Cloud services offer the promise of lucrative, monthly recurring revenue, but solution providers always need to be able to offer a full IT solution to their customers. To that end, connectivity services are critical: Customers can't reach the cloud without it.
CRN's Network Connectivity Partner Program Guide is designed to help solution providers navigate through this changing landscape, highlighting those companies that can put them in the best position to offer that full solution.
Association Resource Group, a telecom agency based in McLean, Va., has been around for 25 years helping 3,000-plus midmarket companies with their voice, connectivity, collaboration and cloud needs. The solution provider has seen success by evolving with the market, said Greg Praske, co-founder and CEO.
While cable services are still a large part of its business, ARG has recently seen extensive growth over the past three years around cloud-based voice services. Its fastest-selling business segment today, hosted voice, accounted for more than 30 percent of ARG's sales and the company is projecting more growth in this segment by the end of this year, said Praske. ARG partners with many of the traditional carriers and cable companies, some of which are becoming meaningful fiber providers, he said.
Comcast and Cox Communications are primarily responsible for serving ARG's service areas. Comcast, in particular, is starting to get more aggressive in its fiber-based services, he said.
Fiber-based solutions will be especially appealing to companies seeking redundant access to their cloud environments, Praske said.
"As we move [customers] to the cloud, one of the critical aspects is you have to have sufficient bandwidth and you need redundancy for that bandwidth, so fiber is the great enabler," he said. "I see the cable companies as really being part of that ecosystem."
Fiber has become the de facto connectivity service for cloud-based services, according to Craig Schlagbaum, vice president of indirect channels for Philadelphia-based Comcast Business.
"With cloud, there's a requirement for many businesses to have a certain amount of uptime, availability, and lack of jitter," Schlagbaum said. "As a result, they want a [service-level agreement], and fiber services carry the SLA. Coax services do not."
While ARG's Praske said cloud is the sexier sell over connectivity solutions right now, cable services can't be ignored. "As a solution provider, our whole mission in life is to build a relationship with our client and really assist them with all their needs, so cable is a part of that solution," he said.
Andrew Pryfogle, senior vice president of cloud transformation at Petaluma, Calif.-based Intelisys, agreed. Solution providers looking to take their portfolios to the next level and build up their recurring revenue streams have to include both cloud and connectivity services, he said. (Earlier this month distributor ScanSource inked an agreement to acquire the master agent for $83.6 million.)
"A lot of [partners] are trying to figure out how to do both, and how to take advantage of this convergence between cloud and connectivity, but we are finding that one is feeding the other," Pryfogle said. "If you don't have both, best-case scenario is that you're leaving a ton of money on the table."
Comcast's Schlagbaum said understanding that convergence is key to success. "There are two things left in life - the applications and cloud infrastructure they ride on, and the data connectivity and networks that carry the bits," he said.