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


Committing To The Cloud

At the end of the day, channel observers agree, the driver for carrier services among VARs is about being able to say, “Yes, we can do that,” and offering what the VAR down the street can’t. According to channel observers, that means having a clearly defined services strategy that addresses the cloud. Telecom agents, too, are going to need to adapt their businesses to better compete against VARs taking more of their business.

“I do think they need to have a broader book of business. Longer term, they will need to bridge out,” MegaPath’s Foster said of carrier agents. “I think near term, what they do is continue to enable those integrators and VARs. If you’re a large master agent and the VARs you’re attracting do $300 million and $1 billion, you’re talking about the future of the distribution channel.”

The great VAR migration into carrier sales is still very much in its infancy, however.

“Everyone, especially in the agent world, looks at the VAR [channel] as the next best thing and in most cases it is,” said XO’s McNamara. “But VARs are used to the P.O. being written, the customer signing it, the product being shipped out, and moving on to the next sale. They’re not used to a T1 order than can take six months to install and another two months to receive commissions.

“If you grow up on the hardware side, it’s harder to understand telecom,” McNamara added. “If you don’t commit to it, you’re not going to be successful. You can’t be half-pregnant.”