Q&A: Level 3 Channel Chief Mike Jerich

Following its October acquisition of Global Crossing Ltd., Level 3 Communications Inc. tapped Michael Jerich, the former vice president of channel sales for Global Crossing, to head up the new combined channel programs. As vice president of indirect channels, Jerich will lead Level 3s channel initiatives, including Business Partners, VARs/systems integrators and Strategic Alliances.

The indirect channel also has been separated from enterprise sales and Jerich will report directly to Andrew Crouch, regional president North America Sales. “That speaks volumes to our commitment behind this space,” Jerich said. “In our opinion we have an opportunity of a lifetime to build a best-of-breed program to combine the strengths of Level 3 and Global Crossing.”

Nigel Williams, who took over the channel and enterprise sales after longtime channel chief Craig Schlagbaum resigned, will no longer have involvement in the channel. Wayne Dietrich, who had added responsibility for management of the Business Partners, will return to managing the VAR/SI relationships and Strategic Alliances, reporting to Jerich.

Level 3 is familiar territory for Jerich, who joined Global Crossing May 1, 2009, after serving as vice president of sales at Level 3. While at Level 3, he helped build the first indirect channel program and was responsible for the companys indirect sales organization and $75 million in revenue. Channel Partners spoke to Jerich at the end of October about his plans for the new Level 3 partner program. What follows is an edited transcript of that conversation.

Channel Partners: Besides yourself and Wayne Dietrich, who will be managing the channel?

Michael Jerich: We are going to have a national program as well as a regional program. As far as how many heads and who will be doing what, since it’s day 24, we haven’t got through that complexity yet. I can speak to the overall model we are going to roll out, but not who is going to fall in what bucket. …

So on the GC side, we supported anywhere between 25 and 50 partners. … The program we defined there was creating a pod-like structure where we would have … a channel manager that supported them on a national basis. …We didn’t have the regional model focus that Level 3 has with channel managers in each NFL city. Then we had a couple of back-office support people supporting them as well as a dedicated pricing person. We didn’t have the tool in place like MasterStream.

Level 3 obviously has a national focus, but it was limited from a resource perspective. Most of their heavy lifting was done at the regional level. If you take [master agency] Intelisys as an example, they had an individual that focused on most of the master agencies and they had a channel manager in Chicago support the Intelisys subagent community there. They had a channel manager in New York focused on Intelisys subagent community there and so on across the country.

CP: And, so your plan going forward is to mesh them together?

MJ: The beauty of this integration from a channel perspective is that the two models although different really complement each other. What we are going to do moving forward is have a team of national partner managers that are going to focus on our large master agencies being the point of contact into the organizations specifically for headquarters. … We will rely heavily on the regional channel managers to support the subagent activity and deal flow that comes through on a regular basis.

CP: Level 3 had just four master agents. I assume the combined company will have more.

MJ: We are going to have a partner tier of master agents. How many there will be we don’t know. We are still trying to work through both the synergies of both programs and to define for us what does a master agent mean. There will be a master agent, upper echelon tier for the program.

CP: Do you know how many master agents the combined company has now?

MJ: No. On the Level 3 side, they had four. On the Global Crossing side, we didn’t call them master agents. They were Platinum Partners and it was revenue based more than anything else. I couldn’t tell you today, but if I were a betting man, I think it will be in the neighborhood of five to 10. We are not looking to have 30 to 40.

CP: Will you have direct relationships that are not with master agencies?

MJ: We are going to have partners involved in the program that have a traditional direct sales force model that will have a direct relationship with us.

CP: Are you planning to issue new agreements?

MJ: We are looking at it right now. My perspective is that we will have a unified contract amongst both companies. What that will entail, I don’t know yet. For the time being, we are going to honor the commitments to the contracts that are in place. At the appropriate time, we will roll out a new contract and have everyone sign it. Whether it’s the Level 3 contract or a flavor of both, quite frankly, I am trying to get my arms around that.

CP: Both companies aggregate with master agents, and neither has a lot of direct relationships. Are you going to continue that approach?

MJ: I don’t see us going on a massive recruiting spree. It could conflict with our master agent model that’s out there. What we will do is we will focus on select partnerships that make sense and give us potentially a different geographic scope and a different subagent base that might exist today. We are not going to go on a massive recruitment spree to bring another 100 partners into the program. If we had a dozen a year that would be successful in my opinion.

CP: It sounds like you will be focused on the two-tier (master agents) and then on strategic direct relationships?

MJ: Yes, we will be heavily focused on the master agency but still keenly focused on the direct relationships that exist. What we are going to try to do is make sure we are getting the value out of the partnerships we have today and maximize those partnerships versus trying to look for more.

