Telarus: Technology Advisors Set to Seize Revived Tech Spend

TELARUS PARTNER SUMMIT – New data from technology solutions brokerage Telarus shows an openness from CIOs to engage more with technology advisors. However, the channel must make more strides to achieve mainstream acceptance.

Telarus at its annual partner summit shared a study it commissioned from Constellation Research on how technology decision makers perceive the technology advisor – historically known as the telecom agent – channel. The study, featuring responses from CIOs, chief digital officers, chief technology officers and chief digital and artificial intelligence officers, said showed widespread interest in using some form of a technology advisor for their purchasing decisions. Constellation vice president and principal analyst Dion Hinchcliffe said about 93% of CIOs rely on trusted technology advisors or want to. The survey concluded that “broad interest” exists for technology procurement advisory from people whom peers have recommended or possess deep expertise.

Constellation’s Dion Hinchcliffe

Ninety-three is a big number. But then comes the gap. Constellation in its 2023 Digital CXO Survey found that 48% of the top digital CXOs spend 25% or less through channel partners or other consultants. For Hinchcliffe, that gap points to an unmet need.

“Channel is underutilized. There’s an open opportunity, and there’s a hunger for it,” Hinchcliffe told an audience of Telarus channel partners in Dallas. “They just don’t clearly identify it as much as they could.”

IBIS World measured the U.S. management consulting industry at $329.7 billion in 2022. In contrast, Telarus CEO Adam Edwards, estimated that advisors generated $2.1 billion. But Edwards and peers in the tech services distribution (TSD) space are future-casting a world where technology advisors play the type of role that mega consultancies like Deloitte, PWC and KPMG currently play.

Telarus’ Adam Edwards

“When it becomes a normative behavior when people say, ‘We’ll just call McKinsey,’ that’s where we want to be,” Edwards said. “That’s where we need to arrive – when CIOs say, “Just talk to your advisor. Get that person in here.’ That’s the behavior we want. That behavior is not does not exist today, but it will. And when it does exist, that’s when we’ve really arrived.”

Select Communications’ Jerry Goldman

For Jerry Goldman and his company Select Communications, that sort of behavior exists for about 20% of customers. The rest may turn to Select for more one-off decisions or specific technology categories.

“It’s encouraging to hear that the numbers are high with CIOs wanting to lean into an outside source for advice or guidance. That’s encouraging. We see that as well as we go into the market,” said Goldman, who added that there remains work for Select and other partners to do in in growing market share and customer stickiness.

Spending Trends

Constellation’s research also points to a new wave of tech spending that partners will look to ride. The survey, conducted in May and June 2023, found that only 6% of CXOs viewed cost cutting as a top 2023 priority.

Topics like artificial intelligence (AI) and machine learning (ML) have captured the attention of the C-suite and given IT a wider leash for spending.

“A year ago, when we stood up here in front of you, AI was kind of a glimmer in the eyes. Now every CEO is been asked by boards whether she or he has an answer to, ‘What is ChatGPT?'” Telarus chief revenue officer Dan Foster said.

Hinchcliffe said boards are demanding their CIOs to make big moves to outpace the competition.

“Not soon, but now. So you’re gonna see a lot of buying and [attempts] to figure out what the tech stack is going to be. Lots of experiments, and then they’re going to figure out where that’s that’s actually going to go,” he said.

Telarus’ Dan Foster

This rush of investment represents a massive shift from when Constellation ran the same study in January.

“It was nuclear winter. Nobody was spending anything,” Hinchliffe said.

But while tech spending looks healthy, its dynamics have evolved. Ninety-one percent of CXOs said the buying cycle has become more complex in the last five years. That stems in part from increased bureaucracy and an increasing number of people involved in deals. Hinchcliffe said partners will benefited from helping buyers “streamline” those processes.

He also added that partners need to pay attention to “DX,” namely, digital experience that integrates the various experience silos: end customer, employee, partner, etc. Hinchcliffe said those tech stacks will increasingly come together.

Growing Partner Base

Foster rolled out several numbers demonstrating the increasing size of the Telarus partner base. He said 3,500 partners booked more than half a billion dollars in contract value in 2022. Moreover, 150 technology advisors booked more than $100,000 in new monthly recurring revenue in 2022. That came through both advanced solutions like UCaaS and CCaaS but also “double digit” network growth.

In addition, 940 partners signed up and placed orders with Telarus in the last 12 months, Foster said.

Telarus chief commercial officer Richard Murray told Channel Futures that Telarus has 65% more…