Intelisys To Partners: Don't Miss Out On 'The Mass VAR Migration' To Carrier, Cloud Services

Intelisys Wednesday urged its telecom partners to embrace the "mass VAR migration" that's sweeping the telco channel, as a means to not only grow their businesses but to also "get rich doing it."

"Don't miss the mass VAR migration," said Andrew Pryfogle, Intelisys' senior vice president and general manager, Cloud Services and Complex Bids, during the opening session of Intelisys' Channel Connect event, taking place this week in San Francisco. "We have added a bunch of partners to our community in the past year. But, get this: 57 percent of the partners that have entered the Intelisys community this year alone are VARs."

Pryfogle told Intelisys partners that the telecom agents most poised for growth are those that choose to work with VARs.

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"The smart, forward-thinking sales partners in the room -- and that's a whole bunch of you -- are thinking about how they are positioning their businesses to take advantage of this mass migration of VARs," Pryfogle said. "There is an enormous opportunity."

Like most master agents, Petaluma, Calif.-based Intelisys has traditionally partnered and gone to market through telecom agents. But the company is steadily building a reputation within the VAR community as being a master agent that really gets, and embraces, the convergence of the IT and telco channels.

In August, Intelisys introduced a new version of its Advanced Commissions Program that lets partners choose how they want to receive commissions on cloud and carrier service deals. The aim of the program, Pryfogle said at the time, is to help solution providers maintain the up-front cash flow they've traditionally relied on to run their business while still building up a long-term recurring revenue base.

Intelisys also offers a Channel Alignment Program, which pairs IT solution providers with Intelisys telecom agents to help ease solution providers into the cloud and carrier services business.

Aaron Loehr, CEO of Stratacore, a Seattle-based Intelisys agent specializing in data center, cloud and connectivity services, said he has seen an uptick in the number of VARs Stratacore works with over the past couple of years. Loehr said he especially looks to partner with VARs outside of the Seattle area, as a means to grow Stratacore's national footprint. VARs will work with Stratacore to either serve as referral partner or create their own dedicated agent business by leveraging Stratacore's expertise and resources, he said.

"We see VARs as a big part of our growth strategy, especially if they are out of region," Loehr said. "We are signing them up to become agents of their own, or as a referral partner. If it's the right fit, we are open to making it work."

NEXT: Cloud Driving IT-Telco Convergence

Carousel Industries, an Exeter, R.I.-based solution provider and Intelisys partner, has emerged in the IT channel as one of a growing group of solution providers aggressively moving into the carrier and cloud services world. Carousel recently tapped Tim Kennedy, a 25-year telecom industry vet with stints at both Comcast and AT&T, to build and lead its own dedicated carrier services business.

"Part of my job was educating them, based on my 25 years in the industry, and saying 'you are leaving an awful lot of money on the table with clients, and if we aren't talking to them about [carrier services] other competitors are,'" said Kennedy, Carousel's vice president of carrier services.

According to Kennedy, Carousel's leap into the carrier services world has paid off. He said Carousel's carrier services unit in the second quarter saw sales shoot up 42 percent compared to the prior quarter.

"In August, my group had set a new record for our residual revenue, so we are definitely seeing, in the last three or four months, a hockey stick [growth]," Kennedy told CRN.

While there are a variety of drivers behind the IT-telco convergence -- ranging from mobility to the rise of services-based IT -- one of the biggest factors is cloud. Customer appetite for cloud services -- a market Gartner estimates to be worth $131 billion in 2013 -- is driving the need for both solution providers and telco agents to ramp up recurring revenue streams as a way to address the cloud and services model.

Intelisys, for its part, has seen customer appetite for cloud services soar over the past year. According to Intelisys' Pryfogle, the company and its partners have sold $1.1 million in "new cloud deals" since May 1, 2012, with a whopping $847,000 of that being made in 2013 alone.

"You can really start to see this thing accelerate," Pryfogle said.

In addition, Pryfogle said the average deal size for a cloud services sale has grown in the past year from being less than $2,000 in monthly recurring revenue to roughly $3,000. Pryfogle also noted that in 2012 Intelisys and its partners closed 11 cloud services deals that pulled in more than $5,000 in monthly recurring revenue. So far in 2013, they have closed 36 deals over that $5,000 mark.

Pryfogle said these cloud services deals include communication-, contact center- and infrastructure-as-a-service offerings, with the IaaS piece being the largest of the three.