Insight Focuses Its Might on Connectivity Sales

By Khali Henderson

When you visit the Tempe, Ariz. headquarters of global VAR Insight Enterprises Inc. (NSIT), you know that it’s not your ordinary company. First, there aren’t any offices to speak of in the 103,000 square-foot facility. This is by design; it’s a relatively flat organization to avoid the management layers that tend to bog down decision-making. Second, it’s full of salespeople, meaning there are only salespeople, 1,100 to be exact. This, too, is by design. It helps keep energy high with the operations folks and the bean counters sequestered in other locations.

The resulting swiftness and the oomph are critical to maintaining a massive sales engine that brought in more than $4.8 billion in revenues in 2007. Now the company is keen on using that well-oiled machine to drive connectivity sales. The prospect no doubt has service providers salivating, but it also means traditional agents have big competition coming onto the track with plans to put the pedal to the metal in 2009.

“Insight had been the sleeping giant up until 2007. We have re-emerged in force, and we are just about to get really charged up,” said Missy Civello, connectivity solutions tech practice lead for Insight’s Calence Managed Services in North America.

Insight has been selling connectivity since 2004 as part of is Client Solutions & Delivery organization, but it had a false start, explained Civello. A company reorganization in 2006 left connectivity sales without its dedicated overlay sales team, and sales waned.

By late 2006 Insight knew it needed to jumpstart the effort. It recruited Civello, who worked for half a dozen years supporting direct sales at AT&T Inc. out of Phoenix. Civello joined Insight in April 2007, not long after AT&T was acquired by SBC Communications. While she was not actively looking for a career change, Civello was encouraged by her contacts at Cisco Systems Inc. to consider the job. Cultural changes at AT&T post-merger helped her make the decision to join Insight. “To me, the challenge and the journey of building something from the roots up was very compelling,” she said.

In appearance Civello can only be described as petite, but one conversation will dispel any notion that she is not large and in charge. It doesn’t take much imagination to understand why Insight entrusted her to single-handedly rebuild its carrier sales program.

Civello’s task was to develop the go-to market strategy, educate (or re-educate) sales teams, create messaging to obtain opportunities and process to handle them when they come in. Solutions sales representatives serve as a filter for opportunities sent to the connectivity team.

But she hasn’t recreated the wheel; she’s been working on a new approach that calls for connectivity as part of an end-to-end solution, or what Insight bills as a “total technology solution.” “You can’t have a total solution if you are missing a critical piece,” said Civello, referring to WAN infrastructure as an obvious gap in an offer that includes hardware, networking, business process planning, managed services and more.

In part this approach is a defensive maneuver, Civello said. “More and more we were seeing a trend where the carriers themselves were coming in and providing total technology solutions — selling hardware, selling professional services, selling managed services,” she explained. “We said, ‘OK, no more are we going to let the carriers walk in the door right after we sold the router because they are going to take a lot more than just the circuit. We need to put the game back on, full press.’”

The approach has been helped along by the April 2008 acquisition of Calence LLC, an IT services company that specialized in building and managing complex networks. The acquisition added to Insight’s capabilities around networking, advanced communications and managed services. And, it added to Insight’s net sales of networking and connectivity solutions to the tune of a $600 million a year combined run rate, according to a press statement announcing the acquisition.

By July, connectivity solutions were moved under the Calence managed services practice. “Calence has packaged networking solutions and offerings that will enable the broader Insight sales force to be better equipped to identify, sell and fulfill carrier opportunities among both existing customers as well as prospects,” said Michael Fair, founder of MarketRace, a channel consulting firm. “The most successful VARs are putting dedicated carrier support teams in place or making acquisitions [of companies] such as Calence in order to properly deliver these services. Others are teaming with agents in order to get access to the expertise and dedication required to be successful.”

The acquisition of Calence also means that “Missy’s team” is expanding. “We are now in the process of reorganizing so that my team will include six overlays and potentially four back-office [people],” she said.

