Not All VARs Are Created Equally

I fully expect the cover of the February issue of Channel Partners magazine to become a dartboard in more than one telecom agent's office. With their suppliers' fawning over VARs, it's only natural that some agents will suffer from an inferiority complex. The lament, "What am I, chopped liver?," comes to mind.

Competition generally is a good thing; it stops us from resting on our proverbial laurels. And, in this case, there is a message to the agent community from their suppliers with the following advice:

1. Improve your trusted adviser status with customers.
2. Improve your technical understanding of customer IT environments, particularly in the cloud.
3. Improve your ability to bring a unique knowledge set or application to the table.
4. Improve your ability to deliver more of customer spend.

This is not to say that some agents aren't doing these things already, but suppliers generally perceive VARs as better positioned in these areas.

That said, agents have long complained that their carriers are moving to VARs for wholly different reasons, as I wrote about in a fall 2009 blog, "Agents Circumvented?" Carriers' motives, they said, were:

1. to get around agents' multicarrier approach with VARs that are more likely to be exclusive
2. to lower the commission payout by moving to VARs with a one-time referral model

There likely is some truth to their claims, e.g., some channel managers probably recruited VARs in this manner for these reasons. But it's not a strategic approach required for the current carrier portfolio, which now includes IT products delivered as a cloud or managed service.

Carriers for the most part have been pleased with the results their professional agent channels can bring them. Their struggle is that there are not more agents that are top performers. They are salivating over the huge numbers of VARs — probably 10 times more than agents — that could potentially join their ranks.

However, they are finding out very quickly that like agents, not all VARs are created equally. There are many VARs that signed as agents or subagents and are non-producing; they can't seem to make the transition to the services model usually because they are small or can't devote resources to it. Carriers are searching for the diamond in the rough that is going to bring them long-term, high ARPU accounts.

Ultimately, IT and communications are moving to a service model. Agents presently have the leg up there. The question is whether they will manage to keep it.

Let me know what you think about this and our story on VARs as "super partners." Contact me at khenderson@vpico.com or on Twitter @khenderson.