Vendor Buys Its Platinum Partner

Peter : On Rad's Radar?
| Peter Radizeski of RAD-INFO, Inc. talking telecom, Cloud, VoIP, CLEC, and The Channel.

Vendor Buys Its Platinum Partner

"Vertical Communications, a provider of business communications software, announced that it has merged with Fulton Communications, a national systems integrator of voice, data and video communications technologies and one of the Inc. 5000 "fastest growing companies in North America."" Fulton is a Vertical Diamond Partner, who has sold more Vertical solutions over the past two years than any other channel partner."

"The new combined company will offer business customers vendor-direct communications technology solutions, including cloud and premise-based enterprise telephony, unified communications, and vertical-market voice applications, as well as a local presence for direct sales, support and professional services in major markets across the United States." [press release]

One Master Agent thought this was notable since the software company is looking for more direct sales (rather than rely on the channel). Many of the Master Agencies are in fact running a direct sales force in the background behind their prominent indirect sales model.

As Vertical makes moves to do more direct sales (by merging with its top partner), many cloud companies are entering the channel. (That doesn't mean many of them will have success in the channel; it just means many are leaning that way.)

My perspective on why masters have call centers to sell direct centers around the huge commitments that the carriers have saddled masters with. Commitments that don't decrease but continually go up -- with the residual commission of many sub-agents in the balance.

I think some of the problem lies in the channel strategy. We know that the relationship between the master and the sub-agent holds more sway than a point or two of commission. With all of the musical chairs that have occurred in telecom personnel in the past couple of years, it is likely that some carrier relationships with agents have been damaged or lost.

There is also an alignment issue. With the shift in products that carriers and vendors are pitching, the channel partners may not have a need for it; their client base may not have a need for it; or the channel partner may already provide it or have a preferred vendor for it.

While the carriers may be pushing new services, they aren't doing education on what to sell, to whom and why the customer would buy it. In other words, a lack of USP or value proposition. [BTW, saying we are chasing multi-location doesn't help because that's what everyone is targeting.] I wrote about this before in the form of the large number of Hosted PBX providers out there without a value proposition. How much competitive advantage talk is there? None.

What does this have to do the Vertical-Fulton deal? Well, Vertical probably was looking for more control over its sales funnel.

Another couple of thoughts: It could be that their channel partners have pivoted to selling other products or vendors. It happens.

It could be that Vertical pivoted or delivered an update or new software that is buggy or not what the channel partners wanted / needed. There are many factors that go into a successful channel sales strategy, not the least of which is communications between the vendor and the channel partners. At the end of the day though, vendors have to do what they think is best to maintain sales and sustain the company. That may not jive with their current partners.

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