More on the Microcorp and TDMobility Deal

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| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

More on the Microcorp and TDMobility Deal

Microcorp announced a deal with TDMobility (here and here). I have written about TDMobility before (most recently here and before), where I proposed that it would be a small leap for TDMobility to become a master agency. Instead, TDMobility teamed up with a master agent, Microcorp, instead.

Tech Data already has a direct relationship with XO. I mentioned that it isn't going stellar - and I want to elaborate. Tech Data, like any hardware VAD, has a unique model built around distributing hardware and software (licensing) for partners like Cisco, Microsoft, HP and IBM. The VAD works on slim margins - like grocery chains - counting on co-marketing dollars and other incentives from its partners to bring in revenue. Those co-marketing dollars (and associated quotas) dictate the attention that a partner gets, the same way the P&G pays to get perfect placement for Tide on the laundry aisle.

Smaller partners are relegated to the corners of the website or among the millions of SKU's in the catalog.

The VAD has tens of thousands of VAR's as customers, but hardly any are exclusive. When I was working for a VAR we had accounts with SYNNEX, TD and Ingram. A purchase comes down to pricing, stock and location. A battery backup from APC is very heavy. You want it to be available (in-stock) in a warehouse as close to the end user as possible to cut down on shipping costs (and delivery times). That - more than anything - determines a transaction.

Now as we move from inventory to services (cloud or telecom), things change. VAR's will not want to have to log into numerous systems to place orders or check status, so one VAD will win the majority of the business from a VAR. No longer will a VAd have tens of thousands of (shared) VARs. Once a VAR chooses a VAD for a servcie - whether that is Office 365, backup, or cellular - it is very likely that the VAR will stick with that VAD for all future similar transactions. A very different model for the VADs to deal with.

What else changes? All that warehouse space and inventory will shrink as the shift occurs from hardware to services.

Now in the telecom space, while TDMobility may have a handle on the paperwork for a cellular sale - a very transactional sale - the move to voice, Hosted PBX, MPLS and SIP Trunking will be very different!

The VAR's won't know which carrier to ask for quotes from at first, so there will be a lot of channel manager intervention (or a crap ton of useless quoting).

Telecom orders require a lot of paperwork - agreements, surveys, LOA, etc. Clean paperwork hand-off results in a happy customer, an accurate order and usually timely compensation. There isn't any online ordering. The missing link here is twofold: (1) back office; and (2) access to VAR's.

Telecom doesn't have a back office system. There aren't any API calls that can be added to improve efficiency. There is just a mess of manual systems that will have to be pushed, poked and jeered.

Imagine if you will, a VAR putting in a quote request for a cable broadband circuit, getting a site survey form (that resembles a service agreement more than a little), submitting it, waiting, getting an okay, and then ten days from the start told that it is a no-go.

Or an order for a 10MB DIA circuit languishing on someone's desk at a CLEC office for an extra month or so before frantic calls get it moved up the supply chain line. You think I make this stuff up? In 2012, telecom is more broken and antiquated than it was in 1996. How you can talk about cloud services and not build one cloud service from the ground up to act as ordering-billing-ticketing is beyond me.

Access to the VAR's is another hurdle. There isn't a gate to get at the advertised "60,000 resellers". TD's own people don't know the event schedule. Only a handful of the VAR's attend the show - like the Agent shows as well. This adds even more shows to the schedule for both Microcorp and its carrier partners. Despite this time and monetary expense for an additional show schedule, will you touch enough VAR's to make the process (and partnership) worthwhile? We will see.

I'd like to know how the commission situation is going at TDMobility in cellular. I know of authorized agents who have filed lawsuits for carrier-wide abuse of charge-backs from cell providers. Commissions are the reason we are in this - and those commission numbers will be sparse in comparison to Ingram's $36B in annual revenue and TD's $26B.



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