The CSPs and masters polled by Channel Partners report that VARs make up about 10-30 percent of their channel partners. And in just the 2010-11 time frame, several sources said their VAR enrollment saw significant increases; master agencies Telecom Brokerage Inc. (TBI) and MicroCorp Inc. increased their VAR ranks by 20 and 30 percent respectively. Some carriers, on the other hand, added fewer VARs year over year. MegaPath reported holding steady while TelePacific Communications and XO Communications saw slight increases. Other providers interviewed declined to cite growth rates.
Nonetheless, if sources' predictions pan out, VAR numbers will just keep growing. Master agency World Telecom Group (WTG), for example, wants VARs to make up 50 percent of its partner ranks in 2012 while another master, Intelisys Corp., aims for VARs to comprise 5-10 percent of its channel in the coming year. Among carriers, TelePacific is eyeing 20-25 percent more VARs while Level 3 Communications anticipates adding 10-15 percent. "Essentially, our approach is to vault our VAR partners into a global network footprint and remove the challenge of competing directly for their higher-level services," said Mike Jerich, vice president of indirect channels for Level 3. CenturyLink, Windstream, EarthLink Business, MegaPath and XO all said they, too, intend to augment their channels with VARs but did not provide target figures.
Working with VARs is important to carriers and master agents because, in general, VARs understand data, networking and infrastructure better than telecom agents. "It's not that they are better salespeople, but they understand selling solutions to their customers; they're not as price-driven" as agents, said J.R. Cook, vice president of channel partners for EarthLink Business. They also have stickier customers, sources say. All of this heightens VARs' appeal to service providers and master agents, especially those that are placing greater emphasis on complex cloud services such as desktop and server virtualization — solutions that are not easy to design and demand levels of knowledge that many agents don't yet have. Master agents including TBI, Converged Network Services Group (CNSG) and Telarus report more data-oriented sales — Ethernet, MPLS, Internet access and hosting services, for example — coming in from VARs as they fix on that partner demographic. Indeed, a key reason carriers and agencies want more VARs is that those partners boast more revenue per sale than traditional agents because they're selling to larger customers, who often have more than one location. But all of that creates a new consideration for carriers and master agents: VARs need different kinds of support than agents.
