https://www.channelfutures.com/wp-content/themes/channelfutures_child/assets/images/logo/footer-new-logo.png
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Master Agents
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
    • Diversity & Inclusion
  • MSSP Insider
  • MSP 501
    • Back
    • Apply Now
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • Videos
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
    • Channel Educational Series
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
    • Channel Convergence
  • Resources
    • Back
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Content Resources
  • Awards
    • Back
    • 2021 MSP 501
    • Circle of Excellence
    • Excellence in Digital Services
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • DE&I
Channel Futures
  • NEWSLETTER
  • Home
  • Technologies
    • Back
    • SDN/SD-WAN
    • Cloud
    • RMM/PSA
    • Security
    • Telephony/UC/Collaboration
    • Cable
    • Mobility & Wireless
    • Fiber/Ethernet
    • Data Centers
    • Backup & Disaster Recovery
    • IoT
    • Desktop
    • Artificial Intelligence
    • Analytics
  • Strategy
    • Back
    • Mergers and Acquisitions
    • Channel Research
    • Business Models
    • Distribution
    • Master Agents
    • Sales & Marketing
    • Best Practices
    • Vertical Markets
    • Regulation & Compliance
    • Diversity & Inclusion
  • MSSP Insider
  • MSP 501
    • Back
    • Apply Now
    • 2020 MSP 501 Rankings
    • 2020 Hot 101 Rankings
    • 2020 MSP 501 Report
  • Intelligence
    • Back
    • Galleries
    • Podcasts
    • Videos
    • From the Industry
    • Reports/Digital Issues
    • Webinars
    • White Papers
    • Channel Educational Series
  • EMEA
  • Channel Chatter
    • Back
    • People on the Move
    • New/Changing Channel Programs
    • New Products & Services
    • Industry Honors
    • Channel Convergence
  • Resources
    • Back
    • Advisory Boards
    • Industry Organizations
    • Our Sponsors
    • Content Resources
  • Awards
    • Back
    • 2021 MSP 501
    • Circle of Excellence
    • Excellence in Digital Services
    • Top Gun 51
  • Events
    • Back
    • CP Conference & Expo
    • Channel Evolution Europe
    • Channel Partners Event Coverage
    • Webinars
    • Industry Events
  • DE&I
    • Newsletter
  • REGISTER
  • MSPs
  • VARs / SIs
  • Agents
  • Cloud Service Providers
  • Channel Partners Events
 Channel Futures

Strategy


Digital Transformation

Agents Find Digital Diversity Key to ‘Land And Expand,’ Evolution to DSP Model

  • Written by Lorna Garey
  • January 29, 2018
Agents are acting as digital-service aggregators.

“Security, cloud and contact center are on fire,” says Amy Bailey, VP of marketing for Telarus. “Our numbers have exploded as partners are selling more services into their current customers. SD-WAN has gone from something people were just starting to discover 18 months ago to a conversation in every sales meeting.”

As marketing lead for master agent Telarus and a member of the Channel Partners & Channel Futures advisory board, Bailey has a bird’s-eye view into how agents are stretching their wings well past traditional telecom and positioning themselves as full digital services providers. Most have no choice — sales of circuits and other telecom products that once yielded big residuals have flattened or are in decline. PwC says that over-the-top (OTT) players have increased their dominance in core communication services such as messaging and voice. WhatsApp, Viber and Apple iMessage represent more than 80 percent of all messaging traffic, and Microsoft Skype accounts for more than one-third of international voice-traffic minutes, the consultancy reports. ARPU for North American telecom providers dropped from about $41 in 2006 to $36 in 2016. That translates into less revenue for agents.

To compensate, agents are acting as digital-service aggregators, sourcing what customers need, in a pay-as-you-go subscription model, from suppliers you might not expect. It’s the ultimate way to “land and expand”  — leveraging an anchor application like UCaaS and expanding the relationship with the customer.

For example, Cylance VP of worldwide channels and alliances Didi Dayton says the company has a dedicated cloud partner program, where digital or connected-services providers can deliver the company’s next-gen endpoint security offering to customers on a subscription basis.

“We designed some things that would be easy for partners to offer as a services solution,” Dayton told Channel Partners. Cylance offers deal registration, sales incentives and spiffs, proposal-based MDFs to enable demand and lead generation, and volume incentives and eligibility for rebate plans. Sound familiar?

Or consider Nutanix. The company’s hyperconverged infrastructure systems are more and more being sold as software under the Nutanix Enterprise Cloud model.

“As we transform to a software company and look to broaden our customer base, the channel becomes even more critical to establish new connections for us,” Rodney Foreman, the company’s newly appointed VP of global channel sales, tells Channel Partners. “I will lead Nutanix’s channel organization to have an advantage when working with resellers, system integrators and service providers.”

