Cogent Communications, a provider of IP networking, Ethernet transport and co-location services, this week introduced its first formal partner program as it looks to drive more of its enterprise sales through the channel.
Washington, D.C.-based Cogent said it will roll out the program "methodically" throughout the year, with hopes of signing on at least four or five master agent partners by the end of 2014. The initial beta launch of the program this week included two master agents, AB&T Telecom and WTG.
Ernie Ortega, chief revenue officer and vice president of global sales at Cogent, said the company's decision to launch the program stemmed largely from the recent growth it has seen in its enterprise business. He said Cogent recognized the need to grow its sales footprint to support this growth and to drive adoption of new enterprise-focused products, including the virtual private LAN service (VPLS) Cogent introduced last year.
"One of the main drivers of me coming here was to increase revenue growth," Ortega said. "And the fastest-growing segment of our business is the enterprise, or the corporate customer. So I had a choice to make. I knew I could continue with direct sales, and right now we have about 350 salespeople worldwide ... or, the alternative, would be to start a channel program."
Ultimately, Ortega said Cogent hopes to do about 30 percent to 50 percent of its enterprise sales through the channel.
Cogent's channel strategy, Ortega said, will focus exclusively on partnerships with master agents. He said Cogent, in the past, has worked directly with about 300 telecom agent partners but never initiated a formal partner program around that strategy. Moving forward, those 300 legacy Cogent partners will be integrated into the new Cogent partner program and, as such, will start accessing Cogent products through master agents such as WTG, instead of from Cogent directly.
The transition should be smooth, Ortega said, given that many of the legacy Cogent agents already partner with the master agents Cogent is looking to sign. For those Cogent agents who do not work with master agent partners, or prefer to work directly with Cogent, Ortega said Cogent is working on a separate Partner Alliance program.
"I'd be silly to walk away from a partner that is giving us business today but doesn't want to sign up for a master [agent]. That's just not good business," Ortega said. "So, if we have agents that like the program as it sits today, we are going to [place them in] the Partner Alliance program."
The Partner Alliance program, however, will offer partners lower commission percentages and fewer contractual obligations than the Cogent channel program with master agents, Ortega said.
Cogent declined to provide details of the partner compensation structures under either program but said they were "market-competitive."
Vince Bradley, president and CEO of WTG, said Cogent will help round out both WTG's and its agents' portfolios with a robust, high-speed networking solution capable of supporting customers' push to the cloud.
"As cloud proliferates, it will continue to demand higher-speed bandwidth, and I really think Cogent will support that push," Bradley said.
Bradley also said Cogent offers evergreen contracts, which is always a good thing from partners' perspective.
"A lot of carriers out there will have limitations, such as a partner only gets paid when a customer is in term contract, or they only get paid for the first year, or the second year, or they don't get paid on the renewal," Bradley said. "But with Cogent's evergreen contract, then, as long as the customer is paying their bill and the agent contractor is in good standing, the payments and commissions continue."
PUBLISHED FEB. 27, 2014