MSP-Telecom Convergence: Partners Take Sides

Will the MSP community adopt telecom services? Will telecom agents sell managed services?

Four channel experts debated industry convergence last week at Channel Partners Virtual.

Andrew Pryfogle, Pax8‘s chief market development officer, took the “yes” side because, simply put, he sees convergence occurring.

Pax8’s Andrew Pryfogle

“We are absolutely seeing agents that are being drawn more into the managed services conversation. We’re seeing MSPs being drawn more and more into the telco conversation,” Pryfogle said.

TPx’s Jared Martin

Jared Martin, vice president of MSx managed services for TPx Communications, said “yes” because agents need to evolve. His own company “saw the writing on the wall” and pivoted to managed services.

“The future really is managed services,” Martin said.

But MSP expert Rob Rae voiced strong objections. Rae, Datto’s senior vice president of business development, argued that the convergence question does not carry the same weight for IT services providers. And that’s because the MSP channel is growing. He said the average MSP grew more than 20% in 2019.

Datto’s Rob Rae

“You guys are talking about the channel in trouble,” Rae said. “We’re actually seeing the exact opposite.”

But it’s not just the IT people who doubt the convergence. Agent Alliance CEO Bill Power said agents need to heavily invest in IT education if they want to do managed IT services.

The Alliance’s Bill Power

“Legacy telco agents are very reluctant. And it’s not enough to just have a portfolio of suppliers that you can reach into and bring somebody into the conversation. I’ve got to get the prospect interested in the first place. It’s a tough, tough battle,” Power said.

The Audience Speaks

Approximately 60% of attendees voted for the pro-convergence side at the end of the debate. However, many weighed in their opinions.

Vince Tinnirello, managing director of Colorado-based MSP Anchor Network Solutions, sided with the naysayers. He agreed with Rae, that while the telecom industry may be suffering, the same does not go for MSPs.

“The channel experts wouldn’t have anything to talk about if they didn’t have the subject of the demise of what we [MSPs] do, and usually the experts are people who’ve never done what we do. It’s laughable,” Tinnirello said.

Several other MSP and telecom agent partners weighed in on the debate in the online comment section. We noted eight of the best comments in the gallery below. You can also read our full write-up of the debate.

Dire Consequences

Paul Croteau, Rackspace's channel chief technology officer, gave a stern warning to MSPs.

"MSPs need to adapt or die. Step out of the telco closet and expand your partner offerings," he said.

Alternative Take

Yancy Lancaster, vice president of technology for the MSP Pioneer-360, noted that the debate is a moot point in some senses.

"Convergence has already occurred. Telco is just part of the tech stack at this point," Lancaster said.

Lancaster's company is an MSP that merged with a telecom services company.

Another Yes

Amy Babinchak, president of the MSP Harbor Computer Services, agreed with Lancaster that many MSPs have already adopted telecom. She said telco doesn't qualify as a "specialty market" anymore.

"Convergence? Yeah, we've been doing telco for a long time time. The business came into our venue as soon as it became IP-based. It was not a difficult leap to make. This still is all cloud-based and it's just like everything else we do," she said.

Collaboration

Nancy Ridge, founder and president of Ridge Innovative, argued that we need to think about convergence in terms of ecosystems. In other words, utilizing partnerships and alliances will best help firms bridge their gaps in skill and technology.

"Again, it doesn't have to be either/or. Let's not have our community reflect the division we see elsewhere in our world," Ridge said. "Collaboration is the key. MSP's and agents both bring value; together we are better!"

Knowledge

Idris Odutoye, president of IT consultant ATA Trusted Advisors, agreed with Bill Power that legacy agents need to work hard to bolster their IT expertise.

"I think it is ultimately about investing in personal education to sell new technologies or investing in the next generation that grew up with this technology to help you position yourself with that customer," Odutoye said.

Telecom or Die?

Vince Tinnirello pushed back on the idea that the MSP community needs to adopt telecom services or die.

"Rob [Rae] is right; we MSPs are fine. I'm tired of all of the so-called 'channel experts' who don't do what we do and think they are experts," he said.

But he didn't outright reject the possibility that some of his peers might want to expand their practices.

"MSPs can sell telco as part of their catalog, or they can work in harmony alongside telcos," he said. "Both models work."

Evolution

Clark Atwood, president of Concierge Core Services, said the large MSPs are embracing the agent model.

"They are keeping the billing responsibility and pay ongoing commissions," Atwood said. "They are adding more services such as compliance."

In the meantime, agents aren't finding any more money in circuits. They'll need to adopt managed IT services or find another alternative.

The Ultimate Criteria

Ayan Adam, founder and chief marketing officer of CX Atelier, said partners must ultimately consider the end customer.

"The channel needs to undergo a [customer experience] revolution! Deliver on end-user expectations; put the emphasis on high-quality digital services," she wrote.