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Khali Henderson

Khali Henderson, editor in chief of Channel Partners, draws on more than two decades of experience covering telecom and IT for her observations about the technology and business trends impacting the channel.

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Email: khenderson@vpico.com
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Agents vs. VARs: Smackdown or Mashup?

By Khali Henderson Comments
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Khali HendersonWhen telecom's leading master agencies got together at the 2011 roundtable, the discussion quickly turned to agents vs. VARs. This is a conversation that I am having on a frequent basis – not only with the master agents, but with independent agents and members of the Cloud Convergence Council and also with colleagues at CompTIA, the IT association with which we teamed to conduct a study and workshop on Agent-VAR partnerships.

Agents, on more than one occasion, have told me they are concerned that their carrier suppliers are turning to VARs in increasing numbers. One reason they point to is that VARs are more likely to be exclusive than to manage multiple carriers. Master agents participating in the roundtable pointed instead to VARs' close relationships with customers; apparently not all agents are as good at staying in front of the customer as they would have you believe.

That said, master agents said in their experiences, VARs require more handholding and that they have had to set up separate structures to support VARs or have them team with other telecom-centric subagents.

In contrast, the CompTIA-Channel Partners survey looked specifically at partnering trends between telecom and IT channels. The study found that half of both groups currently participate in up to five partnerships. These relationships predominantly are focused on VARs selling carrier services through the agents; though there is some activity going back the other direction.

The Agent-VAR partnering survey also showed that both groups plan to increase partnerships in the year ahead. For the agents at least, the emergence of alternative delivery models, such as cloud, were tied in some measure to the increase.

This begs the question of which channel partner is better equipped for this next phase of technology delivery. The Cloud Convergence Council, which Channel Partners has formed along the The 2112 Group, has been tackling this aspect of the agent vs. VAR issue, but in a sideways manner. The council members have been discussing instead what skill sets that each partner group has will become most valuable. An early conclusion is that a technical sales role will predominate the cloud era. This, interestingly, combines strengths from both channel models.

It also means that agents' and VARs' paranoia about losing business to each other is at once validated and dispelled since it is the agents and VARs that can incorporate both skill sets that most likely will rise to the occasion. Neither it seems has the clear advantage in this new era.

The pursuit of the technical expertise is a strong advocate for partnering or the ultimate Agent-VAR mashup -- M&A. However, it could be that talent retention will join account dominance and revenue protection as reasonable justification for continuing ag agent vs. VAR smackdown.

It will be interesting to see how it all plays out. Channel Partners and its content partners will be considering these issues with the intent to share best practices, so stay tuned.

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