By Tara Seals

Posted: 10/2000

Telcos Roll Out ASP Services to Agents

By Tara Seals

Telcos are hopping on the hosted apps bandwagon and taking their agents along for the ride.

ICP Winstar Communications Inc.  (www.winstar.com), for example, announced in June that it would offer Microsoft Corp.’s  (www.microsoft.com) Exchange 2000 Platinum on an ASP basis. The e-mail application will be available to Winstar’s agent and value-added reseller (VAR) channels when Microsoft officially releases the product. Winstar also hosts Microsoft Office 2000 products at its Office Online site rolled out to Winstar’s full sales force July 14.

“We’re pushing heavily on the VAR and channel programs,” says Richard Rupp, Winstar’s vice president of business development for the Internet hosting group. “We want to recruit in a number of different areas.”

Channel partners, Rupp explains, can leverage Winstar’s data centers, “fatpipes” and management advantages to sell Microsoft offerings and convert customers from Lotus, Eudora and other applications. Through MS Exchange 2000 Platinum, applications for messaging, contact management, group calendar and scheduling, collaboration and knowledge management, instant messaging, and workflow will be available to Winstar agents to sell in a managed environment. Commissions will be based on ASP usage.

Qwest Communications International Inc. (www.qwest.com), meanwhile, also has entered the application server space this year, with three programs and one on the way.

First, like Winstar, the carrier offers agents and partners a series of hosted Microsoft Office products to sell for residual commission.

Additionally, the Qwest Cyber.Solutions unit offers enterprise applications, such as SAP AG (www.sap.com), PeopleSoft Inc. (www.peoplesoft.com) and Oracle Corp. (www.oracle.com), on a hosted basis. In this scenario, agents participate in a referral program by sending opportunities to Qwest Cyber.Solutions to sell, in exchange for commission.

Lastly, the company provides infrastructure, including hosting centers and bandwidth, for an independent software vendor (ISV) or an ASP to bring their hosted offering to life, under the Q.ASP program.

“[The ASP offering] enhances what [agents] do, and we call that moving from legacy to light speed,” says Craig Schlagbaum, Qwest’s director of partner programs. “This is an area that the channel hasn’t really participated in historically, and now they have the opportunity. It’s a whole new area of things in their tool bag to sell that they never had access to before.”

On the horizon is “AppExchange,” a platform Qwest is programming and designing for hosted applications built on Windows 2000, scheduled for release early next year. The carrier plans to attract ASPs and ISVs to offer their applications in this medium, creating a multivendor menu of ASP offerings available in one desktop environment. Agents will be able to sell one application or an outsourced solution consisting of several applications, and earn commission. Applications on the platform will be targeted toward small and medium-sized businesses and will include software such as appointment schedulers, bill reconcilers and payroll software.

“It will look and function just like your desktop internally now–all Microsoft based. We’re moving from vended applications to blended applications,” explains Nik Nesbitt, vice president of Qwest’s business partner program. “The apps will be interoperable, so you can cut and paste and connect one application to another, so your hosted payroll may be from company A, but you can tie it seamlessly to your hosted company ledger from company B.”

“Agents will be able to sell that all day long,” he continues. “And it’ll be a relatively easy sell because of all the education we provide and all the help bubbles and so on in the software itself. An agent should be able to walk in and say, ‘Not only am I selling you a T1 and some voice channels, but here’s an expense application tool as well.'”

Agent-supported carrier Telegroup Inc. (www.telegroup.com), a Primus Telecommunications Group Inc. (www.primustel.com) company, plunged into the agent ASP scene in August with its first-to-market web portal, www.telegroupbiz.com. The site was created expressly for agents, designed from agent suggestions, as a marketplace for outsourced services such as web hosting and technical applications.

“We’re not attempting to be a Yahoo! [Inc., www.yahoo.com],” says Denise Boerger, Telegroup’s vice president and general manager. “We’re trying to be a place where customers can come to manage their business from an IT, software and telecom perspective, all at once.”

The site protects commissions by prompting visitors for their agent’s ID and tracking the links that customers come from. The agent can market the services from his or her website and provide a link back to the Telegroup portal. The site also offers live help and “e-gauge,” a survey tree that helps customers identify which products fit their needs. Telegroup also offers single billing and bundled packages.

“The web-hosting app is easy, very few barriers to entry,” says Boerger. “The web does it all for you; all you have to do is market your company.”

The site also has extensive back-office support. Telegroup parent Primus has implemented its own data centers, and will provide the web-hosting services, manage the help desk and issue IP addresses over its network. Boerger also sees an immense opportunity for agents in future application offerings.

“Our goal is to be a total provider, so an agent can sell a complete outsourced IP solution,” she says. “The cost of IP support is so expensive, and for middle companies, spending $100,000 on up per person is prohibitive. We position ourselves and our agents to be experts in telecom, so companies don’t need these people. Agents will sell Microsoft, [enterprise resource planning package] PeopleSoft, sales packages. … It’s a complete outsourcing model.”

Amidst the hullabaloo, master agent Kieren J. McCobb, president of TeleConfusion Removal Inc., agrees, “You have to diversify, to be more of a total solutions provider to your target customer.”

However, he warns that getting into the ASP business requires some thought.

For example, most agents have people that send them leads, colloquially known as “bird dogs.” McCobb says, “When someone’s moving offices, good sources for leads are commercial real estate, furniture and carpeting salespeople, moving consultants, architects and office space design planners. In the ASP world, your bird dogs would be different, tending more toward LAN or data consultants, and you would need to get comfortable with that. It’s a population not many agents have yet penetrated.”

Telegroup agent Jack Mills from DC Network (www.dcnetwork.com) says the back office also is a concern.

“If the back office goes down, not only will you lose your hosted services contract, but you’ll also jeopardize your relationship on the other services,” he says. “If someone’s site goes down, it’s almost the same thing as having their toll-free go down. You can’t just put that business anywhere.”

Despite this concern, he hopes to triple his existing revenue by selling ASP services.

“With more complicated services, people need someone to turn to that they trust,” he says. “There’s new business out there for data and that’s perfect for agents. It’s all about one-on-one contact, and the big companies don’t have it.”

He continues, “It’s 10 times easier to sell web hosting than long distance. I’m hoping to build on this so if I sell hosting services, when I build the customer’s confidence level in me, I can turn around at some point and sell them the voice and the DSL. It’s a nice segue.”