Scott Mohr, director for data center and cloud with Cisco’s global partner organization, says there’s an increased focus on “land and expand.“

“All of the various pieces build on top of one another for a cloud-like infrastructure that continues to lead to another service,” said Mohr, adding that recurring revenue streams, new consumption models, multicloud cross selling, and containerized programmability add up to even more partner opportunities.

In fact, technology solutions provider Carrier Access recently added the full suite of Cisco products. Shane Stark, director of operations, says the Cisco practice will give Carrier Access entrée to larger clients. But it’s not stopping there.

“We’re working to add more security services,” says Stark. “It’s the hot topic right now, and the time is right.”

The list of suppliers courting digital services providers goes on: Liquidware wants agents out there selling desktops as a service, while Effortless Office has been on a growth path with its melded virtual desktop and security bundles. Talkdesk delivers advanced cloud-based, contact-center-as-a-service technology and has raised $25 million in funding from Salesforce Ventures. Through its AppConnect contact center app store, partners can offer one-click installations, 30-day free trials and pay-as-you-go on a variety of business applications. Customers need disaster recovery? Carbonite, Datto, Veeam, Zerto and others provide as-a-service options with fulfillment by the supplier.

IoT bundles from AT&T, CenturyLink, Verizon and other familiar providers let digital services providers sell what WTG CEO Vince Bradley calls “probably the most important initiative for our industry today.” SD-WAN has exploded, with cloud-first and channel-focused providers like Bigleaf Networks working closely with partners to facilitate the “X-as-a-service” trend.

“It’s not SD-WAN to replace or augment MPLS networks,” says Bigleaf co-founder Jeff Burchett. “Rather, it’s SD-WAN specifically purpose-built for connectivity to public-facing cloud and SaaS applications. It’s less about building a more resilient hub-and-spoke private WAN. It’s more about ensuring that the voice in your UCaaS service is crystal clear and your desktop-as-a-service application and all your SaaS applications are available and performing the way you want.”

In other words, DSPs sell business outcomes leading to digital transformation, not just speeds and feeds. Distributor Tech Data even offers “Tech as a Service,” allowing partners to bundle endpoint hardware, software and services into a single monthly subscription. Everything from raw CPU cycles to wireless LANs, security, business continuity, storage, desktops and enterprise mobility management can be delivered in a subscription model — which is exactly how customer CFOs want to pay for IT.

IDC expects spending on public-cloud services and infrastructure to grow 23 percent this year, to $160 billion, on the way to $266 billion in 2021, reflecting the ongoing shift from capex to opex among enterprises. The analyst firm also says that by mid-2020, SD-WAN will be a mainstream technology — one that represents more than $6 billion in spending.

“Midmarket and enterprise customers are now running to the cloud at an accelerated rate; the question is, are they running to it with you or away from you?” says Patrick Sheehan, director of channel development at 8×8. “Partners that embrace this shift and proactively lead their customers to it are the ones that are retaining and growing their customer base while increasing revenues.”

Battle of the Business Mods

Conventional wisdom is that the VAR financial model, built around selling premises-based solutions in a capex model where revenue is received and commissions to reps are paid upfront when the job is complete, isn’t sustainable. Larger VARs also draw significant revenue from selling maintenance contracts for those premises-based systems, and as customers move rapidly to the cloud for a variety of IT needs, this cash stream is also declining. It’s a perfect storm.

“The shift to selling cloud services, thus moving to annuity model, is a challenge for these VARs,” says 8×8’s Sheehan.

But which way should they go? Some are pursuing an MSP model predicated on remotely managing a full slate of customer IT assets from a limited number of vendor partners. MSPs face headwinds around the cost of hiring talent to manage customers’ complex on-premises and hybrid systems, maintaining mandated certifications for multiple vendors, and the tendency to sell on price, not value. For small MSPs, a successful ransomware attack can put a major dent in razor-thin margins. Despite a number of DRaaS offerings that promise easy recovery, in our recent Business Continuity & Disaster Recovery Survey, most channel-pro respondents say fewer than half of their customers have effective BC/DR plans.

For other VARs, the DSP model of being essentially a cloud broker, assembling and selling bundles of services that vendors or a specialized partner then fulfill, is more attractive. However, that shift comes with a formidable problem: bridging a move from big-bang sales to an annuity and MRR (monthly recurring revenue) payment scheme. 8×8 is one provider building programs and adding expertise to help its VAR partners through this transition, says Sheehan. It also has an enablement program specifically for agents, including digital marketing for lead gen and sales and sales engineering resources.

Partners are also worried about losing control of the customer relationship. While DSPs may sell on their own paper, they don’t fulfill IT needs day-to-day.

