Telarus Accelerates Vendor Onboarding with Gateway Program

TELARUS PARTNER SUMMIT — Tech services distributor Telarus has created a new program to meet rising demand from suppliers to enter its portfolio.

The TSD formed its Gateway Supplier Program with the goal of onboarding providers that have not developed enough of a channel program to meet Telarus' requirements but are demanded by technology advisors or fit an important niche.

Telarus' Joe Radzis

"Advisors expect us to hold the suppliers to a certain standard," Telarus chief financial officer and chief operating officer Joe Radzis told Channel Futures. "As you have new vendors coming in that they may not be familiar, how do you still maintain that standard with existing vendors while incubating a new set to provide them access to new technology? So this is a gateway to getting them to that same level without disrupting the existing category."

The advisor (agent) route to market is growing more familiar to different vendors, and many vendors in advanced technologies such as customer experience (CX), cybersecurity and cloud have sought to use advisors as their sales force. Telarus as well as other TSDs, which predominantly hold the contracts with vendors for the agent model, have traditionally have taken a selective approach to adding vendors. Telarus' regular requirements include a minimum number of channel support personnel, an end-user billing and collections process, and particular rules of engagements. And many vendors haven't scaled to the point of implementing such resources.

Moreover, vendor onboarding is a more resource-intensive than many partners realize, costing time and money for the TSDs. TSDs take pains to avoid bringing on a supplier that isn't ready for channel prime time.

"We get almost 40 applicants a month, and we say no 38-39 times because there are just so many vendors out there that want to come to the channel," Telarus chief commercial officer Richard Murray said.

Telarus' Richard Murray

Members of the Telarus Gateway program won't be broadly available to the entire Telarus partner base, but rather a select set of advisors. Participating partners complete a process where they acknowledge the vendor's resource limitations and essentially earn a certification, Murray said.

"We don't want to launch them nationally. We are now of a size and a volume that we can crush operations of some of these suppliers," he said.

Telarus states that it considers its Gateway program as a bridge for vendors to enter the main supplier program by invitation. They will conduct reviews with Telarus to check on the status of their billings, escalations and active partners. Members pay a $4,800 annual fee, according to the Gateway program's overview document.

Crowded Vendor Landscape

Numerous vendors bearing a ".ai" in their URL have landed in the portfolios of Telarus and other TSDs, but others are knocking on the door as startups explore their routes to market.

"It's very reminiscent of the old [unified communications] days when there were 400 BroadSoft resellers and all the UC people were building things in their garage. In the early days, you didn't know who was going to be good, so we had to sign more of them than we wanted to. And then over time, those 40 or 50 UC providers became 10, and now maybe five are really important," Murray said.

In addition, end-user customers are requesting a wide variety of vendors, some of which don't exist in the TSD portfolio. That leaves the tech advisor in a pinch: Pass on the deal, refer a vendor that isn't an ideal fit, or form a direct agreement with the preferred vendor?

In some cases, partners will choose the latter.

"It's common enough that we're starting to see that trend happen more often," said Taylor Vossler, C3 Technology Advisors' director of operations. "I would say we run into that maybe two to three times in a year."

Direct agreements can prove onerous for tech advisors, who may lack the sales volume to protect them from future agent cuts and lack the negotiating leverage of a TSD. Moreover, advisors who go direct with a new vendor may need to adapt a reseller motion that is unfamiliar to most of them.

Tech advisor TMG recently closed a $212,000 annually reoccurring, three-year security deal that came from a company outside all of the channel. Almost all of TMG's security sales come through direct agreements, vice president of sales and marketing Seth Marsh said. He said the vendors with those deals are often niche players that might not have broad enough demand to earn them a place on the TSD portfolio.

He said it will be interesting to see how Telarus positions Gateway vendors to the advisor community.

"There are so many suppliers coming to channel. How does Telarus get the word out for those suppliers to all of us and keep us focused on that to help them be successful?" he said.

Kameron Olsen advises many new supplier entrants to the TSD portfolio for The Channel Advisors. He said he's looking to see if new technology categories can enter the channel as a result of the Gateway program, including enterprise resource planning (ERP), business process outsourcing (BPO) and point-of-sale (POS) services and platforms. Those additional solutions could help advisors more holistically consult with IT leaders, Olsen said. For example, a category like BPO could help the advisor solve an IT leaders' business problems around labor.

“I believe you’ll see the suppliers in this space double and triple over the next couple of years, because new technologies have got to come up to solve business outcomes," Olsen told Channel Futures.