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Comcast Business announced Tuesday that SYNNEX Corp. will become the first IT distributor to serve as a master agent for the cableco, delivering Ethernet, Internet, voice, cloud and TV solutions through its network of 30,000 VARs.
Under the agreement, Comcast will become a strategic supplier of fixed-line services for SYNNEXs mobility, communications and networking services distribution practice, MOBILITYSolv, which was announced in April.
SYNNEX is not the first IT distributor to add wireline services. Ingram Micro announced agreements with CenturyLink and Time Warner Cable earlier this year. TechData signed with master agency MicroCorp last year and Scansource forged an agreement with Intelisys in June.
What may be different about this deal is the level of investment SYNNEX has made.
“They are the first distributor that we’ve worked with to build a master agency with dedicated people to support the channel to sell network services,” said Craig Schlagbaum, vice president of indirect sales for Comcast Business, in an interview with Channel Partners.
“What we are doing with our VARs with the help of Comcast is creating a services-led model versus the traditional hardware-led model, which you have seen other distributors do,” said Adnon Dow, vice president of the global mobility solutions business unit at SYNNEX. “They may be selling this stuff, but they are throwing it over the wall, whereas we are building an organization around it.”
Specifically, SYNNEX has six people who are dedicated to the Comcast relationship, 21 people selling it in the field, and 300 inside sales reps that are talking with VARs about the opportunity, explained Dow. Among the six dedicated staff, there are a number of new recruits from the telecom and cable industries. The group is headed up by a practice lead, sales lead and business development lead, but their names were not disclosed at press time.
The companies said the resources are the result of a joint investment, but they did not disclose their respective stakes.
“To my knowledge, nothing like this exists in the distribution world today where you have dedicated resources that are knowledgeable about the space and are focused 100 percent of the time on selling it along with systems designed to support the channel and pay them properly,” Schlagbaum said. That, along with delivering bundled solutions, is unique, he said.
MOBILITYSolv allows SYNNEX to create solution bundles” that combine network connectivity services from Comcast Business with other SYNNEX offerings, such as switches and routers, servers, security products, storage equipment and mobility products, so that VARs can build end-to-end mobility and cloud communications solutions for their customers.
“What attracted us to SYNNEX was their nimbleness in being able to execute against this vision and to be able to put things together rapidly,” Schlagbaum added.
The deal came together very quickly with talks beginning in February and a program rolled out this summer in advance of Tuesday’s official announcement, with a few targeted cities and road shows to introduce it to the VARs.
“We’ve already had quite a few that have signed contracts and that have been onboarded,” Dow said. “Now we are in phase two of enabling, training and getting those guys productive. In parallel we are working on phase three, which is expanding recruitment.” Service is now available throughout the Comcast footprint, which covers 39 states and the District of Columbia.
One of the early converts is Allen Brooks, executive vice president at ServIT, an MSP based in Kennesaw, Ga. ServIT is a longtime SYNNEX partner that sells all-inclusive technology solutions, including connectivity. The company has recommended Comcast network services in the past, but has not gotten paid for doing so. He said the SYNNEX deal gives him an opportunity to make money on network sales and it brings him closer to the provider instead of calling an 800 number, which enables him to serve his customers better.
Working through SYNNEX, ServIT already has developed a pre-qualified target customer list, and Brooks claims that there are a couple of sales ready to close. He also said he has appreciated the joint selling approach offered by SYNNEX and Comcast.
Comcast is not just another vendor on the SYNNEX line card, but part of a larger strategy acknowledging that the traditional hardware channel needs to transition to a services-based business.
“As we see more services go into the cloud, we’ll start seeing more and more VARs shuttering their doors because there’s less and less hardware to sell,” Dow said.
Dow is passionate about telling VARs about the upside potential of selling Comcast’s services, noting that a basic coax circuit can earn them $200-$400 upfront as well as an ongoing monthly residual for the term of the contract. This compares to $50-$200 margin on the sale of a switch, router or server.
SYNNEX is offering three compensation options: Referral partners are paid an upfront bounty based on a multiple of the monthly recurring charge. VARs that want to sell the service as subagents get a larger upfront as well as a percentage monthly residual, which increases with the term length of -3 years. Finally, VARs that want to white-label and incorporate connectivity into a managed service will get a richer upfront and monthly residual.
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