Telarus Partner Summit: Telarus, Advisors 'Building an Industry'

TELARUS PARTNER SUMMIT — All signs point to business customers preferring the advisor model, Telarus CEO Adam Edwards told partners on Tuesday.

Edwards in a keynote session at the Telarus Partner Summit in Nashville said technology advisors' sales performance and increasing participation in education show that demand is growing for their services. Edwards said a record number of Telarus technology advisors booked more than $100,000 last year.

"I don't mean just $101,000. I mean $200,000, $400,000, $800,000 in bookings in a single year," he said.

The same growth goes for smaller partners.

"We see all cohorts growing. The ones selling $30,000, $50,000, $80,000 — we're seeing those expand. And what that points to is expanded opportunity."

As a technology services distributor (TSD), known in the past as a master agent, Telarus forms a bridge between suppliers and technology advisors. Tech advisors sell technology in an agent route to market, in which the supplier bills the end customer and provides residual commissions to the advisor. A group once styled as an "alternate channel" years ago by vendors and strictly associated with telecom service providers, advisors have ascended past those stereotypes.

"What we're really doing in aggregate is building an industry. Industries form when entrepreneurs take a risk and give something a shot that nobody else will," Edwards told attendees. "And we did that. Twenty years ago, many of you did that. Fifteen years ago, many of you you did that. We matured. But that would never be enough if there wasn't customer demand for it."

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Ultimately, the structure of the advisor channel is driving the demand. Although many business IT leaders still lack awareness of the advisor route to market, Edwards said advisors are proving themselves to prospective clients.

"It's because of the economic alignment with your customer that they continue to come back, because they know you have their best interest in mind," Edwards said. "It is hard to have the first conversation with the CIO and explain who you are and what you do, if they've never seen it before. Once they do, they take you to their next thing and their next thing, and they see that pattern over and over. What that means is there's customer demand; they want what you do."

Austin, Texas-based Select Communications is enjoying its best year yet, according to CEO Jerry Goldman. And half of that new revenue has come from existing customers who want to source more technology through Select.

Select Communications' Jerry Goldman

"We'll find an entry point for a customer with a pain point that's a 'now' pain point, and we do a really good job of taking care of them with that issue. And then post-sale, the same thing. It's just as important make sure that they're getting good customer service. It opens the door for us to sell [another] product," Goldman told Channel Futures.

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Moreover, Edwards said advisors' participation in education with Telarus shows their bullishness for the future. Online participation in education tracks surpassed in-person participation for the first time last year, Edwards said.

"You're placing a bet with your most precious commodity, which is your time, and you're betting on the future. We also see a high correlation with those who engage in education and sales volume," he said.

Telarus sales engineers engaged with advisors more than 5,000 times last year. While many of those engagements occurred as part of education, more than one-half involved the sales engineers helping sell to end customers.

Customer Demand and Capital Investment

Edwards said the presence of of investors like Telarus-backer Columbia Capital scales the amount of education that is going out to customers.

"You each have those experiences on a one-off basis because you have educated [clients], but we can accelerate so much faster, even if you're never going to take on capital," he said. "As the industry consolidates, it means more resources. It means that there are going to be more services available to you, and that's a good thing. Even if you don't sell, capital investment is going to lower interest rates. It's going to educate the market, and it's going to create a better, smoother path for you to success."

Edwards said the Telarus Capital program doubled its number of deals year-over-year. He added that Telarus isn't buying equity in those participating advisors, but rather giving funding that would help firms hire, make M&A or navigate a business transition.

Vendor Education

Educating end-user customers on the advisor model is one thing. Recruiting and teaching suppliers is another. Edwards has called the TSD a "market-maker," meaning that it must set the stage for new vendors and technologies to sell in an agent model.

In the advisor model, the vast majority of vendor agreements run through the TSDs. And that number is increasing as TSDs break ground on advanced technologies like customer experience (CX), cybersecurity and cloud services. TSDs are vetting a cascade of suppliers who are applying to to enter the portfolio, while reaching out to suppliers deemed strategic or demanded by advisors.

"We spend a lot of time doing that. I don't think we get a lot of credit for that activity behind the scenes — a lot of those meetings at Channel Partners [Conference & Expo] and [other conferences]," Edwards told Channel Futures in an interview. "But a lot of it is educating them on best practices, because there's a desire to get in the channel. They know the customers are here. The senior leadership, though, does not understand this channel very well, so we spend a lot of time educating."

Telarus' Richard Murray

Chief commercial officer Richard Murray said Telarus is spending a significant amount of time in front of vendor C-suites as well as channel leadership. Sometimes these are suppliers who already sit in the TSD portfolio but have added a new channel leader. In many cases, vendors have appointed channel executives who have historically worked with systems integrators (SIs) and value-added resellers (VARs). The latter two models function very differently than the advisor model, namely in that they resell technology for margin rather than for a commission and invoice the end user rather than the vendor invoicing the end user.

While those differences may seem minimal on paper, a channel leader who doesn't understand the nuance could wreak havoc on their company's agent route to market.

"In many cases, they got the job because they understand 'the channel.' Well, they don't understand our channel. So they come here and they think they understand it, but there's still that 10% that's different," Murray told Channel Futures. "It feels like I've been on a tour, in some cases even working with our competitor, to take off the Telarus hat and just educate them about the nuances of this channel. How to engage, how to be successful, how to pull the right levers, how not to ruin successful channel programs, because we are attracting big distribution channel leaders into our channel."

SD-WAN provider Adaptiv Networks has historically conducted more of its business through managed service providers (MSPs) than technology advisors, but the company is looking to grow its agent business. Adaptiv first entered the advisor/agent channel through an agreement with TCG, which Telarus acquired in 2022. While that acquisition has now placed Adaptiv in a much larger pool of vendors, CEO Bernard Breton said Telarus' structure has worked well for Adaptiv.

"The combination of Telarus and TCG has really enabled that combined organization to really gain in not only size, but also maturity. I think for a vendor like us, it's quite important. Because the tools are in place. People know what they're supposed to do. While it's a large ecosystem, it feels like a well-defined ecosystem. We know our rules of engagement, we know to expect and not to expect from various actors – from a PDM, from a sales engineer from so on and so forth," Breton told Channel Futures.

Soloists Stay Strong

Many tech advisors are evolving from "solopreneurs" to building out teams. But Telarus' partner awards showed that single-person shops can still thrive.

World Telecom Partners earned the honors of Telarus' top advisor for 2023 based on sales performance. John Jungbluth founded the Milwaukee, Wisconsin-based company 2012 and continues to work on his own.

"We work closely with him as Telarus to help him, but it's all him achieving that success. And I think that stands out as a symbol to you that there is a lot of opportunity," Edwards said.