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

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Distributors Make The Call

Familiarity can be a key selling point for VARs, channel observers agree, especially when the brokering of telecom services comes from a source VARs know. Distributor Ingram Micro, for example, has an established carrier services business, and Tech Data this past spring went live with a program called ActivateIT, a joint venture with Brightstar through which Tech Data essentially serves as a go-between -- filling the master agent role -- for VARs wanting to sell mobile devices and the telecom services to activate them.

Greg Parsonson, Tech Data vice president, corporate development, said ActivateIT leverages OTBT, a wireless solution provider acquired by Brightstar in 2010. What ActivateIT offers is access to TDMobility, a Platform-as-a-Service offering that enables VARs to buy carrier services as if they were buying a SKUed mobile device or other piece of hardware from the distributor -- letting them sell the “last mile” of connectivity from carriers like AT&T and Sprint from a distributor they already know.

The program has seen a phased rollout, Parsonson said, with about 20 solution providers so far -- varying in size from small VAR to direct market reseller, all U.S.-based --and Clearwater, Fla.-based Tech Data will be onboarding many more over the next few months. Recruiting carriers hasn’t been an issue, he said.

“They realize that this isn’t their traditional stomping grounds in accessing SMBs, so they are very anxious [to work] in conjunction with us,” he said.

It isn’t hard to explain the benefits to solution providers, he added, when it’s made clear how much they could fatten their sales and also leave the headaches of dealing with carrier compensation plans to the distributor.

“It’s part of the holy grail for resellers,” Parsonson said. “It’s all margin to them, and it’s a complete incremental profit pool that a lot of them haven’t been participating in.”

What’s important to note, VARs said, is that carrier services can be a key piece of a sale even if they aren’t big money-makers.

Dale Whitney, owner of NetImage, a Shelton, Conn.-based solution provider focused on SMB customers, said carrier services are often a logical add-on, even if the residual benefits to NetImage aren’t so lucrative with customers of that size.

“We’re not interested in going out and doing just carrier services, but it helps as an additional line item,” he said. “The residuals are a great-add on -- maybe that adds a couple of points to the overall sale -- but for most SMB deals, it would be a stretch to add one full point. We leverage it to close deals: It’s a value-add to the client, and if we can demystify the lines they have and educate them on what they should have, that’s good.”

NetImage has had a carrier services business for 10 years, Whitney said. Its vendor partners include Paetec, Optimum and Comcast, and the business covers everything from traditional voice services and analog lines to data T1 connections and broadband connectivity.

Whitney said telecom resellers with which NetImage competes often bundle carrier services with what they’re pitching, but traditional data networking VARs that do it are rare.

“They haven’t established those relationships,” Whitney pointed out.

NEXT: The Great Consolidation

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