Mergers and acquisitions, plus evolving partner demographics and influence, are changing the way some carriers approach their indirect sales contracts. Already in 2012, four providers have revised their agent agreements to enable greater sales coverage, to give partners more compensation flexibility and, in turn, to increase channel-friendliness. Since early this year, EarthLink Business, XO, CenturyLink-owned Savvis and BullsEye Telecom all have revamped their agent terms and conditions, for some similar reasons. Surprisingly, sources agreed that none of those reasons had to do with the cloud or other next-generation technologies; rather, the channel has proven itself a mighty revenue generator, and service providers are eager to maintain, and boost, that power.
The M&A Effect
The trend toward agent agreement revisions kicked off about a year ago as EarthLink Business finalized, and integrated, the purchases of New Edge, Deltacom, One Communications and STS Telecom. Over the past six years, EarthLink steadily has made its mark as a business services provider, starting with the acquisition of New Edge Networks in 2006 and rounding out the momentum in early 2011 with the STS Telecom buy. Once those transactions were completed, EarthLink needed to standardize language for all of its agents. It wanted all of its partners to sell throughout the country, under the same terms.
Masters took to the idea. As of March 2012, EarthLink Business had signed a number of prominent partners: Converged Network Services Group (CNSG), Intelisys, MicroCorp, PlanetOne Communications, Sandler Partners, TBI, Telarus, Telephony Partners, WTG and X4 Solutions. The accomplishment illustrated that EarthLink was eager to empower its indirect sales force, not just align its new assets, "to make them manageable and cohesive, and to sort of sing from the same sheet of music," said Telecom Lawyer's Ben Bronston, a channel-centric attorney who helps partners negotiate carrier agreements.
M&A also had a direct impact on CenturyLink agents who were eager to sell services offered by Savvis, the data center company CenturyLink bought in 2011. Initially, CenturyLink Channel Alliance (CCA) agents were told their commissions on Savvis sales to existing CenturyLink customers would be cut in half and that all prospective hosting sales had to be referred to Savvis in exchange for a spiff on closed sale. Agents balked and controversy ensued. When the post merger leadership realized it wasn't "leveraging the sales capacity of CenturyLink with the Savvis products," as Dale Tucker, CCA's business development director, said in June, it modified the rules. There no longer is a commissions reduction and CCA partners can sell new business with Savvis.
