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Blue Line’s Converged Communications Buy Spotlights Channel Convergence

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By Allison Francis

Blue Line Technologies Inc just announced its acquisition of the managed services operations division of Converged Communications Technologies, a provider of voice and data center cabling services.

The deal will allow Converge Communications to continue focusing on their core business, while Blue Line takes over the IT support services for existing and future clients of Converge.

This merger brings up an interesting topic. The story of telco agents and IT managed services providers joining forces is a long and convoluted one, and has been the subject of many a debate in recent years. Depending on whom you talk to, the convergence trend is either happening and picking up speed, or is barely even a blip.

So where is the actual needle on this thing?

While some say that there are many instances of agent and MSP collaboration, others insist that agents and MSPs occupy different places in the tech universe. According to Jim Lippie, senior vice president of partner development at Kaseya, telcos have dabbled in managed services over the years, but it hasn’t been a pervasive trend. On the flip side, there’s a tremendous opportunity for MSPs to partner with telco agents so that they can sell their services upstream to midmarket enterprise customers.

Keep up with the latest channel-impacting mergers and acquisitions in our M&A roundup.
Kaseya's Jim Lippie

Kaseya’s Jim Lippie

“Unlike most MSPs, telco agents are great at selling and they have an extensive pool of existing enterprise customer relationships that the MSP can tap into,” said Lippie. “So the marriage between MSPs and telco agents is the best of both worlds — the MSP gets to focus on what it does best, provide top notch IT services, and simultaneously expand its customer base to larger, higher revenue-generating customers, while the telco agent gets new avenues to sell new services to their existing customer base and earn higher commissions.”

This seems like a win-win for both parties, doesn’t it? Considering this, is it safe to say that more MSPs may go down this path as a growth driver for their business?

It’s interesting to highlight the difference between the two groups, and how those differences are causing experts to regard them as being on one end of the spectrum or the other.

SolarWinds' Dave Sobel

SolarWinds’ Dave Sobel

“The fundamental disconnect between the two is that most agents don’t want to really deliver anything to anyone, and most MSPs want to deliver everything to everyone,” said Dave Sobel, senior director of MSP evangelism at SolarWinds, earlier this year. Since these two entities pursue different sales objectives, it might explain why they haven’t converged as one or found ways in which to play nicely together, he adds.

Blue Line president and CEO Jeff Sagraves says that telecom agents want to sell recurring solutions that require very little maintenance. This includes items like phone, internet and email. They sell the service, collect the monthly commissions and do not need to offer a tremendous amount of support. The manpower cost is focused on the sales force. MSPs are much more labor intensive.

According to Sagraves, in the coming years, computing power and internet speeds (5G anyone?) will push the technology stack further away from …

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