“VARs and MSPs have traditionally invested in technical certifications that have afforded them complete control, and associated revenues, of end-customer solution design, deployment and support,” says Sheehan. “They’ve built a business and reputation leveraging this expertise to ensure customer satisfaction and differentiate in the market. 8×8 gets it, and [that’s] why we’ve invested in a new enablement program that allows partners to continue to be the trusted adviser and provide white-glove support that increases customer stickiness.”

He sees traditional agents adding new resources, like pre-sales engineers and project managers, that enable them to differentiate and add value.

“I call them ‘hybrid agents’ that are starting to morph into something closer to a VAR/MSP,” he says.

An Agent by Any Other Name

Why not just jump directly to a DSP model? In part, it’s the prevailing wisdom that partners who don’t offer their own home-grown services will lack “stickiness.” But the digital-service providers we spoke with for this story say their consultative expertise is every bit as sticky-making as racking and stacking servers, provisioning desktops or anything else a VAR or MSP offers. Pulling the right cloud offerings into a comprehensive, tailored solutions bundle demands a full discovery-and-needs analysis at the customer site, a deep bench of suppliers and the confidence to reach out to other partners for services like Microsoft 365 migrations. From discovery to RFP, that needs analysis process can take months; some DSPs charge for it, some don’t.

“We’re laser-focused on the process with our customers,” says Michael Bremmer, CEO at technology consultant TelecomQuotes.com. “I’m asking more questions about how they use technology and, for key customers, spending ‘a day in the life’ working in their businesses to better understand how to increase productivity. We’re also asking questions like, ‘Want to see the new stuff?’ I’m purchasing IoT gear to use in my home and business to understand how it’s going to be a game changer for my customers.”

While traditional telecom and UC excel as the “landing” part of “land and expand,” Jennifer Gallego, EVP, channel sales at Avant, and a Channel Partners editorial adviser, says the the biggest roadblock for partners looking to offer customers a broad and comprehensive slate of cloud solutions is the accelerating pace of the technology revolution. One consultant we spoke with has 170 suppliers in his portfolio and does business with 20 percent of them regularly.

“It seems like a wave of new service providers are hitting the market every day,” says Gallego. “Agents and VARs can’t do it alone. They need to be committed to rigorous education on the trends that are shaping technology. They need to trust someone that can find the needle in the technology haystack.”

Avant’s position is that partners should not limit supplier choice, arguing that this is where master agents that invest the time to be upstream experts come in.

Bailey also cites the challenge of becoming familiar with new techs and says Telarus is constantly signing on new provider partners.

“We think having specialists that partners can access for complex deals will set them apart from direct reps as well as their competition,” says Bailey. “For partners, becoming an ‘expert generalist’ is key. This takes time. But knowing what questions to ask in a sales meeting can be the difference between a single-solution salesperson and a technology consultant. Our challenge is synthesizing the wealth of information for our partners into digestible chunks.”

Another challenge is staffing up.

“What’s our biggest business challenge?” said Stark. “Hiring talent. Actually, finding it is the hard part.” And, sales people sell what they are comfortable with — and make money at. Slinging circuits is lucrative, and there are only so many hours in a day. Channel leaders need to properly train and incentivize their sales teams.

Bremmer says to avoid getting distracted by all the shiny tech. “Focus on actual business problems,” he says. “Nobody cares how Alexa works. They care what it does to make their lives easier and help them sell.”

On the plus side, agents tend to be naturals at sales and building and nurturing relationships.

“People sell to people,” says one consultant. “If you do a good job, when that person moves to a new company, they take your business card with them. Customers rarely have just one MSP or VAR, so digital service providers have landing space.”

People skills matter. A recent survey by InsightSquared (above right) shows that 62 percent of respondents spend more after they have a positive customer experience. Solve a problem and they’ll keep coming back. But be careful about which providers you work with for post-sale fulfillment, because 64 percent of B2B customers will drop a vendor after bad service, says the consultancy, and half of them will avoid that business for two or more years.

And finally, think about how you position your channel firm. Branding is critical.

“There’s plenty of work to go around,” said one partner. “Don’t paint yourself into a corner by calling yourself ‘the circuit person.'”

Tags: Agents Cloud Service Providers MSPs VARs/SIs Digital Transformation Strategy

Related


  • Top Stories
    Top 20 Channel Stories in March: Telarus, Synnex-Tech Data, Microsoft Hack
    Mergers and acquisitions play a big part in our top stories countdown.
  • Superhero Businessman Ahead of Competition
    Dell Channel Leader Cheryl Cook Touts 'Outpacing' Lenovo, HP
    She also weighed in on the big Synnex-Tech Data merger.
  • Contact center
    Windstream Enterprise Unveils OfficeSuite UC Contact Center Enhancements
    The enhancements help businesses better serve their customers.
  • Mergers and acquisitions
    Converge Technology Solutions Snaps Up Dasher Technologies, with More M&A to Come
    Dasher’s impressive resume and robust legacy will bolster Converge’s existing business and partnerships.

