Channel Partners Strike It Rich with Opportunity in Vegas

Las Vegas was the perfect backdrop for the Channel Partners Conference & Expo - an event that attracted more than 2,500 channel partners and vendors looking to beat unknown odds offered up by a consolidating industry.

Throngs of dealmakers, incentives and even cold, hard cash were on hand at the expo floor. Long-distance reseller ATI, for example, filled a vault with $10,000 in small bills and gave two winners - selected in a random drawing - 15 seconds each to collect the cash. Julie Hobson walked away with $900. And less than an hour later, Adam Sugarman was $700 richer.

Other attendees looking to get rich the traditional way had only to look to the variety of players and offers available on the show floor. Changes in government rules and technology were evident in the exhibition as well as the sessions during the three-day event.

As of early March, competitive local phone companies using the UNEplatform could not add new customers under new rules issued by the FCC. Many carriers are scrambling to strike commercial agreements with the regional phone companies to access the local networks or migrate to Internet phone service to support consumers and small businesses - many of which are sold and serviced using outside sales channels.

Some companies, such as exhibitors Cleartel Communications and InfoHighway Communications, still are investigating whether to provide VoIP. InfoHighway still is seeking to reach accords with the Bells to access their local networks while examining alternative technologies. “There’s no need for us to rush into anything at this point,” said Peter Karoczkai, senior vice president of sales and marketing with InfoHighway.

Stephen Roberts, senior vice president of sales and marketing with Cleartel, said he believes agents will find a way to earn “competitive compensation” through new products.

One company offering such new products for agents is ComTech 21, a telecommunications reseller, which displayed a Wi-Fi phone and other equipment. ComTech 21 introduced a Wi- Fi phone a few months ago to enable calls on a wireless LAN, symbolizing the rapid movement in the communications industry to unify voice and data networks.

Michael Agli, director of business development with ComTech 21, said he was pleased with the number of sales reps stopping by the booth. “I’m getting more confirmation we’ve got a lot to offer,” he said.

Meanwhile, Monday’s general session, VoIP Sales Extravaganza, drew a large crowd of curious partners hoping to learn more about the exploding IP industry. “Are you ever in the right place at the right time,” quipped J. Sherman Henderson III, president and CEO of Lightyear Network Solutions LLC.

The panel was moderated by John Macario, president of Bostonbased Savatar, a technology consulting firm. Savatar’s most recent project was demand-side research on SMB adoption of VoIP services. Rounding out the panel were Paul Arena, chairman and CEO of i2 Telecom, and John Musci, CEO of Trapeze Communications LLC.

When Henderson spoke at last fall’s Channel Partners Conference & Expo in Chicago and asked how many salespeople used VoIP technology, only a few raised their hands. On Monday, he asked the question again, and a fair majority of audience members raised their hands, prompting panelists to reiterate that partners cannot sell VoIP effectively without using it themselves.

Another way VoIP will be sold more easily is if it contains standard POTS features such as 911 and directory assistance, said Musci, as well as advanced features. It also has to work better than cellular and as easily as landlines, he said. “First and foremost, people want to save money, then they want the features,” he noted.

Macario posed questions to the panelists before turning the general session over to audience questions. Among the topics at hand: the drop in VoIP prices and what the panelists’ companies are doing in response; competition from cable companies; and SMBs’ awareness of VoIP. Savatar recently concluded a survey of 200 SMBs in which the firm found that nearly 75 percent of SMB owners had never heard of VoIP. The remaining 25 percent who knew about VoIP identified Vonage Holdings Corp. as the most well-known provider. “There seems to be a huge educational issue here,” Macario said.

Among the most educated demographic is the youth market, who, Henderson pointed out, soon will be among the VoIP targets. “There’s a tremendous number of younger people coming into this business …because who drives the Internet? Who is on the Internet all the time?” he said.

The tone of the session was summed up by Musci, who said, “Get on board selling VoIP - do it.”

Concurrent education sessions followed with three simultaneous tracks catering to partners’ various needs and interests.

Scott Levy, director of channel sales for Telecom Solution Center, opened Track One with his view into the buyer’s world. Levy’s familiar refrain rang fresh yet again as he worked to give agents “a toolkit to take into the community.” “We have to take a genuine interest in the customer,” he emphasized. “When we listen, we learn - the more you listen, the quicker you’re going to learn what’s going on in the client’s world.”

Levy reiterated to partners that their products and services no longer sell themselves - “You are the vessel to the client,” he said — especially in a rough-and- tumble world where VoIP is taking center stage. To compete, partners must take time to build relationships that go far beyond the sale, Levy said. “Because you earn more is why you ought to learn more,” he noted.

Stacey McCormick, director of sales for master agency World Telecom Group, followed Levy’s presentation with her take on customer profiling and prospecting. She urged partners to recreate themselves, because successful selling is “not just about understanding technology but communicating and understanding customers’ needs.”

McCormick showed partners how to draw money from different segments of business, including the consumer, service industries, industrial and non-commercial markets. Building a prospect list - which eventually should lead to the right decisionmaker - starts by identifying prospects and adding important qualifying criteria for each, she said.

She then took the audience through the process of how to produce the quickest results via upselling and taking part in local business networking opportunities such as participating in the local chamber of commerce, which she termed “a phenomenal resource.”

