As the IT-telecom convergence continues to upend the traditional solution provider business model, WTG, a connectivity services distributor and one of the top master agents in the U.S., said it's found the secret sauce to help VARs embrace carrier and cloud services sales.
WTG CEO Vince Bradley told CRN in a recent interview that its VAR Connectivity Program, which teams IT solution providers with WTG agents to help solution providers learn the telecom ropes, eases VARs into carrier and cloud services sales in a way no other master agent program can do.
"[Solution providers] want to scale over time and learn as they go," Bradley told CRN. "That's what this program is designed to do."
Bradley said WTG's VAR Connectivity Program has helped the Malibu, Calif.-based master agent onboard nearly 1,200 VARs since the program's formal launch in 2011. Today, Bradley said roughly 35 percent of WTG's overall partner base is VARs.
Other master agents, such as Petaluma, Calif.-based Intelisys, have noticed a similar migration of traditional IT VARs into their historically agent-focused partner programs. It's a change that not only speaks to the continued convergence between the IT solution provider and telecom agent channels, but the need for both of those groups to ramp up their recurring revenue streams and better address the cloud- and services-based IT model.
Bradley, for his part, said he's noticed a greater sense of urgency among IT solution providers to break into the carrier and cloud services markets. More than 50 percent of the net new partners WTG signed on this year were VARs.
"I think by 2015, if a VAR doesn't have some connectivity source, then they are going to be losing business," Bradley said. "No question."
WTG's VAR Connectivity Program was built around the concept of teaming traditional IT VARs with experienced telecom agents. It consists of four different partner levels, the first of which is a referral partner. At this level, Bradley said, there isn't really a teaming element. Solution providers, instead, simply refer telecom deals to WTG, if they choose not to take those deals themselves.
The second level is called VARLite. At this stage, solution providers are teamed with a WTG agent, but have what Bradley described as "minimal involvement" with deals. Solution providers at this level essentially take a back seat and observe their agent partner.
The third level, VARConnect, reverses the roles. The solution provider takes the leading role -- i.e., handles most of the billing, recommends customer solutions, and oversees the implementation of those solutions -- while the agent partner observes and provides guidance when needed.
The final level, VARPremier, is when solution providers takes full ownership of the WTG customer accounts and, as Bradley put it, do "everything on their own."
Solution provider commissions at each level are 6 percent as a referral partner, 9 percent as VARLite, 12 percent as VARConnect, and 15 percent as VARPremier. Bradley said these rates, however, based on the specific carrier being sold.
NEXT: WTG Partners Speak Out
In addition to the run-before-you-walk structure of the VAR Connectivity Program, Bradley attributed the uptick in WTG VAR partners to WTG's robust training offerings. He cited Cloudology, WTG's cloud division and formal cloud training program, as an example that trains partners on a range of cloud-based products, including Microsoft Office 365.
Aaron Tuomala, president of Method Technologies, a Huntington Beach, Calif.-based solution provider and WTG partner, said he signed on with WTG about three years ago. Now, as a VARPremier partner, he said Method Technologies' carrier and cloud services business gives the company a leg up over the competition.
"I think it really sets us apart. We don't just go in there and focus on IT. We go in there and look at everything as a whole," Tuomala told CRN. "You have to look at how one thing affects another, and a part of that conversation, always, is how [customers] are structured with their phone and Internet."
Tuomala said his carrier services business isn't quite as large as the other core parts of Method's business, such as managed services or hardware and software sales. Still, he said, Method pulls in roughly $4,000 a month in recurring revenue from carrier services sales, which is double what Method made in recurring revenue last year.
"It's really the icing on the cake," Tuomala said.
Darrin Akita, executive officer at Triton Communications, a Walnut, Calif.-based solution provider and WTG partner, said Triton decided to start selling carrier services simply because customers were asking for them. He said Triton said that if they weren't providing them, its customers would just be getting the services from a competitor.
"We already had a relationship with customers and they were coming to us asking questions about carrier products," Akita said. "They were asking, 'Is this a legit company to go with?' or 'Would you guys trust this particular carrier?' We figured if we are doing all that and not getting paid for it … why don't we just take it?"
Akita said Triton's carrier services business through WTG grew between 25 percent and 30 percent year-over-year in 2013.
"We're everything on one call now, so it makes our customer base a little bit more strong," Akita said.
PUBLISHED DEC. 10, 2013