Why Carriers Are Targeting IT VARs

By Dale Tucker

The topic of recruiting VARs, solutions providers and IT consultants into network services channels is certainly capturing the interest of carriers, master agents and publications alike. The synergies are obvious, since cloud service delivery and managed services finally are cementing the convergence of IT and telecom services. VARs have shied away from selling carrier services for a number of reasons – among the most common are comfort with their traditional sales models in the hardware and software sectors, and suspicion of telecom carriers and their channel philosophies. On the flip side, carrier channel programs have been slow to embrace the power of these IT channels because of similar patterns of inertia. Telecom channels and IT influencers have mainly stared across a void at one another.

As the IT community finally realizes that expertise in carrier services is a critical component of an overall strategy, network services carriers and agents also are beginning to comprehend the vast opportunities that remain untapped in this space. So, they must understand the power of IT channels in the telecom services space. Perhaps many of the following statistics are familiar, but they deserve further attention.

• Gartner indicates that worldwide IT spending in 2011 exceeded $3.6 trillion – computing hardware, enterprise software, IT services, telecom equipment and telecom services made up $1.7 trillion of that total.
• Worldwide IT spending is projected to increase 3.7 percent overall in 2012 and reach $4.4 trillion by 2015.
• In the United States, Business Monitor International estimates that business IT spending topped $534 billion in 2011, and will reach $659 billion by 2015.
• Telecom services spending by businesses in the United States is just under $150 billion; approximately $85 billion of that is wireline.
• Looking again to IT spending, Accenture estimates that 67 percent of all business technology sales take place through indirect channels.

Simply stated, these numbers indicate that channel-influenced IT spending, in general, dwarfs the entire market for business telecom services. Then consider that only a small fraction of the telecom business spending is associated with indirect channels.

There are between 100,000 and 200,000 VARs/IT consultants/systems integrators influencing hundreds of billions of dollars of IT spending in the United States. Thus, it should be clear to all of us in the carrier services channel that the opportunity to leverage the influence of the IT channel in the sale of complimentary carrier services cannot be overestimated.

One large master agent related this moment in time to the concepts discussed in "Blue Ocean Strategy," the book about strategic business development. First, there’s the red ocean, with waters bloodied by fierce competition in defined boundaries with existing demand. Carrier channels and agents know the concept well, familiar as they are with the constant efforts to pull in share from the existing segment of telecom spend influenced by the channel. And there is similar competition among carriers and masters for the mindshare of a finite group of traditional telecom agents.

Then there is the blue ocean, represented by the vast opportunities to develop untapped markets and create demand in ways that render the telecom channel's current competitive landscape irrelevant. This is the promise of the IT channel's reach. The smart money for future profits is most certainly on those of us who will successfully cultivate the IT channel in the sale of carrier services.

Dale Tucker is business development director for the CenturyLink Channel Alliance (formerly the Qwest Business Partner Program), where he is responsible for new business development, expansion of partner models and agent contract negotiation/management/governance. He has worked for Qwest/CenturyLink for 12 years and is a member of the 2011-12 Channel Partners Advisory Board.