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This Q & A with Craig Schlagbaum, Vice President, Indirect Channels, Level3 comes from their monthly newsletter and is printed with Craig's permission.

Q: What is the top reason that partners should sell Level 3 today?
A:It's been about two and a half years since we launched the program, and our customer's experience today is the best it has ever been after integrating seven other carriers. We're now meeting our CCD set/met and our standard intervals at 90/90/80 percent of our goals which means customers are getting installed on a timely basis. I would also add that Level 3 is the premier alternative service provider with a global IP network providing greater customer responsiveness and expertise at more competitive prices. And for our partners, we offer a complete portfolio of enterprise solutions including voice, data, and IP, that they can provide to their customers.

Q: What steps did you take to reach these customer and partner satisfaction goals?
A: We have worked diligently to focus on making the customer our number one priority. We've redesigned our partner and customer support teams to streamline the customer experience, give us better visibility into their needs and how to best meet them. We've empowered our partners with tools like MasterStream, the Level(3)Enabled Portal and the Business Partner Portal, and we've put together some really aggressive promotions for our partners and their customers.

Q: How much impact has tools like MasterStream and your portals had on the program?
A: We have tripled our quote volumes since MasterStream launched because it's made it a lot easier for partners to do business with Level 3 and respond to their customers' needs immediately. They can use it to quote all major Level 3 services automatically. The partner portal also offers partners a wide range of resources like on-net location data, service maps, marketing collateral and training. In addition, our customer-enabled portal has real time data on customer installs, and trouble tickets can be generated without a phone call.

Q: Are there any new incentive programs partners can take advantage of?
A: There are tremendous incentives right now. The Economic Stimulus Promotion has been extended through the end of the year and we just announced the "Connect NOW with Level 3" bonus. This new program lets partners earn a one-time bonus payout based on sales growth from August 3rd to October 31st in addition to their existing commission rates.

Q: What are some advantages for partners that diversify their offerings with Level 3?
A: Well, I think it's really important that partners have diverse offerings beyond the incumbent carriers and we think we have the best alternative solution in the U.S. today - especially considering that more and more VARs and System Integrators want to offer total solutions to their customers and we can help them provide it. As more applications, storage and monitoring are provided as "on-demand" services, we become a more essential ingredient to our partners' solutions and a critical component to solving their customers' business issues.

Another key advantage is that we view our partners as an extension of our sales force; an integral part of our overall business strategy. Since we are vested in our partners' long-term success across the board and we are nimble enough to respond to their needs, they can lead with us and feel confident in our strong support for them.

Q: How do you validate that you're making strides in the program?
A: We have a great survey program called Voice of the Partner, or VOP. Our VOP surveys are showing the best ratings we've ever had - in particular for Partner Sales Managers, SE, Partner Support Group, partner marketing and our overall ease of doing business. These surveys validate that our partners feel all of these program elements are very strong, and it tells us we are in a strong position to be a leading carrier supplier for them.

Q: Given everything we've discussed, can you recap all the key reasons why now is best time to sell Level 3?
A: Certainly. We offer a superior customer experience and we are dedicated to the long-term success of our partners. We provide the support, resources, tools and aggressive incentives necessary to make it both easy and profitable to do business with us. And, we are uniquely positioned to help our partners diversify their service offerings in the marketplace and provide their customers with a total. In short, we are a strong partner, we provide solid customer support, we are easy to do business with and we provide strong financial motivation for our partners to sell Level 3.

For those of you who missed it, Nortel is being sold off in pieces.

"Ericsson announced its interest in Nortel's wireless assets late, but it came home the winner, paying $1.13 billion for Nortel's LTE and legacy CDMA business." [Doug]

The Enterprise unit was sold to rival Avaya for $475M. [Reuters]

Radware had previously purchased Nortel Alteon business.

