Can the Master Agent Model Make It in Europe?


Business Model

RingCentral has become the latest vendor to bring the U.S. master agent model to Europe.

The unified communications as a service (UCaaS) provider on Tuesday announced a master agent partnership with Telarus in the U.K.

Zane Long is senior vice president of global partner sales at RingCentral. He says master agents such as Telarus are instrumental in delivering its cloud communications solutions to customers. He adds that the partnership will “strengthen and accelerate” RingCentral’s channel presence in the U.K.

Last month, Westcon, Avant and ScanSource were among the first to sign up as European master agents for Avaya’s new UCaaS Cloud Office offering in partnership with RingCentral. First announced in February, the vendor hopes they will act as an entry points for volume partners.

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At the same time, distributor Nuvias became a master agent for Zoom. Elsewhere, North America’s largest privately held master agent, TBI, recently expanded into Europe.

But while the master agent model has flourished in the U.S., the model is still new to many European partners. It was established in North America as telcos pushed more of their partners to cloud, says Canalys senior analyst Robin Ody. Carriers wanted more investment from the second tier to accomplish the necessary changes in their service delivery capabilities.

“That move costs money, so they differentiated distribution from master agents to demonstrate this value differential,” said Ody.

Canalys' Robin Ody

Canalys’ Robin Ody

“The cloud solutions model for telcos in the U.S. has been the main driver,” he added. “And U.S. competition dynamics mean the market is consolidated to a slightly larger extent than in EMEA.”

Proving Value

Lisa Del Real, VP, global partner programs at RingCentral, says the firm has been working with master agents for many years in the U.K. However, she concedes the model is less established in the region.

RingCentral's Lisa Del Real

RingCentral’s Lisa Del Real

“In the U.S., a master agent model just makes sense,” she said. “It provides a quick go-to-market option, which serves to offer customers best-of-breed solutions — especially when it comes to cloud-based communications.

“In the U.K., master agents are still proving their value to many partners that have already been operating in the channel for years. While it doesn’t make sense for agents to operate exactly like they do in the U.S., we do feel this model is a great fit for the U.K. channel. It just needs an approach that fits the context.”

Del Real says RingCentral’s approach to partnering “is very different from our competition.”

“We’re all about helping our partner community drive demand, which includes full support in closing the deal from a RingCentral expert at no extra cost. For master agents, this means no heavy financial investments to increase innovation in the back-office functionality,” she said. “Instead, they can focus on working with customers to understand and address business pain points with cloud-based communications solutions.

“For customers, the master agent model not only means the speed of deployment but also the ability to be supported directly by us,” she said.

Del Real maintains that this way, partners can enjoy “lucrative commissions by leveraging RingCentral’s sales team expertise to help them close business quickly with zero penalties.”

Convincing the Channel

Nevertheless, U.K. channel partners remain unsure of what the new round of master agent agreements means for them. Much depends on the vendor’s requirements and the way they view the role.

“The ultimate questions are where you create value and how you deliver it,” said Ody.

He contends that, actually, the amount of investment required is high.

“Microsoft can afford to push its channel hard to make these kinds of changes. But for other vendors, and especially carriers in EMEA, it will be harder to convince partners and distributors to take the financial risk. But there is a dwindling amount of margin in some legacy areas, and customers are looking for new ways to unlock the value of their IT investments.

“If the master agent model can enable this value creation through its focus on training, channel management and new services, then so be it. But it is also down to the vendors to make sure they have the products that allow partners to create the kinds of solutions and services that customers will value.”

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