Timid About Telecom? VARs On How They Dove In And Became Profitable


Embracing cloud and carrier services can be a chilling prospect for IT solution providers. In addition to having to broaden their technical expertise, it's a leap that requires them to spark up new partnerships and, perhaps most intimidating of all, wrap their arms around a recurring- and services-based business model.

But at the Intelisys Channel Connect event this week in San Francisco one trend seemed especially clear: For those solution providers who have bitten the bullet and taken the telecom leap, the risk is paying off.

"As far as making money, we've been pretty successful," said Rod Brown, vice president of carrier services at Ronco Communications, a Tonawanda, N.Y.-based solution provider. "When we started looking into [carrier services], two-thirds of all our revenue was up front, and one-third was residual. Now, that's moving in the other direction."

 

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Brown, a 27-year industry telecom vet who was tapped by Ronco to build out its carrier business, told CRN that Ronco's carrier services unit has more than doubled in size, in terms of recurring revenue, over the past four years. Ronco, which also partners with Cisco Systems, Avaya and Microsoft, decided to move into the carrier services space in 2008, Brown said, after its executive team made a "commitment" to the residual model.

The company already had a strong focus on unified communications and voice solutions, Brown said, but much of its success in the carrier services space can be attributed to the fact that it has established a dedicated carrier services unit.

"The way we have done it is by having dedicated carrier specialists by region, as opposed to every region having our equipment people selling it," Brown told CRN. "We do a combined approach, where the equipment salesperson and the carrier salesperson work together to sell services."

In addition to growing its recurring revenue base, a dedicated carrier services unit has helped Ronco become more of a one-stop shop for its clients -- providing bundled solutions of network services and hardware, Brown said.

The convergence of the IT and telecom channels was a major theme at the Intelisys Channel Connect conference. Intelisys, a master agent that has predominantly sold through the telecom agent channel, has seen a jump in the number of IT solution providers in its partner base, particularly as end users continue to flock to services- and cloud-based IT models. Intelisys said this week that solution providers account for 57 percent of the new partners it has brought on this year.

Intelisys also said there are roughly 40 solution providers participating in its Channel Alignment program, which pairs traditional IT solution partners with telecom agents to help them learn and warm up to carrier services sales. Intelisys projects that number to reach 70 by the end of the year.

NEXT: More Carrier Services Success Stories