Khali Henderson's Blog  

Group Editor, Telecom Division and Editor in Chief, PHONE+
khenderson@vpico.com

We spend a lot of time in these pages talking about all the emerging revenue opportunities available to the channel. Cloud computing, managed services, TEM, energy, UC, telepresence, wireless, SaaS, etc. What’s one more? You’ve got the infrastructure in place, just slide one more service over the top, right?

If only it were so simple. There is the matter of training and in some cases certification and ongoing vendor management, not to mention the pre- and post-sale customer support. Really, the ramp on some of these products – hot as they may be – can be significant.

At the same time, customers – understandably overwhelmed by the options – are looking more and more to trusted advisers in the channel to help them sort through the available solutions, recommend vendors and increasingly, manage the whole thing after the fact.

The logical conclusion, then, is that if the demand is there, the startup/maintenance costs of bringing on a new line of business will be justified. And, in many cases, I think that is sound reasoning and the beginning of a success-based business plan for diversification.

That said, this picture looks very different when considering one or two new product lines versus half dozen or more to “round out” your offer.

For that reason, it seems inevitable that more and more partners are going to consider a different model. One of those is going to be specialization. As the breadth of technologies grows, there will be a need for companies that are really great at a few things. This expertise may become very granular, e.g. Bob is the expert on RFID asset tracking systems for retailers; Jane knows everything about international colocation for financial services companies, etc. These will be the go-to guys and gals not only for end-users but for other partners.

Collaboration among partners, then, will become ever more critical.

Another model that might emerge is an aggregator or manager — someone who brings all the specialists together and manages those relationships for the customer in much the same way that master agencies and distributors perform these functions for agents and dealers.

Collaboration, again, is critical to this model.

There are likely other outcomes, but these are just a few I’ve been thinking about. In no scenario can I envision an organization – at least not one of typical partner size – that can possibly do everything that customers require natively. It’s just not financially feasible, and even if it were, it relegates partners to the clichéd description: Jack of all trades, master of none.

One of the early steps towards the new model is the evolving collaboration between VARs and agents (see story, Making Agent-VAR Partnerships Work). These relationships are in varying stages of sophistication and contractual obligation, but the hoped-for outcome is the same: improved customer acquisition and retention. It is no longer possible to expect other partners to respect long-established “territorial” boundaries that are by virtue of technology advancements mostly arbitrary at this point. They will be looking to take wallet share unless you figure out how to work together. If you can’t beat ‘em, join ‘em. Good advice for channel partners of all types — even the ones that haven’t been invented yet.

User Comments !

Khali, I believe that both models, specialist and aggregators, will continue to exist. If we look at a similar industry, the insurance industry, you will find specialists and brokers have been around for years. The view we take on this is which direction you are facing as an agent. If you are facing the provider, you are going to champion that provider, learn everything you can about that provider and become their dominant representative. You are also subject to the ups and downs of those providers product offerings, pricing and service performance. If you are facing the client, you are learning about the client needs, developing the processes and procedures to manage multiple provider offerings and managing the client through their business changes and the provider's performance changes. We have taken the approach of the aggregator (broker). In order to be effective, we offer agents training every Friday for 30 minutes. The intent is 20 minutes of what the provider does, how to recognize opportunities and where to go get the resources to fulfill those opportunities. The remaining 10 minutes is devoted to questions. Beyond that, agents have their sales support personnel from us a resource as well as the resources of the provider. If you take the broker approach (wide) it is hard to be an expert, but through a structured education program and on-the-job training (provider demos, conference calls, etc) you would be surprised how much you learn and grow in a short period of time. Both models will be successful, but we believe that clients will stick with agents that have their best interest in mind. This is a long term view as opposed to quick hit sales. Of the two models, we believe the broker is the way to go.

Posted by: Clark Atwood | April 29 2010 10:21:07