on the server, storage device, processor or router that sits invisibly in the cloud or somewhere off-premise. Herein lies the major shift that has so greatly impacted the channel industry, and it is rooted in a recurring revenue model. Moreover, todays decision makers” are changing from IT-savvy technologists to business professionals who never knew a world without the Internet and mobile devices. Some technology vendors are even saying that the word reseller,” which was the default description for the IT channel, may in fact disappear within the next three to five years, as the reselling of physical hardware and software may generate fewer sales than cloud-based services.
We are now at a similar crossroads to the one IBM faced many years ago. We need to not only help our traditional telecom partners sell more value and recurring services, but also ensure that the thousands of these newer channel partners or VARs” who have trusted advisor status” with their customers make a seamless transition to the recurring revenue world. Because this crossroads presents a challenge and an opportunity, these are both the best of times” and the worst of times.” But now is the time to eliminate industry confusion and anxiety, and instead ensure that the sales of Internet connectivity and related telecom services, as well as new cloud services, expand through the channel-partner universe at a rate and pace that is unprecedented in the telecom industrys 100+ year history. Doing so will ensure that the best of times” prevail.
Craig Schlagbaum is the vice president of indirect channel sales for
Comcast
business class services. In this role, he manages Comcast’s indirect channel partner team and the overall indirect channel programs for business services. He also is a member of the
2011-12 Channel Partners Conference & Expo Advisory Board
.