Having sat in a session with Nortel last week, it can't be fun to work there. Worse, it can't be fun to be a Channel Partner. Any residuals are likely gone. Worse is that you can't confidently sell Nortel solutions. How could you? It's bankrupt and being sold off. I wouldn't lend my reputation to a company in BK. Time to come up with a new business plan. We certainly live in interesting times.

I talk with many CLEC's and ISP's that are looking at the BTOP and BIP programs to see if there is opportunity for them. As I said in the podcast with Occam Networks, most of the funds are earmarked for companies already collecting USF funds. Why do I think that? Because it is a safe bet and politics is about safe bets.

I'm attending Tech Data's Technology Solutions Tour. This morning started with TD SVP Pete Peterson discussing how to translate the stimulus spending into technology opportunity. The ARRA (aka the Stimulus bill) will spend about $787B, of which, according to the counter at Recovery.gov, over $75B has been spent. One percent of the ARRA is the Broadband Stimulus spend at $7.2B spread over 3 agencies and 3 different awards. Did you know that $50-60B of the ARRA is earmarked for IT Spending for Education, Healthcare, Energy and Government? That money will go for smart grid, green IT, virtualization, EMR (electronic medical records), video surveillance, Business Intelligience tools and more. It's a bigger pie than BTOP/BIP.

Did you know that the largest spender right now is Uncle Sam? Or as many people like to say - the taxpayer.

Anyway, Peterson told us that some cities and at least one state (Cali) does not allow the deployment of servers on-premise. It's a Green initiative and they are pushing Hosted servers or virtualization. I haven't heard that but it certainly interesting. (Also of note: No on has said Cloud since I have been here).

Another stat: there are 1 million doctor offices. Only 8% have EMR. The government wants it closer to 90%. There are funds and tax credits for that. Funny story: Nortel was pitching their Healthcare Management Programs yesterday, but didn't want to discuss the Bankruptcy nor the way the company is being sold off in slices. Um, tough to sell a solution that may not be there by the time the deal closes. When a VAR or Agent presents a solution, they are lending their reputation out to that vendor. If that vendor fails to deliver, it's a black eye for the VAR/Agent. (Psst: our most valuable asset is our reputation).

B.I. tools are important. Why? It adds productivity and efficiency to the organization that can correctly deploy and integrate it. (It's challenging).

Education will be spending on Broadband, IT infrastructure, Video surveillance, and digital signage. Go get you some From Tech Data, of course. They have SME's (subject matter experts), product specialists, marketing funds and other assistance available to help you take advantage of the current ARRA opportunities. (Including Wireless and other communications infrastructure projects).

Peterson concluded with a few insights:

- This is a Call to Action for service providers and VAR's
- (It is unprecedented in my lifetime and we likely won't see this again. It is a magnitude larger than Y2K and closer to what the US spent on NASA going to the Moon in the 60's).
- Recovery.gov is a great resource.
- Great companies are made in tough times.
- The flexible survive.

On the LinkedIN Group for the Channel Partners Network, Heather Margolis wrote, "Cloud Computing has spurred the need for a new type of VAR and/or partnership elements. Read more here and tell me your thoughts." (That's one way to get traffic to your blog).

My thoughts:

It's not about saving a client money any more. It's about saving them time, making their employees more productive, and adding business efficiency - without the technology getting in the way (which isn't always easy). 

Being the Trusted Advisor today means being able to add Business Intelligence to the solution. Systems Integrators were valuable because they could provision, implement and glue all the parts and pieces of hardware and software together.

Most Systems Integrators had a niche. Well, we call it a niche today but back then, they were in a software silo. The silo was created around the programming language they were proficient in.

 ManyVAR's/Agents/Account Executives have a similar business issue today. They only know one or two programming languages (POTS/PRI/DSL/Integrated-T1). When you only have a hammer, everything looks like a nail. For example, is a Cisco VAR going to recommend non-Cisco gear? 

Understanding Cloud Computing and what it truly means for the Business going forward is an Integration Process, because most often when Hosted PBX or SAAS are introduced into a business, the process changes. The business must be prepared for those changes - otherwise the results will be disasterous.