CP: Is there much crossover between the channels?

MJ: Not a whole heck of a lot. I will take Intelisys as an example. Did Intelisys have a contract with GC and Level 3? Yes, of course, but where GC was getting a lot of traction was predominantly with an East Coast subagent base and Level 3, conversely, was getting it with a West Coast subagent base. So where there is overlap, there is a lot of complement between both organizations in terms of go-forward strategy. It was really encouraging. Of all the integrations I’ve gone through, at least from a headcount perspective and an agent perspective, it will be one of the easier ones out there. Granted you have to get through the tough things like contractual stuff, but they really complement each other quite well.

CP: Level 3 has MasterStream as it partner tool. What was used at Global Crossing and what is the plan going forward?

MJ: We had a homegrown version, which was a flavor of our Ucommand on the Global Crossing side. And, then our go-forward strategy is that we are going to blend the two, but settle on MasterStream. It’s something that I think the partners have adopted on the Level 3 side and it’s a tool that is embraced by the entire community. So, we’ll still have both tools working through the transition and the integration. Once it’s all said and done, our pricing tool will be MasterStream.

CP: Level 3 had been focused on non-traditional partners like VARs. Will that  be a focus for the combined channel?

MJ: I think most carriers out there are trying to figure out how to penetrate that VAR community, right? … So that VAR community is something we will continue to focus on whether that will be through a master agency model or whether it will be a direct relationship with partners of the likes of CDW or Presidio, which we have today, will be TBD depending on the partnership.

CP: Level 3 had projected 10-15 percent of sales flowing through the indirect channel by the end of this year. Is that going to be realized?

MJ: I can’t speak per se for Level 3 where they are at today, but if I had to guess based on what I saw on the Global Crossing side and what I am seeing at on the Level 3 side, we are in the neighborhood of 10-20 percent of overall sales.

CP: What are your goals for the program in 2012?

MJ: Looking at the goals right now, one is trying to make sure that we have a unified program across both companies that really complements the synergies that existed. That’s goal No. 1. Goal No. 2, from a sales/revenue perspective, … is to have a material impact. To me, that’s 20-30 percent of sales on a regular basis.

One of the things that we are looking to do and we are trying to define a strategy right now for 2012 is how to use our partner community in a teaming environment with our direct sales force. …

CP: Do you have any enablement programs lined up?

MJ: It will be a core focus in 2012. Training is going to be paramount to our success. One of the things we are looking at as we build out our organization is to make sure we have the staff in place to train partners that are under the hood today not only from a product positioning standpoint for folks that understood Level 3 but not GC but conversely as well. … The low-hanging fruit is just making sure that we have processes and training in place to help make it easier to do business.

CP: How long with the integration take?

MJ: … As it pertains to the indirect channel, I would really like to get the org structure defined in the next 60 days. … From a contract perspective, that’s something I’d love to have figured out and implemented by the end of Q1. Whether that’s too aggressive or not, time will tell. In terms of the enablement and training and portals and tools, [I would like to] have that starting to be defined at the end of Q1 bleeding into Q2.

CP: Is there a lot of crossover in the products you are selling?

MJ: I think obviously there is crossover. Colo is colo. Private line is private line. DIA is DIA. The one thing that was different on the GC side is the international footprint. Most partners really looked at Global Crossing as the international carrier for MPLS. We bring over that expertise to the Level 3 agent community. When you combine that with the local access from the legacy Level 3 side, it creates a true end-user value add that I think is second to none. It really puts us in the enterprise space competing with the AT&Ts and Verizons.

CP: You have experience at both companies. How do you think that might help the transition for the channel?

MJ: I think it’s a huge value add. I spent nearly six years at Level 3, so I understand the companies, the culture the processes; a lot of the players from the executive team are still in place. I helped build out the first program and on the Global Crossing side, I was the leader and the driving force behind what we were trying to do with our indirect strategy. Together, it’s something that can help use internally and externally with the partner community. It gives them some peace of mind that I understand Level 3 and GC and can focus on integration instead of how to navigate through the company.

CP: Is there a particular aspect you can accelerate?

MJ: The way I view it is getting the org structure channel management in place. It helps accelerate our final approach just given the fact that I ran sales for Level 3 on the indirect side and a lot of those players that we hired are still in place today. I am familiar with the people. I think from that standpoint, you are not trying to look at a spreadsheet and trying to decipher someone’s strengths and weaknesses and look at the number and see how it shakes out. I truly know these people since they have worked for me in the past. Quite frankly a lot of them I hired.