Recently in VAR Category

The Channel is Shifting - and by that I do not mean a paradigm shift. I mean, that some telecom company channel programs are shifting away from a typical Agent focus and aiming squarely at the VAR Channel.

XO has a distribution deal with Tech Data that gives them access to a ide and deep VAR base. Once the VAR's figure out that taking the WAN piece isn't that difficult, the value added reseller will become what the system integrator is to Microsoft Partners:  the glue that small business needs to mesh it all together.

The Systems Integrator doesn't just install software, they right API's or drivers or database hooks to make data flow in an easier fashion through the system. The basic MCP just sells licenses and Exchange seats. See the analogy? Are you just selling seats or are you looking to become the partner to small business owners? The Go-To guy for all things tech.

BTW, it's not just XO. L3  is making this shift as are other companies. As I like to say, once the guy has seen your porn files on your hard drive, you are going to buy anything he has to sell. That's why VAR's make big coin pushing back-up and VoIP -- just apps to add revenue.

We'll see how this shapes up as Everything Channel pushes into the Agent space and the ChannelVision magazine launches an agent show at ITEXPO West next year. Two weeks to the Channel Partners Expo in South Beach. See you there! (Stop by the TCA booth!)

UPDATE:  According to the latest issue of Phone+, 33% of New Edge Network's revenues come from agents leads. The goal is to move that to 50%.  Broadview Networks says that agents drive about 40% of sales and 50% of new sales. With these kinds of numbers, why are these companies not supporting a strong agent channel through support of TCA?

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.

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.

If a business is moving to UC, how does the decision get made on the platform?

In many cases, the IT Administrator has some responsibility for the phone system (even if that means he calls the PBX vendor). When the IT Admin is tasked with replacing the phone system, what goes into that decision?

Certainly, if the admin is Cisco certified, he will be leaning towards a move to Cisco Call Manager. You don't get fired for buying Cisco. You also go with what you know.  If the admin is an MCSE, he may lean towards an OCS solution.

My guess would be that it would be difficult for a PBX vendor like Shore-Tel or Avaya to pitch their box. It's too foreign. A PBX is an unknown black box. In a business IT department, you go with what you know.  It comes down to IT being familiar with IT vendors. PBX vendors just never bridged that gap. Likely that is why VAR's and MSP's (managed service providers) are having success selling Hosted PBX solutions. IT guy to IT guy. Trust is there because they speak the same language.  Hosted solutions are a concept that an IT guy (or gal) can fathom. After all, what is a server or Exchange or Novell or the mainframe?

Keep this menatlity in mind when heading out to pitch PBX. (Don't call it that!)

SUTUS, the maker's of the Business Central 200 office-in-a-box, have announced inter-operability with Excel SIP Trunking.  The real news for the marketplace is that Excel and SUTUS (along with Polycom) are bundling a system for small business.

The Business Central 200 is developed specifically for businesses of up to 25 employees, Sutus Business Central™ comprises a wide array of advanced telephony, data and networking functions. It includes a business-class phone system, file server, email server, router, firewall, wireless access point, VPN remote access server, and automated backups. It has the ability to simultaneously support both standard phone line and VoIP connections and comes with an array of business productivity features. Now VARs can get the office-in-a-box at almost no cost with a SIP bundle from Excel.

The interoperability allows resellers to provide their small business customers with a guaranteed low cost, reliable and full-featured IT and telephony bundle that is unmatched in the market.  It also allows the channel to better service small businesses due to the Business Central's advanced built-in remote support features. Tech support that would previously have required a truck roll can now be handled remotely by basic support staff.

Steve Weltner, Director Product Development at Excel, is excited about Excel's new SIPpbx Equipment Upgrade Program. He comments, "affordability is a non-factor as the device ends up being virtually free."

"With economic tough times facing everyone there has never been a time where pricing and simplicity have been more important," said Shawn Chute Executive Vice President of Sutus, "Excel and Sutus have come together to deliver on both these fronts, providing the small business customer and the channel that services them with an affordable, comprehensive and straight forward communications and IT bundle. One price, one solution, one contact point, we have made it as simple as it can be to subscribe to a fully integrated solution."

For resellers interested in this Sutus Excel program please contact Sutus at www.sutus.com or 778-371-5286. You may also contact Steve Weltner Director of Marketing at Excel at 972-910-1763.

"SMB Nation is a community of over 35,000 small and medium business (SMB) technology consultants, channel partners, sponsors and resellers. With an impressive 10-year history serving as a trusted advisor and mentor to the SMB consulting and  reseller channel, SMB Nation has been able to consistently reinvent itself based upon changing market conditions." SMB Nation did a VoIP survey with NGT. 260 responded (results here).