Calence already has the talent; it has been doing provisioning as part of its telecom expense management offer, but it did not have an agency agreement. “They are just coordinating with the carriers from an operational perspective, so, we are going to be looking to see how we can retool that to use the agency we have,” Civello explained.

On the sales side, the team will include experienced solution sellers. “They already sell our managed network operations center; it’s an NOC for your network. They sell telecom expense management. They sell business process mapping. And, they already sell connected real estate. To ask them to sell connectivity within that will just be a natural extension of what they already do,” said Civello.

Civello said integrating the businesses is expected to be completed by the end of the year, so Insight can start 2009 strong.

“Despite our success, I don’t think we are successful enough,” said Civello, noting she has only tapped a fraction of Insight’s sales power. “It started out very grass roots and folks — when the team diminished — lost a little faith in it. It’s now back, and it’s here to stay and our number and metrics support that it’s only going up.”

Civello said connectivity solutions sales are up 128 percent since she joined 18 months ago. “I’d like to see another year of double-digit growth in 2009,” she said. “The giant is waking up.”

Civello would not disclose the number or percentage of Insight’s 30,000 customers that also buy connectivity. Insight serves the range of business customers — from small to multinational. In fact connectivity is ahead of the curve, leading Insight’s five-year plan to become a global VAR, beginning in 2009.

All of its carrier vendors save one are global service providers. These include AT&T (T), Qwest Communications International Inc. (Q), Global Crossing Ltd. (GLBC) and Sprint Nextel Corp. (S). Access aggregator MegaPath Inc. rounds out the vendor pool. When Civello came in, she said she cut some of Insight’s agency agreements in order to reduce carrier relationship management tasks. She is considering bringing in a master agency to manage relationships outside the core five Insight maintains today. The holdup is a high standard that Insight requires of its partners.

“We are trying to find partners we absolutely would bank the Insight reputation on,” she said. “We need tried, true and tested.”

She also said Insight looks for partners that will engage in a collaborative relationship, meaning they cross-sell each other’s products and services. “So, we need to look for [carrier] partners who are OK with [selling] bandwidth only, so that we can provide our value with the hardware and [managed services].”

“Qwest is committed to working with partners like Insight that want to provide superior service to customers with Qwest’s world-class communications solutions,” aid Sandy Spencer, vice president, Qwest’s Business Partner Program.

Insight focuses on larger bandwidth sales like MPLS networks. It will sell PRIs as part of a total solution, but doesn’t sell POTS unless it’s a backup plan. “It’s more strategic efforts as opposed to transactional efforts,” Civello explained. “We are not transaction focused. That’s not what gets us excited.”

“We don’t try to just shop all carriers across the board. We pick the carrier that is going to align best with the solution. Maybe it’s based on a region. Maybe it’s a client preference. Maybe it’s a carrier the client does business with. We are going to live and die by our partnership. We need our partners in exchange to do that for us.”

It’s clear Insight’s traditional hardware partners understand the relationship. They pay to play, sponsoring demo areas and conference rooms and even “billboard” space in the sales stadiums, the multitiered arenas where the salespeople work. They sponsor employee activities and training and set up tabletop displays with collateral and swag for the sales reps. “It’s all about mindshare,” Civello said, explaining the trade-show-style marketing blitz. Some of the vendor partners even have their employees working onsite to help with sales. Lenovo, for example, has three sales support people parked at HQ.

Curiously absent from this promotional party are carriers. “Carriers haven’t been big on the touch and feel,” said Civello. “My goal is to have carriers or master partner on site.”

Insight’s renewed emphasis on carrier services paired with hardware sales puts the company squarely in the path of rival CDW Corp. While the $8 billion VAR can hold its own, smaller VARs and telephony agents may be wondering about how to replicate what Insight is doing — albeit on a smaller scale — to compete. “Smaller agents should look to team with VARs that have a customer need for carrier services but don’t want to invest in standing up a dedicated support infrastructure,” said consultant Fair.