Building A Pipeline For Solutions

XO, a Reston, Va.-based provider of telecommunications services, is developing an agent model that will enable it to expand both its sales force and customer base. The targeted recruits for this agent model are systems integrators looking to deliver complete LAN and WAN solutions to customers.

"A typical XO agent will be able to go in and not only set up the desktop environments and LAN, but also set up secure connections for remote offices," said Alan Bavosa, director of product management for VPN and secured access services at XO.

"By making our service part of their solution, they can provide their customers with one focal point for all of their networking needs," he said.

XO is still ramping up its agent program and training candidates, as the company only recently began offering managed VPN services as part of its product line, said Bavosa.

"The agents that are currently selling our product are doing so as brokers who are bringing XO together with the end user," he said. "When we finally roll out the service, it will be to a small number of technically savvy, security-centric resellers."

For solution providers, the lure to become an agent for a VPN service provider is based on the desire to increase profitability while strengthening relationships with customers.

"We want to be the main focus for our customers when it comes to their telecommunications needs," said Ed Jerome, telecommunications specialist at CT Networks, a Northport, N.Y.-based installation and maintenance company with expertise in telephony, PBXes and voice messaging. CT Networks already

is in the process of becoming an agent for another VPN service provider.

"It's a win-win situation for both the vendor and us," Jerome said. "The vendor increases its customer base without expanding its sales force, and CT Networks will reap additional profits from already-established customer relationships by extending the service it provides to them."

Jerome did acknowledge, however, that the agent relationship will be successful only if CT Networks' staff is diligent in its efforts.

"There will be more responsibility on our part, and it will require greater staff coverage to ensure that the VPN service is seamless and fluid for our customers," he said.

Backing up XO's decision to roll out the agent model is market-research data showing a maturing VPN market.

"According to our surveys, half of the companies that we've contacted in North America are currently using or testing IP-VPN technology," said Steve Harris, senior research analyst at IDC.

Harris added that a similar business model is being used by major telecommunications carriers such as AT&T, which currently has hundreds of solution providers selling its VPN services.

"This is a viable and established business model that's being adopted by other companies offering the same services as XO Communications," Harris said.