A Tale of Two Different Channels

Imagine stepping into an alternate universe, a separate reality where you attend a major channel trade show, but Microsoft, Cisco, Hewlett-Packard and others aren’t there. Nobody talks about “distributors” or even “solution providers.” Instead, the major exhibitors include companies such as Vonage, Telstra, Nextiva and GTT. 

Instead of distributors seeking relevance in the age of the cloud, you are introduced to master agents seeking relevance in the age of the cloud.

Instead of solution providers working hard to differentiate themselves from all the other solution providers, you find sub-agents looking to sell solutions from providers that are completely separate companies.

And “the cloud” is referred to as “new.” This just doesn’t look like Kansas anymore, Toto.

The Other Channel

Welcome to the Cloud Partners Conference held last month by Informa Exhibitions. More than 2,500 channel partners but very few that the typical IT solution provider would recognize. Nor would they recognize us.

These are partners in the telecom channel.  Major carriers like Verizon, AT&T and others, not wanting to carry tens of thousands of receivable accounts have enlisted a smaller group of master agents that, like Microsoft licensing solution providers (LSPs), formerly known as large account resellers (LARs), are the only ones that can order and sell carrier services. These master agents, in turn, have recruited hundreds of sub-agents—which, like our VARs and integrators, resell carrier services and related services.

These are the “voice” guys who any “data” guy will tell you don’t know data, and the voice guys say that data guys don’t know voice.  But that’s all poised to change.

The Newfangled Cloud

A data guy from the IT channel stepping into this alternate universe immediately feels like they’ve gone back in time.

The first headline in the opening keynote says “The Cloud Means Business … Or Does IT?”—which is followed by the astounding bullet: “2015 is the Year of the Cloud.” So what happened to the last 10 years of the cloud?

Sub-Agents are seeing the ground move beneath their feet. Previously, in the time when all the services they sold were installed, provisioned, deployed, implemented and integrated by the carriers that produce them, the sub-agent never worried about the installers bungling the job. They simply sold the service and moved on with full confidence.

Now, with this cloud thing, they’re not exactly sure who is going to do the implementation.

Master Agents have a huge advantage over the IT channel distributors. It’s often difficult to understand what value IT channel distributors add to cloud services, so many IT channel partners just bypass them and go directly to the cloud service vendors. The carrier services that the master agents facilitate for their sub-agents are the actual connection to any Internet-based services, and the sub-agents can’t go around them directly to those carriers.

Carriers are busily partnering with Cisco and others to provision Internet-related services, including cloud services they can deliver themselves through their master agents and sub-agents.

It’s all much tighter-knit around cloud, which is seen as a high-demand workload that will support the sale of ever more bandwidth, the key product everyone is busy selling.