Comcast, Kaseya, Alert Logic Debate Convergence in #CPExpo Panel

By T.C. Doyle

What’s the likelihood that telecom agents and IT managed services providers converge as a single market force? The answer depends upon whom you ask.

Today, there is great debate within the information and telecommunications technology (ICT) channel over which business model will prevail or even if these types of companies actually compete.

Comcast’s Craig Schlagbaum

“They occupy different places in the tech universe,” says Craig Schlagbaum, vice president of indirect channels at Comcast Business. But others aren’t so sure. Take Chris Rajiah, senior vice president of global alliances and partnerships at Alert Logic. Rajiah sees many instances of agent and MSP collaboration, not to mention convergence. More than few of the agents he’s familiar with offer MSP services today.

Whether channel convergence is a trend or an aberration is one of several topics that Schlagbaum, Rajiah and other members of the Channel Futures Think Tank will debate in Las Vegas at the Channel Partners Conference & Expo. They will be joined on Thursday, April 11, by Jim Lippie, general manager of cloud computing at Kaseya, on a panel called, “Channel Convergence: Inevitability or Implausibility?” which will be moderated by Marie Rourke, founder and chief channel strategist at WhiteFox Marketing. It’s part of the business strategy conference track sponsored by Nextiva.

In advance of the event, Channel Futures reached out to Rourke, Rajiah, Lippe and other members of the Think Tank for their views on channel convergence, market disruption and customer experiences. Here what a few had to say.

Channel Convergence

In the past few years, many channel experts believed that VARs, MSPs, agents and other channel partners would embrace cloud technology and approach customers in a similar fashion. But it hasn’t happened, in the main. Different business models, sales motions and even customer buying habits have kept these partners – agents and MSPs especially – in different “swim lanes.”

SolarWinds’ Dave Sobel

“The fundamental disconnect between the groups is that most agents don’t want to really deliver anything to anyone, and most MSPs want to deliver everything to everyone,” says Channel Think Tank member Dave Sobel, senior director of MSP evangelism at SolarWinds. In many instances, these different partner types sell to different buyers and pursue different sales objectives, he adds, which explains why these entities have not converged as one or even found ways in which to work together, for the most part.

But that may be changing as more customers put their faith in cloud computing. As they do, they look to a reduced set of partners to cater to their digital services’ needs.

“We believe both [types of partners] can win and work together,” says Think Tank member Ryan Walsh, chief channel officer at Pax8. “The key to leveraging the co-winning comes from understanding the nature of each business model and finding ways, like a good sports team, to leverage each other’s strengths.”

Alert Logic’s Rajiah, for one, believes agents have been unbeatable when it comes to delivering complex solutions for individual end users. Their ability to mix and match service providers, pricing plans and unified solutions is unrivaled. MSPs, on the other hand, have demonstrated an uncanny ability to offload more of the heavier support services that customers have, especially when it comes to infrastructure maintenance and management.

‘In short, both [types of partners] are winning and we need both to effectively service clients’ needs through the channel,” says Rajiah.

Channel Disruption

While few agree if and when different channel companies will come together, most experts believe that channel disruption is inevitable. New business models, technologies and customer priorities will inevitably force channel companies to rethink their fundamental strategies. This has never been truer than in the era of cloud computing.

“In many ways the channel is still digesting the effects of the cloud,” says Lippie. “The more companies move to SaaS apps, the multitude of backup products and the additional security concerns the cloud brings to the ecosystem.”

Rajiah, for one, believes partners can insulate themselves from …

… upheaval by developing unique capabilities and know-how that will appeal to a specific customer set not matter what disruptions occur.

“Technology is changing rapidly and often. Customer buying habits and evaluation methods are changing. And customer problems are not just solved by a point solution, but require a wider set of offerings, instead. For a partner to keep up with all this and grow rapidly at the same time is difficult. To scale and drive exponential growth might require that partners pick specializations and go deep so they can be experts in their respective area and create brands that can drive the growth,” says Rajiah.

What kind of specializations? Think hosted voice, video and SD-WAN, among others, he says.

“These are critical business functions that are still predominantly hosted on-premises or in colocations owned by the users,” he says.

A related disruption is in the delivery and support model itself. Customers, Rajiah notes, are wanting a managed service more and more.

“This model is customary for certain types of partners like MSPs who deliver this way already. But, for a traditional system integrator or VAR, this is a new way to transact and deliver,” he says. “Changing business models [are] disruptive, but necessary. Suppliers that can accommodate this model today are forcing legacy suppliers to change their delivery and solutions to match.”

Customer Experiences

In addition to convergence and disruption, changing customer expectations is also turning into a big trend, Think Tank members agree. Nowhere is this more true than when it comes to creating customer experiences, both the ones that customers get from partners and the ones partners help customers create for their own customers.

The experiences consumers and business people alike enjoy with Uber, GrubHub and beyond are transforming expectations, Think Tank leaders say.

“[They’re] changing the rules of the game for the channel,” says Walsh. “Historically, a good product or service delivered at a competitive price defined who won in the marketplace. This is not the case anymore. A company’s ability to deliver an amazing customer experience will be the ticket to retain[ing] customers as well as prospecting for new ones, especially when those customers share their experiences online, which is happening every day on social media.”

Rourke concurs. The power of social media, she insists, cannot be underestimated. And partners who ignore its influence do so at their own risk.

“Social media shines a spotlight on the customer experience [around the clock]. Whether you get it right or get it wrong, the customer experience is now socially shared,” says Rourke. Think Tank member Jennifer Anaya, vice president of marketing with Ingram Micro, agrees.

“Technology companies need to consider how their channel plays a critical role in delivering a better experience to their end customers. We also need to be honest about the barriers we’re putting in place that create poor experiences for our channel partners, and may impede the experience we collectively deliver to the end businesses we’re serving,” Anaya says.