Top telecom agents and VARs are gathering at the WTG 2014 Tee & Sea customer appreciation event this week in Malibu, California. (Click here to see images from last year’s Tee & Sea.)
On the eve of the event, Channel Partners caught up with WTG CEO Vince Bradley, who founded WTG back in 1996 when he was just 26 years old — “a kid,” as he recalled.
Now one of the most successful telecom master agents in the Untied States, Bradley occupies a unique position at the nexus of the information technology and telecommunications industries. As a master agent, he provides agents with technologies and services much the way distributors do in the information technology market. But with those worlds quickly coming together, he has an opportunity to provide more VARs and systems integrators with cloud innovations in a much richer way.
In this wide-ranging one-on-one interview, the former “kid” explains why WTG remains, as they say in nearby Hollywood, “in the picture.” It does so by offering one of the most diverse portfolios in the business, going deep into certain vertical markets such as the energy field, and expanding internationally. Here, Bradley explains WTG’s history and the steps it took that led it to where it is today.
Channel Partners: You stared back in 1996. What opportunity did you see at the time and what is the big opportunity for your company today?
Vince Bradley: I worked for three years before we started the company. I saw a lot of opportunity in telecom. We started the company just after the Telecom Act of 1996. What a great time it was to start a business. We saw other agents focusing on long distance. Some were doing some data services, but most were not. As I saw it, I could focus on long distance, or long distance and local services. With that spirit, I decided to get into the CLEC space. So we did deals with TCG, ICG and NextLink. What was great about that was we could help agents sell dedicated services. That’s how we started. Then the nuclear winter of the telecom and dot-com bust happened. After, we leaned more toward private networks, which led us to partner with companies such as AboveNet. That was a huge push. [Eventually] we became the first master to build a diverse portfolio. I remember one of my competitors, a big master agent who was into cable and wireless, asking me “why are you doing business with all these companies? Why not focus on one or two and build your revenue?? I thought about, but stayed the course. By diversifying, we were able to weather some storms that really impacted others.
CP: And more recently?
VB: In the past couple of years, we have been focused on cloud technologies and services. We even developed “Cloudology,” which is our trademarked, proprietary study of all things cloud. It’s all about learning.
CP: You started the company at a very opportune time and have shape-shifted and made course corrections along the way. Do you think the industry is at a similar inflection point that it was back in 1996 when you started? Is cloud that kind of a revolution?
VB: There are a lot of similarities to that time frame and now. A lot of people think cloud is just a marketing buzzword. They think that it’s not something that we are effectively selling or, conversely, that it was already there and thus not new. I see it totally differently. I see sales engineering coming out of this, and a lot of other things. That said, there is a different vibe. It’s more structured and buttoned up than the old days. Back then, the industry itself was seeking definition, not just one key technology.
CP: What are your customers, the agents and VARs, gravitating toward?
VB: Well, let me answer it by saying how we are positioning ourselves, which resonates with them. We are transitioning into a “connectivity services broker.” I like that term because it touches on what we are doing — connectivity. Cloud can be a little too vague in some instances, and too specific in others. But everything we do is connectivity. Everyone from agents to VARs get that, whereas “telecom master agent” can be a little confusing. I’ve had several VARs tell me, “Oh, so you’re like the Ingram Micro or Tech Data of the cloud services world.” That resonated with me. So “connectivity services distributor” or “broker” is something everyone gets. We’re keeping in the master-agent space so the agents feel comfortable, but we are also going after the VAR community in a new way.
CP: How has the VAR community embraced WTG?
VB: Well, at first they would ask me “what are you doing here?” when we would show up to IT events. We focused on helping VARs sell telecom, of course, but also on helping them improve their sales discipline so they would not give so much away. My favorite thing I was told once took place a couple years ago at an event in Denver. A VAR said to me, “When we used to get the call to fix something, we couldn’t fix a [telecom] problem. And it was very frustrating. But with you guys, we’ve not only been able to address the issues and fix problems, we also get paid for doing it now.” Now, of course, we have tons of VAR partners.
CP: You mentioned that you do for the services community what Ingram, Tech Data and Synnex are doing for the product community. Do you see those organizations coming into your world as aggressively as you are going into the cloud space, and what do you have that they don’t?
