Ring Leaders: The Convergence Of VARs, Carriers And The Telco Channel


Service Providers Seeking VARs

Time Warner Cable, New York, is another cable company that’s seen a dramatic uptick in VARs looking to sell carrier services.

“There’s always been some interest, but now we’re seeing much more interest,” said Greg Iuzzolino, director of channel sales, Time Warner Cable, Business Class, which launched its channel program three years ago and whose channel community is now about 25 percent VARs.

“Traditionally, they would sell their equipment and move on to the next customer. But there’s a lot more excitement and a better understanding of how they can drive business to be much more sticky with their customer.”

Another provider, Charter Business, launched its program in 2010, and the motivation was simple, said David Neely, director of channel sales and national accounts. There are some 5,000 telecom agents available as potential channel partners for Charter, but there are more than 150,000 potential VARs, he estimated. That doesn’t mean Charter is looking to add thousands of VARs, he said, but it does mean the potential partner base for Charter is vast.

“The VARs have reached out to me and exposed us to the opportunity because they’re interested in broadening their product base,” Neely said. “That means anything from managed services to cloud. The data pipe is a key component there.”

Charter’s compensation is primarily residual- based, though Charter does spif its VARs and offer promotions to augment those residuals. It handles VAR compensation the same way it does agent compensation.

If Charter is an example of a cable company newer to engagement with traditional VARs and integrators, others, such as Cablevision, are practiced hands. Cablevision, Bethpage, N.Y., began formally embracing channel partners with a referral program in 2007 and launched an official agent program later that year.

It compensates its VARs with an up-front bounty plus a residual and, like many of its peers, doesn’t delineate “agent” vs. “VAR,” said Joseph Magliulo, director of strategic sales and alternate sales channels for the company.

The pickup among VARs selling Cablevision services has been significant in recent years, he said, and it makes sense—the VAR, more than the carrier agent, is often the one closest to the business customer Cablevision is trying to reach.

“I think that a VAR has such a tight relationship with their customer and there’s so much at stake they want to make sure they can be the single source solution,” Magliulo said. “And they want to make sure that it’s a reputable company. [Cablevision] will be here tomorrow vs. how many CLECs are no longer here.”

Magliulo acknowledged that it takes some VARs a while to get used to the compensation -- that is, getting a check several months down the line. But Cablevision is seeking those partners who want to strategically ally with the cable company to please customers -- not those just looking for an extra buck, he said.

“The kind of guy I want is the one most concerned about his customer,” he said. “He wants to make sure the customer is in the right hands. They don’t want to be the ones who get the call, then have to call the carrier agent, who then calls the carrier. In our program, they are the customers’ advocate.”

NEXT: More Of The Sale