Integrated Circuit

Posted: 03/2005

Integrated Circuit
Agents, Systems Integrators Collaborate
By Kelly M. Teal

The era of long-distance-only sales has become a distant memory, with the trend toward convergence mandating that telecom agents redefine the term channel partners to include systems integrators. You know, those guys with all the technical expertise agents generally dont want to take the time to learn  those guys many master and subagents often look to when clients need network security, hardware, in addition to telephony systems. Such partnerships usually go back just a few years and, as it turns out, are working well.

Before they started AB&T Telecom, the people who run the master agency already were working with several systems integrators. They formed their agency, no strangers to the benefits of teaming with experts who could address aspects of a deployment AB&T could not, without investing a lot of time and money. Systems integrators have been some part of our telecom business strategy from the beginning, says Glenn Taggart, vice president of AB&T.

He explains that integrators, with long-established customer relationships, make collaboration with AB&T an ideal way to expand on each entities contacts. By leveraging our service offering along with their solutions, they are able to offer a more complete solution to their customers. This also assists in fighting off the systems integrator competition inside their accounts. Every time another vendor comes into one of their accounts, they run the risk of losing a piece of business inside that account, or driving down already low margins on existing solutions. AB&T does not compete with its integrators for business, and those partners abide by the same ethics, creating a symbiotic relationship that Taggart says rates eight on a scale of one to 10.

Thirty-five percent of AB&Ts signed agent contracts are with systems integrators. We have three different ways for a systems integrator to earn money on the sales of service, Taggart says. One of those options is the same as our typical telecom agent, he adds, not wanting to reveal the details of the companys different contracts.

Likewise, NextiraOne North America will not spill the beans on any numbers, including the tally of telecom master and independent agents it serves. Still, this systems integrator  which dates back to the 1970s and now specializes in IP networks  operates a channel that doubtlessly affects many in the telecom world. With the recent restructuring of its business strategy to, according to company statements, better serve telecom agents and others, NextiraOne, sees its work in the channel as integral to the proliferation of emerging technologies. The company operates as a channel for equipment vendors including Nortel Networks and Cisco Systems Inc., finds there is little that would improve the way typical telecom agents and systems integrators work together.

Generally, better cooperation among communications industry players would benefit everyone  whether they are SIs, equipment manufacturers, communications service providers, resellers or carriers, says Shannon DeYoung, director of marketing communications and programs for NextiraOne. We believe its in the best interest of all involved if equipment manufacturers help support new business models and the companies implementing them, as ultimately, it will create loyalty by end users for their own products. To that end, our experiences with our channel partners have been very rewarding.

Systems integrators seem to view telecom agents as experts whose knowledge they can bolster, not replace or supplement. John Drake & Associates, or JDA Consulting, is an Illinois-based network services consulting firm that has worked with master agents for more than six years. Our desire is to provide our clients with comprehensive solutions, Todd Miller, network services director, says.

Often in order to solve a business problem we must integrate technology solutions from numerous areas to include infrastructure, network operating systems and bandwidth. Working with a master agent allows us to not only deliver these disparate areas within a single comprehensive strategy, but also present a single entity to the client.

Other benefits of working with master agents include being able to provide one contact for a range of voice and data services, two-way lead generation and top-notch offerings, Miller says. The relationship I have with my master agent allows me to offer those services to my clients with confidence that they will be taken care of as if I was servicing them myself, he notes.

JDA brings in up to 15 percent more business as a result of working with a master agent, and on a scale of one to 10, Miller rates his channel partnership at a nine. Not working with a master agent would increase my workload, of course, and force me to directly communicate with numerous telco carriers whose sales forces change regularly, he muses. There isnt any continuity in dealing directly with carriers.

Continuity, or the lack thereof, is something agents, both master and sub, know all about. Which is another reason they unite with vendors who have proven themselves. No one wants to put his or her company out unnecessarily, and master agents want to be sure integrators return the partnership favor by generating telecom business for them. When you partner with somebody and do business back and forth ... its [got to go] beyond the referral thing, opines Rick Stern, president of master-agency-turned-reseller Network Innovations. His company works with about five vendors, but leans heavily on two. He calls the collaborations very successful, perhaps due in part to the nearly 20 percent revenue increase such joint aims have brought Network Innovations over the past year.

Network Innovations belongs to the viaVerio partner program. Stern says that agreement often brings his company people that we work with ... to provide services they dont. Network Innovations interaction with Verio generally amounts to unexpected income.

And then theres BroadSky Networks, a different breed of channel partner that sees both the master agent and systems integrator sides of things. The company resells broadband satellite services to end users, but also to systems integrators, master agents, VARs and others. BroadSky pays each of its partners a cut, while encouraging them to do their own billing. This keeps their brand and name in front of the client and takes the onus off BroadSky, says President Mike Mudd. But the tactic pays everyone in terms of residual commissions, customer loyalty and ongoing referrals.

Heres how the process works. A channel partner, for example, is working on a data network and discovers there is only 80 percent terrestrial coverage. BroadSky steps in as the last-mile solution for satellite. [Channel partners] will bring us in for the satellite services and then well introduce [those partners] to our VARs and integrators, or hardware providers, that are providing satellite VPN equipment, Mudd says.

Based on the number of users, Mudd says BroadSky proposes the lowest-cost solution, which simultaneously provides the best service. ...that way, our master agents dont have to have dozens of different partners, because were resellers of multiple satellite suppliers. Mudd elaborates that his Bend, Ore., company offers master agents fairly aggressive commissions.

The industry has changed, he notes, responding to a movement that brings systems integrators into the traditional channel. Thats actually been very beneficial for us based on the fact that ... broadband is no longer a nice option, its a must-have.

These partnership interactions are, in Mudds words, all over the place. He says, at first, agents and integrators often feel trepidation about working together. Not only might there be concern about customer-stealing, but a lot of agents are not certified on a certain vendors equipment, making integrators all the more determined to be sure that anyone who does work on that equipment is certified to do so. And yet, once partners realize the project works and theres a little bit of margin in it for them, and its giving them new sites and helping them win business based on the fact that theres really no other solution ... then that hesitancy begins to drop, Mudd says.

Telecom partners of all backgrounds and intent seem satisfied with the trend toward partner convergence. Working with systems integrators challenges agents to learn new aspects of the industry. Customers pleased with installation and service lead to positive referrals and recommendations. And partners with double-digit percentage increases in their coffers are likely happiest of all, making money through networking.