Then there is the concept of the Cloud itself.  (Do you know how many data center outages we have had in the last year? How many fiber cuts? Lots!)

The Cloud is big because all the vendors are hoping that it will be the Next Wave of Revenue. The truth is that many companies pushing Virtualization and Cloud Computing have zero idea what they are doing; have little security in place; redundancy is phase III of the business plan; and the customer is clueless about what they are buying versus what they are really getting.

This isn't POTS or DSL. It's more like SIP Trunking - a decent spec, but not a standard.  

What happens when the data center is unreachable? No one is working. It is costing the business money. 

There are many questions to be answered: Is the data backed up in real time? Is it saved off-site? Can it be accessed in an emergency? How? Business Continuity Planning is an ugly word that no one wants to talk about, but as Voice, Databases, business life-blood moves to the Cloud, BCP better be in place and many questions need to be answered. That's not a five minute conversation while looking at last month's bill.

As per the press release, you would think that the last bunch of transactions had just crippled the accounting firm.

As previously announced in its Form 8-K filings with the SEC, the Company has been delayed in filing financial reports pending completion of its 2008 audit. The Company's change in independent registered public accountants and the complexity of the technical accounting treatment required with respect to the embedded derivatives resulting from the sophisticated financial instruments used in several of the Company's financing transactions were factors in the delay, which has resulted in the suspension of trading from the OTC Bulletin Board. Completion of the audit and filing of financials with the SEC is expected during July, at which point the Company plans to apply for reinstatement of trading of its common stock on the OTC Bulletin Board.

But a document mailed to me today states that Global Capacity, Inc. is experiencing "an unplanned cash constriction". Nice phrase. What does that mean? No commission payments since January.

Global Capacity Inc purchased 4 companies in 33 months. The acquisition of Vanco Direct in 2008 was the pincher due to $6M in accounbts payables. Revenue doesn't mean diddley. Cash flow is king, folks.  I hope GCG's plan works because I like getting paid my commissions on circuits sold.

Expanding network into Charlotte and Raleigh was just the start of expansion for  XO in 2009.  

XO's been adding even more services to its too-big catalog lately. (I say too big because even XO sales folks don't remember half of what they sell or can brief prospects on more than a handful). The catalog is RBOC sized including Hosting, wireless, IP, VoIP, PBX, SIP trunks, transport, collocation, TDM, Ethernet, and Managed Services.

Oh, I forgot wavelength services too.  And in a deal with Pacific Crossing, XO extends its reach to the Asia.

XO is back to pushing Fixed Wireless that it relegated to the old Nextlink brand.  It was mentioned recently when XO announced that it was adding new speeds to its Hatteras based mid-band Ethernet service.

XO is also pushing Concentric, its hosting brand, with the announcement of a Managed Backup Service.  According to Phone+ magazine, the service will be sold via a new VAR Channel Program (as well as current XO Business Partners).

Beyond transport, XO added Hosted IVR, labeled as an Inbound Teleservice, and XO Connect, which is a mass notification service. I guess, they are taking lessons from Ifbyphone to use SIP to do more than make cheap calls.

And finally XO has an agreement to extend VoIP to 2800 LSO's in the US. That deal apparently also includes transport and transit to 2800 rate centers.

That's a lot of expansion once the heavy debt was lifted.

I received an invite yesterday from XO to come down to the Tech Data Expo at the Don Cesar Hotel in St. Petersburg FL. ADTRAN shared the booth with XO at this event. Surprisedly, the other two carriers that distribute through Tech Data had assigned booth space, but were absent. 

XO is a good fit for Tech Data. While I think the XO catalog is too large to know well - wireless, hosting, IP, VOIP, transport, collocation and more - the VAR's at Tech Data vary so much in what they do and what would complement their business that the wide selection helps - IF you can get in front of them and remind them throughout the year how they can take advantage of the additional revenue stream. 

