Intelisys' Cloud Computing Offensive Is Picking Up Steam7:06 PM EST Wed. May. 01, 2013
The recurring revenue cloud computing offensive from Intelisys is paying off in big sales gains for the master agency and its partners.
Solution providers say Intelisys has delivered the sales training and technical muscle that have allowed them to start quickly booking significant recurring revenue cloud computing sales. They say none of the other master agents have put as much muscle into helping them make the leap into the fast growing cloud computing services market.
What's more, partners credit Intelisys with bridging the gap between telecom agents and VARs and even sparking partnerships between the historically distinct channels with what at one time seemed impenetrable cultural and business model differences.
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"Other master agents are talking about the cloud, but none of them has made a significant investment like Intelisys," said Mike Oliver, president of Solus Network Solutions, an Auburn, Calif.-based carrier and technology solution provider that is driving new cloud services sales with Intelisys. "I see huge growth ahead in my business because of my partnership with Intelisys. They are educating us on cloud and bringing VARs and agents that were at odds with one another together."
Intelisys, headquarted in Petaluma, Calif., for its part, says that in just the first four months of this year it has already signed up 38 new VARs for its cloud computing business that have already booked $1.4 million in annualized recurring revenue.
Another sign of Intelisys' increasing cloud computing momentum: SP 500 $400 million powerhouse Carousel Industries' selection of Intelisys as its primary master agent for cloud and carrier services. The deal paves the way for Carousel to tap into 60 recurring revenue cloud and telecom providers.
Carousel, in fact, already has already closed more than $1 million in annual recurring revenue under agreement since the Intelisys deal closed last November.
"The deal has taken hold pretty quickly," said Tim Kennedy, vice president of carrier services for Exeter, R.I.-headquartered Carousel. "We had direct relationships with a number of carriers, but having access to all of Intelisys' carrier partnerships brought us an additional 30-40 carriers, opening up more opportunities that weren't available to us before. Now we can talk to our customers not just about being their primary carrier but designing [cloud-based] backup networks for them. We have a much broader portfolio of options now to bring to our customers now."
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Carousel is adding sales reps as it moves to aggressively offer the new services to its 6,000-strong large account base, said Carousel's Kennedy.
"We want to be a single source provider for our customers for voice, video and now carrier services as well," he said. "We want to be the one throat to choke. Customers love that. Some of the bigger companies our customers deal with have not made it easy for them. We see a tremendous opportunity that we have barely scratched the surface on."
The voice data convergence represents a "huge transformation" in the IT landscape that is putting intense pressure on customers managing their own infrastructure, said Kennedy, who joined Carousel in March from Comcast where he was director of enterprise services for the New England region. "Things are changing so fast that companies are looking to outsource [infrastructure] to companies they trust like Carousel," he said.
Cloud activity for IPLogic, a Latham, N.Y.-based solution provider serving the upstate New York region, is up "significantly" since the Cisco Gold partner started working with Intelisys on driving cloud service sales some eight months ago, said Jessica Mayo-Pike, business development leader, Advanced Solutions for IPLogic.
IPLogic has relied heavily on Intelisys to navigate the treacherous cloud marketplace, helping to select the right cloud computing service partners for specific vertical, SMB and enterprise customer engagements, said Mayo-Pike.
"No other master agency is putting the type of resources into a cloud program that Intelisys is," she said. "Manufacturers, solution providers, telecom master agents and VARs are all trying to get a piece of the cloud pie right now. It's a very complex and confusing time especially for an end user. Intelisys is helping us all understand how to best navigate through the chaos. They have given us a ton of guidance."
Mayo-Pike sees Intelisys extending its impressive market clout in the telecom business into the cloud marketplace. That's good news, she said, for solution providers like IPLogic looking to get the best sales and technical bang for the buck in the cloud market. "Intelisys is putting together the best of the best in the cloud and takes the leg work out of demystifying the various cloud providers knocking on our door to get their product on our line card," she said.
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Solus Network Solutions' Oliver says he expects that Intelisys' cloud muscle will help him move from a 100 percent focus on the carrier business to driving as much as 20 percent of his sales from cloud in the next two years. "It's a natural progression for us now with Intelisys," he said.
Oliver says he expects a company that is spending $10,000 a month on carrier services with Solus could add another $30,000 to $40,000 a month in cloud services. "You always have to look at where the business is going," he said. "You can't rest on your laurels thinking what you are doing today you can do tomorrow."
That eye toward driving next-generation cloud services growth is what has propelled Intelisys to move aggressively into the cloud marketplace.
Andrew Pryfogle, senior vice president, cloud services and complex bids for Intelisys, who is leading the master agency's cloud computing business, said he sees the traction that the company is getting as a "tipping point" in cloud computing-carrier services convergence.
"The way IT spend is happening is changing," he said. "Everything is shifting to the as-a-service model, and VARs realize they have to move quickly to develop a recurring revenue practice. Many VARs see an agency path as a faster, cheaper and lower-risk path to recurring revenue."
One sign of the times: more than 330 VARs attended a recent Intelisys Cloud Live! event, nearly twice as many as Intelisys expected. "We were blown away," Pryfogle said. "VARs showed up en masse and hung out for three hours. They are thirsty for cloud services education and how to make the pivot to recurring revenue."
Many VARs are starting first with carrier services to begin quickly adding recurring revenue to their mix, he said. "Customers are mostly dealing with carriers themselves and would prefer to buy those services from a trusted VAR advisor," said Pryfogle. "We are all about enabling VARs to build these recurring revenue practices quickly. Forward thinking VARs understand that recurring revenue is the only real answer to building a sustainable business in the new economy."
PUBLISHED MAY 1, 2013