Survey: VARs and Systems Integrators Sway Carrier Service Sales

Level 3, he said, is taking steps to encourage such relationships between agents and solutions providers with a matchmaking program it calls Partner2Partner Connection. Often solutions providers don’t know who to turn to for help with carrier services, so this service helps them find a partner, he added.

Telephony Agents Should Partner with VARs and Systems Integrators

While carriers have long expressed interest in solutions providers as a channel for their services, telephony agents who can partner with solutions providers can help grow the piece of telecom spend that goes through the channel, Schlagbaum said, noting that the more than 200,000 solutions providers could strengthen the comparatively smaller agent ranks. While most major gearmakers sell 60 percent or more of their products through the channel, most major carriers sell a much smaller percentage of their services through the channel.

Level 3’s partnering program is finding early success, Schlagbaum explained, primarily because of the carrier’s focus on big bandwidth. Indeed, the survey showed the top applications solutions providers sell that include carrier services involved higher bandwidth (see Exhibit 2). Security solutions were most cited (81 percent) as accompanying carrier services sales. WAN migration came in second (66 percent), followed closely by SAN (64 percent). Data center and disaster recovery solutions logged in at 53 percent.

VARs and Systems Integrators Seek Reduced Churn

The nature of these services gives the indirect channel a greater degree of account control over circuit sales alone, Schlagbaum said.

But it rubs both ways. When asked why they sold carrier services, solutions providers most often said it was in an effort to increase customer loyalty (see Exhibit 3), but nearly as many said it was to keep competitors out. Increasing revenue/margin also was one of the reasons cited. Schlagbaum said respondents reported that when they added carrier services, the profitability of a three-year deal went up between 50 percent and 100 percent above the hardware sale alone.