What's Holding Telecom Agents Back From Cloud Computing?

Many carriers now lack the expertise to engage the customer in an IT-focused conversation.

January 27, 2016

5 Min Read
Cloud computing

By Khali Henderson

Khali HendersonDo you sell cloud? If asked, a significant number of telecom agents will now say “yes.” But if pressed, most also will admit that what they mean by cloud is “cloud communications,” aka hosted PBX or UC.

After countless webinars and seminars, after counseling and cajoling by providers and distributors, and even after dire warnings from analysts to get on the cloud computing bandwagon, telecom agents are selling very little cloud infrastructure and applications. Sure, there are exceptions (Channel Partners highlights some of them in its CP 360° awards), but they are in the minority.

Why is this the case? Obviously (and sensibly), the reason they sell cloud communications is that it’s the cloud service most closely aligned with their core business – telecommunications. Yes, technically cloud PBX is an application (in this case a voice application) delivered via cloud. But its predecessors were telecommunications systems more so than IT systems. This matters because it’s easier to sell something if you have an understanding of what it replaces – not only functionally but also the costs and benefits to your customer.

Most telecom agents don’t have this same perspective for selling Infrastructure as a Service (IaaS) or Software as a Service (SaaS). They haven’t spent years positioning and selling IT hardware and software in order to give them a framework for offering the cloud-based alternatives. Put simply – cloud is outside their comfort zone.

Talking about computing-hardware needs or trying to push a business-software application without domain experience to back it up can be high risk. Telecom agents fear appearing incompetent to the buyer – an impression that also could jeopardize sales of core telecom-services solutions. (Likewise, this is a fear that IT VARs have expressed about adding telecom services.)

When something is beyond their skill sets, telecom agents have long relied on their carrier channel managers or sales engineers to bridge the gaps. But, agents now say many carriers lack the internal expertise required to support a telecom agent by engaging the customer in an IT-focused conversation. Indeed, carriers’ own efforts to crossover into IT cloud, particularly infrastructure, have fallen short of expectations. (Many even are selling off the data center assets they bought to shore up their entry into cloud – a blog for another day.)

Facing these realities, you’d think that telecom agents would be reaching “across the aisle” to the non-telecom cloud providers to fill the void. Some are, but many aren’t. There are a few reasons for this:

No pressure … yet. Telecom agents still are doing quite well selling their core services, especially connectivity. Yes, rates are lower, but consumption has grown (ironically, due in part to the increased use of cloud apps), so their revenue hasn’t been impacted, explains Ken Bisnoff, senior vice president of strategic opportunities for TelePacific Communications. Eventually, he says, the tide will turn and selling commodity pipes will no longer sustain them – not to mention that they also are likely to lose that business to a lower bidder or a competitor that can offer both connectivity and cloud. Until they feel the pain, their incentive to invest time and money in learning to sell something new is low. Instead of waiting for the pain to come, Bisnoff advises, telecom agents should think forward and lock in those connectivity services by layering on stickier applications.

No guarantees. Telecom agents are used to counting on having revenue from a sale for one to three years. But with cloud services, many of which are sold on a month-to-month basis, there are no guarantees, notes Jo Peterson, vice president of cloud services for Clarify360 and co-founder of Cloud Girls. For that reason, says Dany Bouchedid, CEO of Colotraq, many partners that are selling cloud infrastructure are offering private or hybrid clouds that have a more predictable revenue stream.

Fear. When it comes to IT cloud, telecom agents are fearful about what they don’t know, which is preventing them from creating the alliances and building a cloud-based IT practice. There are a few easy ways to get past the fear factor: 

  • One is to recognize that they know more than they think they do. Their familiarity with a recurring revenue model, their asset/expense auditing processes and their network experience all apply, says Mike Goodenough, vice president of cloud solutions for BCM One.

  • Two is to familiarize themselves with terminology that is foreign to them, says Dina Moskowitz, CEO of SaaSMAX. Once they are more comfortable, they can ask the right questions that will eventually lead them to the right cloud providers that can support their entry into cloud IT.

  • Three is to seek out a mentor who will help them navigate the sea of “dumb” questions, says Goodenough.

  • Four is to review success cases among their peers that they can reference and model, adds Moskowitz.

Too many choices. Telecom agents also are overwhelmed by the number of choices – not only in providers but in solutions. Cloud is a small word describing a vast number of services. Cloud Girls’ Peterson offers this advice for tackling both:

  • First, focus on a vertical market or application (e.g., something like email that all customers need).

  • Second, within that space, look to experts like Gartner to find the market leaders, narrowing their search for best-of-breed providers that will match up to their existing and/or desired customer targets.

So, what’s holding telecom agents back from cloud computing is a combination of issues – some external and some internal. Eventually, all telecom agents will have to address these issues, even if their answer is not to embrace cloud themselves but to engage a strategic partner that does.

[Disclosures: TelePacific is a client of the author’s firm and she is a board member for Cloud Girls.]

Khali Henderson is senior partner at BuzzTheory, a marketing services firm specializing in technology and channel markets. She has more than 25 years of marketing, communications and content development experience in the technology industry, and is best known for her leadership as the former editor-in-chief of Channel Partners, the telecom and IT industry’s leading channel media and events brand. At BuzzTheory, she heads up business development and serves as chief content officer.

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