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September 6, 2013
By Craig Schlagbaum
In Marketing 101 classes, one of the first chapters taught is regarding the four core pillars of marketing: Product, Price, Promotion and Place (or Distribution). For those of us in channel professions, we of course live in that fourth P” world (or D,” as it were).
As many know, there is a continuing convergence occurring in the telecom and IT business worlds as well as the channels of distribution. The proliferation of the cloud and customers demands for ONE vendor to work with” are also driving more and more consolidation and partnering among traditional VARs and agents. To take advantage of this, some partners are even morphing their businesses through M&A activities. It is all in the spirit of partners adapting to their customers’ needs, which is a must for their survival. Indeed, VAR partners are now selling recurring revenue services at a rate never before seen in the IT industry as the cloud and shared services” model is expected to continue to at least double over the next five years. Customers have essentially created this new purchasing model in their desire to cut costs and have more predictable monthly expenses for their IT needs vs. costly upfront expenses.
At the same time, service providers have had to respond to the manner in which their customers wish to buy their services. For marketing experts, this is the oldest credo in any channel distribution strategy, from automobiles to computers or to insurance services. In order to meet the customer properly in the market, manufacturers must ultimately allow that customer to choose the route to market through which they wish to buy a good or service from them.
For the last 33 years, the VAR channel has been established as the primary route to market for the IT industry, due in part to their trusted adviser” status with their customers. Collectively VARs have the ability to put millions of feet on the street in order to support and present solutions to customers. If IT vendors had to pay the bill for that, it would prove to be a very costly model that would significantly erode their margins and not likely serve their customers well. Moreover because of the complexity of their customers needs, no one sales force of any IT vendor has the scope necessary to deal with all of their customers’ IT demands. So, now we have the convergence of the IT and telecom industries due to the nature of the services that are being sold, as they require elements from both industries in order to deliver them. Enter the VAR channel as one of the solutions to those problems and a key route to market that customers already prefer.
Yet, many VARs lack experience in the telecom arena as that has not been a historical part of what they needed to assist customers with … until now. On the traditional agent partner side, a lot of opportunity will come if you look for VARs to partner with or even potentially merge with, A great example is our Solutions Provider, ACS Services Inc. in Boston. Steven McGrath had a successful telecom business and several years ago saw the emerging opportunity to provide a full-service solution to his customers. So he partnered with William Adams technology company to create ACS Services. We feel we were ahead of the curve and its really paying off,” said Adams. ACS can offer our customers support from desktop to mobile and its a real differentiator in our market.” We have many other solutions providers like ACS who are working hand-in-hand with VARS and driving the industries’ next evolution. If youre not, its time to get serious about it. ACS McGrath puts it this way: “Connectivity to the cloud is driving our business. Its the number one reason we merged and its why customers hire us. We can support them end-to-end.”
We are responding to the changes all around us. In August, Comcast Business announced that SYNNEX Corp., a leading distributor of IT products and services that serves thousands of VARs across the country, had joined the Comcast Business Solutions Provider Program as the first product distributor to serve as a master agent for the sales of recurring revenue services for us. They can support traditional agents as well. SYNNEX has an impressive reach into the VAR community and a dedicated network connectivity practice that they have now built to support their VARs. This is something that likely would not have happened even two years ago, but changes in customer behavior and the movement away from capex to opex models for their IT needs are changing how channels of distribution operate as well. Even on the telecom vendor side, companies like Ciena are adapting to the change by creating ecosystems of partnering between service providers, IT vendors like IBM and EMC, and VARs or integrators like Presidio who are all working together to support their joint customers. These partnering models are evolving at a rate never seen before.
This is all part of adapting to the manner in how customers are buying and responding to their varied needs. The fourth P is an exciting place to be right now as these changes bode well for the channel we work in. To succeed, we all need to help the customer get what they ultimately want: a solution that meets their business needs and an ease of doing business” experience. Key knowledge of how the fourth P of marketing works has always been essential to companies strategies and success, and our industry is no exception. As our world and our industry continue to change at a rapid pace, we must respond with how we support our customers’ ever-evolving needs, and we must properly support the channels of distribution that serve them. The channel is good Place to be!
Craig Schlagbaum is the vice president of indirect channel sales for
Comcast Business Class
. In this role, he manages Comcast’s indirect channel partner team and the overall indirect channel programs for business services. Prior to Comcast, Schlagbaum managed the indirect channel team for Level 3 Communications. He has spent more than 21 years in various indirect channel roles in sales, marketing and business development, and has been recognized as a top channel executive by Channel Partners magazine. He also is a member of
the 2012-13 Channel Partners Advisory Board.
Read more about:Agents
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