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Michael LeBlanc, president and CEO of LeBlanc Communications, a Redding, Conn.-based solution provider specializing in voice and carrier services, was ahead of the curve in terms of the IT-telecom convergence and transitioning his business to a recurring revenue model.
In fact, LeBlanc said, his company, once exclusively focused on IT, threw in the towel on one-off hardware sales completely after the emergence of IP-based PBX and the dot-com market crash back in the early 2000s.
"We realized we couldn't just keep selling hardware. We had to figure out a way to make money on residuals," LeBlanc told CRN, noting that his hardware sales "went off a cliff" after the crash. "I didn't want to have to go out and sell something every month just to feed my family."
LeBlanc said he got his feet wet with the residual model by attaching five-year warranties to every phone system his company sold. Today, LeBlanc Communications sells a full suite of carrier services, ranging from hosted PBX to structured cabling to phone and Internet provisioning.
LeBlanc said his carrier business grows "steadily" every year and right now is up roughly 20 percent year-over-year. He also said his business, in general, seems to maintain a stronger growth curve than those of the more traditional IT solution providers he works with as referral partners. This, he said, isn't only because of the more consistent revenue streams introduced through carrier services sales, but because he can "do more with less" compared with those partners.
"On a strictly dollar basis, as a business owner, I am making more money than a lot of the guys I know because they have to have more expensive engineers on staff, and more of them," LeBlanc said.
LeBlanc Communications works with roughly a dozen solution provider partners today as referral partners. LeBlanc described those partnerships as "symbiotic." Solution providers refer carrier-focused sales to LeBlanc and his team -- for a slice of the residuals -- while LeBlanc does the same for all IT-related inquiries.
"VARs out there can take advantage of a bigger piece of their customers' revenue without the hassle by working with somebody like us," he said.
Tim Kennedy, vice president of carrier services at Carousel Industries, an Exeter, R.I.-based solution provider, told CRN Carousel's carrier services business in the second quarter was up 42 percent over the first. Kennedy, who, like Ronco's Brown is tasked with building and leading a dedicated carrier services team, said Carousel's investments in the telecom space so far are definitely paying off.
"[Carousel] recognized that they were leaving a lot of money on the table, and they realized they were doing an injustice to their customers because they weren't looking at part of their business," Kennedy said as part of a VAR panel at the Intelisys Channel Connect event Thursday. "Now, it has positioned us more as a trusted adviser and, certainly, the recurring revenue stream is extremely attractive."