Integra Telecom Partners Finally Get Pricing, Quoting Tool

On Nov. 1, competitive service provider Integra Telecom will roll out the MasterStream quoting and commissioning platform to its agent and reseller partners.  

“It’s something they’ve been asking for, for a long time,” Ken Smith, Integra’s vice president of sales, told Channel Partners this week.  

Indeed, it is standard to offer pricing and proposal capabilities to partners, prompting Smith to concede that Integra’s MasterStream deployment comes late.

“It should have been in place years ago,” he said. “It was not.”

There are reasons for the delay. Since about 2008, after the Eschelon Telecom purchase, Oregon-based Integra has fought quarterly losses. The company was not making the most of its fiber assets or introducing as many next-gen services as its peers, and it continued to target smaller customers even as it knew it needed larger ones.

Circumstances began to improve when, in 2011, the Integra board ousted co-founder Dudley Slater in favor of Tom Casey. Yet, not long after that shakeup, Casey left the company. The Integra board then asked fellow member and former Level 3 Communications president Kevin O’Hara to step in. Since that time, Integra has upgraded its services portfolio, customer base and channel program. For example, it has added products including hosted VoIP and wireless backup. It is focusing more than ever on multilocation enterprise customers and said this week that 70 percent of new sales now come from this demographic. Finally, Integra also is beefing up its wholesale footprint and signing resellers who want to white-label services. Thanks to those efforts, among others, Integra’s financial fortunes appear to be bouncing back the privately held company says its revenue, gross profit and unlevered free cash flow all are increasing.

The changes, however, have cost some people their jobs. Earlier this month, Integra enforced about 30 layoffs, according to The Oregonian. And one of the recent casualties was channel chief Ken Worcester.

“We looked to where we needed to go and some of those decisions led to needing different personnel with different perspectives and résumés,” Smith said of Worcester’s departure. “I made the decision to make a change in the leadership.”

Smith is in the midst of interviewing candidates for the indirect channel vice president role; he wants someone who will help centralize Integra’s once-regional sales model as the provider focuses on spread-out organizations. For now, Integra’s channel structure consists of two sales directors, an operations director and, of course, managers throughout the company’s markets.

Meanwhile, partners can look forward to Integra’s second advisory board meeting. The first was held last May in Denver; the next will take place in February. By that time, Integra may have unveiled its eWan, full-mesh, layer 2 VPN, which partners will be able to sell.

“We’re asking partners what they like, what they don’t want, what to continue,” Smith said. Thus far, he added, “we’re seeing positive responses from new products.” To that point, partners contribute about 20 percent of overall sales on any given month, Smith said, and that 20 percent weights toward enterprise wins.

On the whole, Integra is making progress and Brian Washburn, research director of network services for Current Analysis, said he is optimistic.

“I think they’re really headed in the right direction,” he said. “Integra has taken its medicine and stabilized to the point where [O’Hara] is able to fund it and get it in the direction he wants to go.”

Proof of progress under O’Hara came two weeks ago when Searchlight Capital Partners bought Goldman Sachs’ equity stake in Integra. Searchlight and Integra said the partnership is built for the long haul; they did not say how much Searchlight invested, but O’Hara said the companies share common goals and philosophies. For Washburn, the investor shift bodes well for Integra. “Kevin finished the stabilization and is now taking Integra in the direction where’s it’s going to be more up-market.”

The key will be how Integra uses its many fiber assets.

“I think some of those resources weren’t getting the support or investment they needed,” Washburn said. But that’s changing under O’Hara and positioning Integra to “be a bigger fiber player with modern services, and the proper tools to support fiber-based sales.”

Still, the provider has a lot to prove, to itself, and to shareholders and observers.

“We think they peaked four years ago at about $700 million a year; now they’re about $600 million a year,” Washburn said. “All the things they’re doing put them on a sustainable course and, potentially, toward growth. But to get back to the previous high-water mark, I don’t see that they can achieve that any time soon.”

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