Orrin Broberg and Jay Bradley then took up the truncated Track One sessions. Broberg, a consultant for Net Intent LLC, showed partners how to get past the gatekeeper. Bradley, vice president of marketing and business development for master agency Intelisys, stepped in next with, “You’re In! Now What!” His presentation gave agents and other partners tips on how to navigate their way to the right buyers.

Meanwhile, next door to Track One, panelists for the first installment of Track Two discussed hot opportunities in voice over Wi-Fi and cellular.

Peter Manley, principle advisory developer for ClearOne CommunicationsInc., noted that Wi-Fi has a limited range, but said WiMAX could expand significantly the coverage area of a wireless high-speed network. He said that businesses with employees who often are away from their desks could cut down significantly on cell phone costs by using Wi-Fi to make calls within the company’s walls.

Telecommunications equipment makers such as Motorola Inc. have introduced Wi- Fi phones tailored for enterprise customers. Some of the panelists indicated the devices used at public places like coffee shops and airport lounges would be released to the market later.

Scott Ruck, business development manager for Proxim Corp., said there are questions remaining related to how the business models for Wi-Fi over voice would work at a public venue such as a Starbucks. He cited billing issues as one challenge.

Wi-Fi phones also could be introduced for home use, speakers noted.

Manley predicted cellular carriers would deploy Wi-Fi networks within metropolitan areas because it would cut network costs, but said it could take several years for wireless operators to migrate to these networks. Three more panelists followed the initial presentation with a discussion on “Beyond the Cell Phone.” That session featured Jerry Bland, regional director for Sprint Corp., Robert Goble, president of Venicom Inc., and Mitch McCoy, senior director of marketing for American Wireless.

All the while, partners were flocking to Track Three, which was dedicated solely to VoIP. Speakers on Monday started the series off right by focusing on IP PBXs and LAN telephony. Those presentations featured Peter Brockman, vice president of marketing for 3Com Corp. and Robert Patlan, agent support/network analyst for VoiceSmart Networks.

Tuesday morning’s general session, Selling Convergent CPE, featured two panelists who have long been in the CPE industry and whose companies bring partners into the fold so they do not have to invest in infrastructure.

Alan Borck, president of ARC Communications Ltd., and Robert Messer, president and CEO of ABP International Inc., each addressed key issues surrounding the challenge of going from network and voice-only selling to a holistic approach.

“The customer is looking for somebody to provide expertise … and consultative sales,” said Borck. Users want one complete, packaged solution from one source, he said.

Education is key, both Borck and Messer emphasized. Because the industry has changed so much, partners have to evolve along with it in order to make money.

Moderator Khali Henderson, PHONE+ group editor, asked Messer and Borck to discuss how partners make money from selling convergent CPE. Borck said the answer is in the recurring revenue stream from maintenance contracts. He also said convergent CPE solutions “have decent margins.”

Messer noted other value propositions depend on a customer’s demographics - whether a partner can ably serve spreadout offices and locations - and also on the “personal character of every reseller.” “When the reseller knows his customer, he also understands [the customer’s] business,” he said, explaining how partners help companies reduce costs by knowing when to recommend certain investments, such as installing multiple IP PBXs or adjusting IP trunking during peak call times.

Getting into the business of selling convergent CPE entails its own unique challenges. Borck said partners have to know voice and data technologies. Going it alone also requires “significant investment, which is why partnering is a good option,” he explained. He added it also is a challenge for anyone with a nationwide footprint to ensure they provide thorough service to users.

“There are good companies in all parts of the country … and the idea is to network,” he said.

Messer added it also is crucial to take part in manufacturers’ certification and training programs.

The appeal of partnering with companies selling convergent CPE, then, is that “it’s the easy way to enter the market … there’s no infrastructure investment,” Borck said. Plus, he said, partnering leads to closed deals that make money for both companies involved.

After the general sessions, the morning panels ran the gamut of topics from more selling strategies to capitalizing on security sales to hawking hosted IP telephony.

During Day Two’s Sales Track, speakers included Tim Basa of Telegration Inc., who showed agents how to create good presentations. Using his trademark humor and style, Basa reminded agents to show users the “What’s In It for Me” factor, and - using indie breakout Napolean Dynamite as an example - instructed partners not to be wimps. “Stand and deliver,” he said. “Get away from the podium, and out from behind the presenter table.”

Wayne Thomas, president of consulting firm Thomas & Company, also took agents through the steps of navigating the RFP process, leading up to his theme: how to avoid being the designated loser. Thomas explained how partners can avoid being shopped by vendors and companies that probably already have a winning bidder in mind. “As a rule,” he noted, “you are wellpositioned in a deal if you are in a consultative mode and helping to shape the buying process.”

Meanwhile, part of Track Two: Hot Opportunities, featuring Anthony Daley and Ken Mercer, taught partners how to capitalize on the hot security trend. Daley is senior vice president and general manager of Westcon Group; Mercer is senior vice president of Telecom Brokerage Inc.

Track Three panelists continued their focus on VoIP with the days most-attended session on hosted IP PBX. Pete Sandrev, president of enterprise services for Broadvox and Tim Gaines, vice president of field sales for Covad Communications, were among the featured speakers.