Inside the 'Freight Train' Telarus-TCG Acquisition and Future of Technology Sourcing
Will partners of the future take up the brands of their distribution partners? Leaders from Telarus think many will.
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Telarus CEO Adam Edwards (pictured here from a past Telarus Partner Summit) shared earlier this week that Telarus and TCG’s subagent bases contain little overlap.
Dan Pirigyi, former partner at TCG and now SVP of strategic partners at Telarus, told Channel Futures that TCG has built a unique partner base thanks in part to local outreach in secondary and tertiary markets. And TCG helped many of these partners grow from the ground up, Edwards said.
“They truly did identify more partners and bring more partners into the industry than I believe any other TSB has done in the last 10 years.”
The challenge, as partners noted, was helping those agents grow to the next level. In particular, many of them needed additional tooling and engineering resources, Pirigyi said.
“You’ve got these partners who are growing and asking these questions of, ‘What’s next? What more can you do for me?’ I saw TCG looking to answer that question,” Edwards said.
And Telarus, Edwards said, can help.
“The fact that they have longstanding, trusted relationships with these producing partners means if we can smother them with more technology and resources on that foundation of relationship, that’s where the win is.”
Edwards said his company and the new generation of TSBs need to make their partners look smarter in front of customers.
“How can we provide data to them that tells them what to sell and how to advise their customers that makes their advice more powerful, not just based on their own experience, but based collectively on what we have learned through all the transactions that are taking place? I think that’s what you’re going to find the next two or three years,” he said.
And that movement reflects four different ways in which the advisory channel is growing and evolving.
“No. 1, the number of partners that are selling is growing. No. 2, we’re seeing growth outside of the U.S. in many other countries and continue to get pulled into others. No. 3, the type of product that’s being sold is expanding as well,” Edwards said.
He also noted that the average deal size is increasing, especially as some partners move up into the enterprise.
“Each of those things creates expanding opportunity, but I believe that in order to address those opportunities, you’ve got to retool and meet partners where they are,” he said.
Edwards said the partners who are moving into advanced deals have changed their expectations for TSBs.
“It’s table stakes to just get commissions on time and accurately, to get great support and high responsiveness to get escalations with these providers,” Edwards said.
“The real question partners are asking is, ‘How can you help me be more successful? If not, then you’re just a pass-through entity me, and I don’t really need you. You’re no different than anybody else. How can you help me be more successful?'”
Edwards said a variety of answers will come from the TSDs and their partners in the next two to three years.
One such answer is closer alignment between the subagent and the distributor.
“The TSBs have learned how to offer more value, and the partners in turn recognize that and go to market more with resources from a TSB,” he said.
He said he expects more and more partners to take a “powered-by” approach, in which they to some extent adopt the branding of the TSB.
That’s due in part to the competion channel partners face from large firms like Deloitte and Accenture.
“Partners are battling it out with with big consultancies now on these big engagements. How can you help them look better, whether it’s augmenting their brand or somehow letting them go toe-to-toe with them?’ I think that’s very much a conversation that’s taking place right now,” Edwards said.
Edwards said this process of getting air cover from the distributor will differ.
He pointed to Bridgepointe and its partners as an example of agencies that “tuck neatly under a brand.”
But other partners will want to borrow the Telarus brand only on particular customer engagements.
“And that’s how we see them now pitching to their customers. ‘By the way, I have this whole bench of resources called Telarus, and I bring them to bear, and that is part of my value to you,'” he said.
He added that partners are “actively voting” on how they want the market to develop. And they’re voting with each sale.
“They’re voting on what their preference is of how much they want to invest in their brand and how much they want to lean on the brand of a TSB,” he said.
Pirigyi agreed that adoption of the TSB brand will vary partner by partner.
“Some people are going to really fly the flag, and probably some won’t. I think the visibility factor, as this continues to tighten up, will be a little bit more out-front than it has been in the past.”
Pirigyi noted this week that Telarus and TCG share many vendors with which they are very succesful. For example, both are at the top of the ranks with Comcast and Spectrum.
“I think it will be tough to find a competitor who can deliver an AT&T experience like we’re going to be able to do. Moving forward, I think that it’ll be tougher for a lot of a lot of folks that don’t invest into their back office to keep up,” he said.
Pirigyi said existing suppliers of both companies will appreciate the merger. But he also pointed to growth in the Telarus line card.
“We’re not looking to take our foot off the gas pedal. We’re looking to uncover more partners and produce more business. We’re not slowing down. This is like a freight train, and we’re rolling down the tracks.”
Pirigyi noted this week that Telarus and TCG share many vendors with which they are very succesful. For example, both are at the top of the ranks with Comcast and Spectrum.
“I think it will be tough to find a competitor who can deliver an AT&T experience like we’re going to be able to do. Moving forward, I think that it’ll be tougher for a lot of a lot of folks that don’t invest into their back office to keep up,” he said.
Pirigyi said existing suppliers of both companies will appreciate the merger. But he also pointed to growth in the Telarus line card.
“We’re not looking to take our foot off the gas pedal. We’re looking to uncover more partners and produce more business. We’re not slowing down. This is like a freight train, and we’re rolling down the tracks.”
Proliferating M&A in the technology sourcing channel might point to a future where partners align themselves more closely with their distribution partners.
So said Telarus CEO Adam Edwards when we asked where he sees the market moving in the next few years. Telarus made waves this week with the purchase of TCG. The companies say the deal creates the largest technology solutions brokerage in the world.
In fact, it’s the latest in a series of consolidation involving Telarus and its peers. The number of companies identifying themselves as national TSDs/TSBs in the last three years by some estimates has halved. Now a handful of players, most of them backed by private equity or a larger parent company, are positioning themselves to be the last ones standing.
“I think this is progressing the way that we envisioned,” Edwards told Channel Futures. “There’s going to be a consolidation because there’s going to be a need for value and for resources. The only way to provide that resource is to be a large organization and reinvest.”
Edwards and Dan Pirigyi, who has joined Telarus as senior vice president of strategic partners, shared their vision for the future of the agent channel. Check out our slideshow above to read what they had to say.
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