Leave a comment Cancel reply

-or-

Log in with your Channel Futures account

Alternatively, post a comment by completing the form below:

Your email address will not be published. Required fields are marked *

Related Content

  • Welcome to the Future
  • Fortanix Partners Get First Partner Program with New Channel Leader
  • MSP Logically Enhances Security Business with Cerdant Acquisition
  • IBM, Red Hat to Speed Adoption of Celonis EMS Platform

Galleries

View all

10 Ways to Keep Customers Safe with Threat Protection by Year’s End

April 9, 2021

Industry Perspectives

View all

Why Every MSP Should Consider TCO When Selecting a BCDR Solution

April 9, 2021

6 Ways to Ready Your Customers for 5G Security Challenges

April 5, 2021

Endpoint Security Is Huge in the Merging New World of Work

April 2, 2021

Webinars

View all

Top 3 Intel Security Technologies To Help Against Advanced Cybercrime Attacks

April 15, 2021

What to Look For: 2021 Threat Report

April 22, 2021

Health Care and SD-WAN: A Seller’s Guide

April 27, 2021

White Papers

View all

Top Tips: How Resellers Can Leverage Rackspace to Enhance Customer’s Cyber Security Protection with Microsoft 365 Security

March 30, 2021

Top Tips: Optimize Your Microsoft 365 Investment with Rackspace Technology

March 30, 2021

The Smart Approach to Cloud Workload Placement Decisions

March 19, 2021

Upcoming Events

View all

Channel Partners Conference & Expo

November 1, 2021 - November 4, 2021

MSP Summit

November 1, 2021 - November 2, 2021

Channel Evolution Europe

November 30, 2021 - December 1, 2021

Videos and Fastchats

View all

FASTCHAT: How Fortinet Reduces Complexity Through Networking, Security

Strong Customer Experience Needs Strong Partner Experience

December 22, 2020

Happy Holidays from Channel Partners & Channel Futures!

December 21, 2020

2021 Excellence in Digital Services Awards App Open

December 9, 2020

Twitter

ChannelFutures

"Who could ask for more?? These guys bring an awesome energy and always highlight the need-to-know of the channel..… twitter.com/i/web/status/1…

April 10, 2021
ChannelFutures

Anti-Asian racism, and racism and discrimination of all forms, have zero place in our society. #StopAsianHate and t… twitter.com/i/web/status/1…

April 9, 2021
ChannelFutures

MSSP @inc_renaissance promotes Trish Kapos to channel chief. #cybersecurity dlvr.it/RxLQ6g https://t.co/oWCdHeRqIW

April 9, 2021
ChannelFutures

.@GetSpectrum ordered to pay @Windstream more than $19 million for deceptive mailer. #lawsuit… twitter.com/i/web/status/1…

April 9, 2021
ChannelFutures

.@Percona says channel can help with #opensource solutions and #databases for everything from aspirational to must-… twitter.com/i/web/status/1…

April 9, 2021
ChannelFutures

Our latest #Cybersecurity Roundup features @HuntressLabs on @Microsoft Exchange exploitation, @ptsecurity,… twitter.com/i/web/status/1…

April 9, 2021
ChannelFutures

.@SemperisTech unveils first branded partner program. #cybersecurity dlvr.it/RxH4Bq https://t.co/TVjG8xhGNv

April 8, 2021
ChannelFutures

.@PerchSecurity announces its 2021 MSP Threat Report, calling on MSPs to build a mature cybersecurity practice.… twitter.com/i/web/status/1…

April 8, 2021

MSSP Insider

Business advice for MSSPs and news from the broader security channel.

Newsletters and Updates

Sign up for The Channel Report, Channel Futures Update, MSP 501 Newsletter and more.

Live Channel Events

Get the latest information on the next industry-leading Channel Partners event.

Galleries

Educational slide shows and images from live events.

Media Kit And Advertising

Want to reach our audience? Access our media kit.

DISCOVER MORE FROM INFORMA TECH

  • Channel Partners Events
  • Telecoms.com
  • MSP 501
  • Black Hat
  • IoT World Today
  • Omdia

WORKING WITH US

  • Contact
  • About Us
  • Advertise
  • Newsletter

FOLLOW Channel Futures ON SOCIAL

  • Privacy
  • CCPA: “Do Not Sell My Data”
  • Cookie Policy
  • Terms
Copyright © 2021 Informa PLC. Informa PLC is registered in England and Wales with company number 8860726 whose registered and Head office is 5 Howick Place, London, SW1P 1WG.
This website uses cookies, including third party ones, to allow for analysis of how people use our website in order to improve your experience and our services. By continuing to use our website, you agree to the use of such cookies. Click here for more information on our Cookie Policy and Privacy Policy.
X