VB: Certainly, the deals between Time Warner Cable and Ingram, or Comcast and Synnex, coupled by AT&T’s move to no longer compensate the channel on POTS lines or TDM services, tell me that they are going to compete with us. Maybe not over night. But definitely as they build their practices organically or through acquisition. That said, we have been approached over the years [by distributors.] I think the way they look at the market is that most of the master agents are less than $100 million in annual revenue, so why not acquire someone in that space? As per your other question, “what do we have that they don’t?” Twenty years worth of experience, the culture that understands this market, and the personnel who know the players. They could develop this. But it’s not easy and it takes a lot of time.
CP: How will your company evolve over the next few years?
VB: We have sales engineers now. That’s something that a lot of master agents didn’t have just a few years ago. We’re starting to see it more. We’re building a practice around sales and engineering. That’s one area where we will continue to evolve as cloud proliferates. Another is our energy division, which is getting a lot of traction. When it comes to VARs, some are very interested in that space. For us, we are doing baby steps. We want to get the agents selling energy and the VARs selling telecom. The biggest goal is to get convergence traction with VARs. We will also continue to build our international business.
CP: You’ve head the old cliché that “VARs can’t sell and agents can’t integrate.” Is there any truth to that?
VB: There’s some merit to it. But the reality is the market is more of a spectrum than a binary either/or situation. When it comes to VARs themselves, say the $5 million to $100 million companies that we target, they, generally speaking, do have some challenges when it comes to the sales process because they focus on equipment and outcomes. Now, there are plenty of companies like CDW and others who have nailed the sales process, including services. Some of our VAR partners have been very successful selling services. Why? Because they added them a long time ago and developed some experience.
CP: Where do you think we are in terms of cloud-market maturity? Have we crossed the chasm or are we still in the early stages?
VB: I think we are just getting started. If you look at it, a lot of it has just been hosted voice and data center stuff and wireless apps. Those three areas have been the most popular areas of cloud. But now you are seeing real compute services, which is a new stage. Things are shipping over to the desktop as opposed to only being in the data center or on a mobile device. You’re seeing companies like RapidScale and a bunch of others really focusing on compute. I think this is a market that you will see really take off. I think cloud is really just getting started.
CP: What are some of the best practices around recurring revenue that you have seen developed by VARs and agents?
VB: We, for one, have a four-level program of compensation for VARs. We have a referral program where they can throw business over the fence to a trusted agent through us. All they have to do is put information into our CRM system. This avoids the common problems you see with teaming in which one partner always feels that the other is getting more business. In our referral program, VARs can get as much as 40 percent of the commission. We have a program called “VAR Light,” which is basically when we team up VARs and agents so they can go to market together. The agent does most of the heavy lifting, but the VAR gets 60 percent of the commission. “VAR Connect” is the opposite. In this instance, a VAR is taking the lead and doing most of the heavy lifting and the agent is sitting back and perhaps helping with whatever comes up. Then, of course, we have “VAR Premium,” where a VAR is doing everything for the customer. With VAR Connect, you get 80 percent of the commission and with VAR Premium you get 100 percent.
CP: Are VARs intimidated by telco agents or vice versa when it comes to the cloud?
VB: I think the agents are extremely intimidated by the VARs. Think about it from their point of view: The guy that used to send them a lead is now competing with them. The way around this, of course, is through partnering or adding value. I think the agents that are not as dynamic are struggling with how to add value to VARs so that the VARs don’t think about competing with them by adding services and hiring new telecom people. From the VARs’ perspective, things are very different. VARs feel intimidated sometimes because they don’t know telecom. They are afraid that telecom services will get in the way of selling their boxes or software. They don’t want to sacrifice that because it’s too risky for their business. For VARs, it’s more of an uncomfortable-ness with the agent community, whereas with the agents it’s more concern.
CP: You mentioned that you have been approached by other companies to sell, so let me ask you: If you weren’t doing this, what would you be doing?
VB: What excites me is the whole visionary-entrepreneur thing, especially in the new areas we are focused on: cloud, international and energy. These new markets keep me motivated. I can’t just fling new circuits; I can’t. That’s why were are trying to be pioneers in some of these new markets. As far as what I would be doing if not this? It’s something that I don’t think about very often. I just started surfing again … so maybe surfing or playing music in a band. I like to joke with people that if I’m out in the morning, it’s because I am at a “board meeting.” As far as other industries, I cannot think of being in a better place. We are at the forefront of some great things. Even though we are almost 20 years old, I feel like we are just getting started. I used to be called “the kid” when we started. This was before Telarus and some of the other master agents came along. And though I’m older now, I’m as excited as I was then.