Technology solutions provider Digital Planet Communications Inc. is seeking channel partners – telecom agents, VARs and office-products companies – that need help making the pivot to full-service solutions provider or executing an exit plan.
Digital Planet is one of the few channel partners that has cracked the code in delivering both IT and telecom solutions to business customers. CEO Shawn Schmidt said he wants to help other companies to make the transition, too, by becoming what he calls three-dimensional – offering IT, telecom hardware and carrier services.
Schmidt and his team will help companies initially by filling in the gaps, e.g. offering the IT and telecom hardware that telecom sales agents typically do not and vice versa for VARs.
The initial goal is to shore up the existing customer base before it’s too late, Schmidt said, noting that many partners are in a race to zero as they watch helplessly as their customers churn. The ultimate goal, of course, is to help the company to develop its own capabilities and grow its base in number and in average revenue per customer.
“Bundling is survival,” Schmidt said. “You cannot sell just network or you will not be here in three to five years.” The same is true of VARs selling hardware. Both are seeing intense competition from cloud-based communications that are packaged with network and phones, leaving both partners cut out of the deal.
Schmidt said that many partners are in denial that their businesses are in decline.
“A lot of folks don’t want to admit they are not relevant,” he said. “The don’t realize it’s a missed opportunity. They are not in front of it.”
But there are others that want to transition but don’t have the technical or financial ability to make it happen. Those are the ones that Digital Planet may be able to help.
Over time, if they can’t make the transition 100 percent, Digital Planet can continue to be third-party support or buy the customer base. Schmidt explained that Digital Planet will pay partners a lump sum or set up an earn-out plan, e.g., a percentage of the base and the business growth over three to five years.
One advantage to the buyout is that rebranding as Digital Planet can help with marketing an expanded service portfolio.
“If you have been doing business with a customer and offering one thing, and now you are selling more, it can be hard to change their perceptions,” Schmidt said.
So, far Schmidt said Digital Planet is working with five partners – two are transitioning and three are exiting – counting Compass Communications, which the company acquired in February. In 2015, Schmidt and his team are planning to take on three to five more.