For many VAR's the advantage of XO through Tech Data is that there's no contract (especially for those VAR's already under contract with Ma or Pa Bell) and with Tech Data as the "master agency", it isn't likely you need to worry about your residual check.  (And now that XO has converted their debt, it is in a good position going forward, which other debt laden CLEC's can't say).

Many VAR's are already in the PBX space and were asking about SIP. I wasn't sure if they actually grasp the concept of SIP or that they just know enough to be dangerous. The biggest difference between a PRI and a SIP Trunk is Inter-Operability. PRI is a standard with two available configurations that work with almost all the PBX's on the market. SIP Trunk is a spec - a collection of a lot of RFC's that have to work together just right to provide dial-tone. Broadsoft, the softswitch that XO is using, has tested inter-operability on many IP-PBX systems. Not so for other SIP Trunk vendors. So before you sell that SIP Trunk make certain that the IP-PBX model will inter-op with your SIP trunking vendor. It's a mess if it won't work.

Remember the MCI Agents who didn't like the new deal under the Verizon Business umbrella, who were pushed aside and lost commissions? Did you know that when Verizon did their funky little deal with Fairpoint over the New England region, VZ agents were pink slipped. In fact, one agent is suing Fairpoint. It's the quote from Beth Fastiggi, a spokeswoman for FairPoint, that shocked me:

"We believe that our own local employees can better serve our local markets and, given the appropriate resources, will have the commitment and ability to increase our share of the local business market," Fastiggi said in a statement Friday.

Don't need agents. That attitude explains the lousy service, numerous complaints to the PUC, and the lose of over 100k lines - in a rural market!

Today, VZ announced it is spinning off the landline network in 13 more states - to a joint venture corporation with Frontier. I'm certain those customers are thrilled. At least, they had a slight hope of getting FTTH. Now, not so much.

Frontier does have a Business Agent Program. I don't know anyone in the program so I have no comment on how strong it is for agents.

Embarq agents are waiting to hear what happens to them with the CenturyTel merger. These mergers do impact both consumers and small businesses, especially the agent businesses.

"Level3 is expanding is expanding its operations in key local markets throughout the United States. These actions are designed to provide a world class customer experience for mid-market business customers in these markets. Level 3 is launching the first phase of this initiative in the Nashville, Seattle and Washington, D.C., areas, as well as upstate New York (Buffalo, Syracuse and Rome/Utica) and Colorado (Denver, northern Colorado and Colorado Springs)." [press release]

Level3 has gone back to the Type II CLEC strategy of offering service to everyone they can touch via their own network and UNE / Special Access from the ILEC. It is pouring personnel into these markets to take on as much revenue as fast as it can. Under that plan, L3 is having face-to-face meetings with its Channel Partners.

Please join the Level 3 team at a special Partner briefing and Open House event in Buffalo, Denver, Nashville, Seattle or Washington, DC, and see why it has never been easier to link globally and connect locally. Following the briefing will be a reception where cocktails and hors d'ouvres will be provided. RSVP to your channel manager for one of the following events in your local area (2 PM local start time):

Now's the time for agents to take advantage of the push in each market. Pricing and spiffs are aligned for this market push. Here's hoping this is the turn around point for L3.

This expansion by L3 comes after XO expanded in RDU and Charlotte markets last month.

In another pr, Level3 financing news.

The Technology Channel Association hosted its first agent webinar on April 30. Steve Cadley at Cadley Consulting Group and Peter Radizeski, your blogger and TCA founding member, presented on the Top 5 Sales Practices that agents need to incorporate. We had a good turn-out, which is great because that means agents want training.

It was not a bunch of tips and tricks. It was a discussion about the sales process that is used by top performing sales people.

I'm an active telecom agent so I was able to add some examples. Steve was a channel manager for many years before striking out on his own as a sales trainer. Next up is a session on best practices for channel managers. Stay tuned. (Join TCA).