These are the services they currently provide:

• Networking infrastructure (91.1%)
• Mobility sales, services, support (52.7%)
• VoIP-specific sales, services, support (44.2%)
• Telephony sales, services, and support (35.3%)
• Line of business applications (35.7%)
• Database development/programming/development (32.6%)
• Web hosting (27.5%)
• Host e-mail (26.7%)

These are the services they will add:

• VoIP sales, service, support (56.2%)
• Security (36.6%)
• Telephony sales, services, and support (28.1%)
• Web hosting, hosted services (25.5%)

It's interesting that Telecom Agents sell circuits and very few want to sell non-telecom services, but VAR's and MSP's are marching in to take over the Agent Arena.

If you are a channel agent or a VAR or a service provider looking for a VoIP Provider to be your VoIP provider, there are 6 questions to think about:

1. Do you want to White Label, wholesale or a retail package?
2. Will you be serving consumers or businesses?
3. Will it be POTS replacement or Hosted PBX?
4. Will you be selling PBX, phones and other hardware?
5. Do you want to do Tier 1 support?
6. How will you sell it? (Or do you have a sales team?)

While many ITSP's (Internet Telephony Service Providers) can do all of it - white label, wholesale, retail, hosted PBX, analog replacement - it is difficult for each to excel at all of that. And you don't want to get half way down the road to have your vendor shift gears and the wheels fall off.

Support is key because "the blinking light" syndrome means that you will be getting calls about "how do I do that?" or "why can't I dial long distance?" So it's good to define responsibilities (and what is Tier 1 support).

Why know your market? Because most ITSP's have not designed an offering to compete against Vonage, Magic Jack or the cable companies. (And besides B2B is way more profitable).

The last question is real: How will you sell it? If you have 100 clients, only 10-20% are going to convert without some type of sales effort. And that doesn't amount to many lines for all of the effort that both you and your vendor will be expending to get this partnership moving forward.

I have seen far too many ITSP's bring on numerous agents/resellers/VAR's/partners, only to see lots of start up activity that never converts to enough sales activity to account for the effort.

"Nearly one-third of VARs (value added resellers like Cisco certified IT shops) are planning to grow their businesses in excess of 15 percent in 2009", according to CRN.

The most interesting quote was not about the importance of Managing Cash Flow or How Goal # 1 is Finding new busines, it was this quote:

"When we asked them to rank what is most critical, they said "finding new business." Note the word "finding" because these are not organizations waiting around for Microsoft or HP to send them sales leads. Growth-oriented VARs in a down economy go out and find new customers."

Good agencies have a Lead Generation system in place. But one thing Agents ask for from their vendors (carriers) is Lead Gen.

The other point was keeping "up with changing technologies. With growth VARs, this doesn't mean perusing a vendor's latest offering -- it means they are in front of customers with Oracle's new $750 express database application before the local rep checks in to see if the marketing materials have arrived."

Johnny Hustle, like never before

Agents are paddling like a duck in a pond to stay afloat. Always have been, but moreso now.  Many companies are wondering how to get Agents to sell their services. (I get this daily). Here's some thoughts:

Agents spends all day just running their business and keeping customers happy. To add another vendor and/or service, the agent has to take time to learn it and  evaluate it. Then figure out where that service and vendor fits into his portfolio.

A carrier doesn't realize how much they are asking of the Agent.  Time is money and a lot more. To maximize the time and effectiveness, vendors should look at the top 5 ways to improve agent training.

1. Have good training available online as video and as a podcast. (As a downloadable MP3, agents can learn while traveling).
2. Create a Clear, Concise message. Most don't have this. A good Positioning statement, USP, or why choose Carrier A over B.
3. Case studies by verticals helps agents figure out where the service fits.
4. ROI and TCO calculations help sell the service.
5. Specific sales examples, like Agent X sold Service Y to Client CDE because CDE needed Z.  (What was the sales trigger?)

Make it clear, concise, and memorable.  Case studies and sales triggers are like story-telling, which is the most viral way to get your message across.

Tech Data and Fonality Inked a distro deal.The bloggers like VAR Guy made it sound like Tech Data was going into managed services under the whole UC umbrella. It's just one more set of SKU's for Tech Data's IP PBX category.

New Edge Networks announced Voice Connect as an extension of its MPLS service to deliver VoIP to end offices with QOS. "Voice Connect services include Hosted IP PBX, SIP Trunking and enterprise class features, with a variety of service options for locations requiring only a few voice lines to supporting the needs of large corporations."

Grandstream's GXE502X IP PBX and AireSpring's SIP Trunking Services Achieve Interoperability. Inter-Op is key because SIP Trunk is a spec not a standard. SIP trunks can be delivered various ways unlike a PRI which basically has 2 configurations available off a class 5 TDM switch.Note how specific the model number is for Grandstream. I feel sorry for the office with GXE502 or GXE501X.