Telarus Dishes on Why IT Buyers and Vendors Work With Tech Advisors

Increasing complexity and market confusion for IT buyers could be opening more doors for technology advisors (TAs).

The 2024-2025 Telarus Tech Trends Report takes a deep dive in the mindset of IT decisionmakers and how they perceive tech advisors. Moreover, it showed the appetite – particularly in the mid-market – of businesses to use a TA to evaluate their purchasing decisions and roadmap. A whopping 92% of mid-market respondents said they are interested in meeting new technology advisors. A smaller amount of enterprise respondents (32%) indicated interest, but the report indicated a year-over-year rise in interest from enterprises. While 18% of enterprise respondents in 2023 said they were unlikely to use a tech advisor for any of their purchasing decisions, that number dropped to 8% in 2024.

Source: 2024-2025 Telarus Tech Trends Report

The survey of 400 IT professionals, which Constellation Research and Redpoint conducted, showed that a lack of confidence in their own technology expertise often motivates IT decisionmakers to work with the channel. Mid-market and enterprise buyers were most likely to turn to a tech advisor when the buyer was dealing with a tech category they had less expertise in.

Source: 2024-2025 Telarus Tech Trends Report

But there's an interesting catch. Although IT buyers turned to advisors when lacking tech expertise, they did not list technological expertise as the top attribute for a tech advisor. Having broad technological expertise was the fourth most common reason, and having deep, specific technological knowledge was the fifth most common reason. The top reason was that the tech advisor offers "unique expertise/value."

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

Asked about the key issues motivating their IT purchasing, 53% of respondents said AI adoption and 42% cited cybersecurity. The third most cited reason, cost-cutting (29%) shifted dramatically year-over-year from 6%. Constellation Research CEO Ray Wang connected this number to AI adoption, suggesting that businesses are looking for ways to afford to pay for future investments AI and other next-gen technologies.

Telarus CEO Edwards and vice president of corporate marketing Rachelle Lara sat down virtually with Channel Futures to talk about key trends from 2024 and their insights on the advisor channel. The transcript has been edited for length and clarity.

Channel Futures: What were some of the biggest surprises that came out of the Tech Trends Report?

Adam Edwards: I was not surprised that when we split it out between mid-enterprise and enterprise, that there was much more demand in mid-enterprise. That's been our belief, and the survey confirmed that. While cost-savings was not a signal in our research last year, it really spiked up as a key factor shaping IT buyers' purchasing choices. But not at the expense of key transformational projects.

Related:Telarus CEO Adam Edwards: Margin, Resources 'Not an Either Or' for Partners

Rachelle Lara: This idea of cross-cutting to fund innovation. There's lots of future investments and reallocating for AI, which ultimately will help your organization become more productive and efficient. But really looking at those big digital transformation projects and knowing that they're going to have to allocate those dollars to stay is probably behind that for the good part of those response. We knew the number of mid-market companies needing tech advisory was going to be a big number, but the result was huge. For the enterprise buyers, one in three are very interested and needing that advisory to navigate those complex buying decisions. So it's nothing to ignore, but that opportunity in the mid-market is such a high signal this year.

CF: And even though mid-market seemed to have the higher appetite, it seemed like enterprise jumped up year-over-year. Do you see anything about those enterprises that are becoming more willing to work with a TA?

AE: I think it's just an evolution. The pattern I continue to see is that an advisor will work with a CIO. They get something done. It works well. That advisor is there if things go wrong. And then the CIO comes back to them, and then that CIO changes jobs, and they bring that advisor in again. That's the pattern we're seeing, and that's why we know the model works. Because they don't just do it once; they do it over and over. This started in SMB and it evolved to mid-market. My belief on the enterprise side is – number one – not enough of them have been exposed to advisors yet. But number two – what I also believe is the case is mid-enterprise has fewer resources to lean on. I will see our advisors go toe-to-toe with an Accenture or a Deloitte in some of these engagements. And many times they win, but sometimes they don't. I believe part of that is because it feels safer to go with a bigger shop right now. It feels safer to pay a large consulting fee and then show the board, 'Hey, this decision was vetted. It wasn't my fault.' It may not be as simplistic as that, but I see some of that behavior.

Related:How Telarus Partners Are Winning in Enterprise, Cross-Selling

CF: Then there's this really interesting comparison that the enterprise was more likely than the mid-market to go to an advisor when it didn't have an existing supplier relationship, and then the other hand, the mid-market is more likely when they have a compliance need to rely on the TA. Do either of those stand out to you?

AE: The enterprises have a compliance team. They've invested in a robust compliance team that gets reported out to the board, that has authority within the organization. Most mid-markets do not, so they're going to lean on a third-party. They're going to look for people to fill that role.

CF: The Tech Trends Report references Gartner saying that IT services are on the rise. How do you view the relationship between tech advisors and managed IT services?

AE: I would view a managed service someone who puts a management layer around something like Microsoft. Microsoft the easiest one that I've referenced before. You're gonna buy licenses through me [the MSP]. They're Microsoft licenses – you know what they are. You can buy them from anyone else, but I'm the person you call when something goes wrong. I will add your new employees. I will stop the license and payment of your reduced employees. That I view as a managed service or a managed layer. We also lean on scaled managed service providers like a Quest or Thrive, and they bundle together. Another one I was just talking to is Palo Alto. Palo Alto prefers to sell through a reseller. There is a management layer around Palo Alto, and we sell that. When I look at the advisor role, I see more of a consultant.

CF: What you mentioned about Palo Alto is really interesting. There's another large IT vendor we both know that officially joined the TSD world a few years ago. But there are also many VARs and MSPs working with this vendor that happen to be in your portfolio. Now that vendor intends to focus more efforts on empowering those folks in their engagements with TSDs/TAs. I'm curious how the TSDS are finding suppliers relationships with the partners in that management layer for other large hardware/software vendors.

AE: I think it's a smart play for them to say, 'Look, we're not going to try to sell direct through the channel,' because their classic play is to hand off to a VAR who goes and implements and then manages it. It's the same with Palo Alto. They're an equipment company, or at least a legacy equipment company, that wants to sell to a reseller who is then going to put a management layer around it. I think of our channel as more consulting- and sales-oriented. We're going to bring in that third party. We don't really care about the logo and if it says 'Palo Alto.' It can say something else, as long as that person is going to provide a great experience and make Palo Alto do back flips. That's all we care about. Because what we've seen over and over is, the advisor doesn't lean on the company's logo necessarily. They lean on their own reputation. The reason they're selling is because they are trusted by that person.

In fact, when AT&T they purchased ACC Business, ACC was just reselling the AT&T network, and AT&T could not believe all the people that bought ACC and not AT&T. What further baffled them is, when they researched that population and found that those customers never even considered purchasing AT&T, which was highly offensive to them. What they found was these people were relying on the advisor. That's who they trusted to make a good decision. It wasn't based on some outward-facing marketing or some logo. It was the trust. And again, that's why you see us not caring that whether there’s the Palo Alto logo. We don't care. If we can find a partner who's going to implement it and service it well, and we can look our customer in the eye and say, 'We did the best for you and they agree,' then that's going to give us the next deal and the next deal and the next deal. That's really what matters.

CF: How has it been in your conversations with people outside of this advisory channel? Any anecdotes this year from getting in front of some of those big brands and letting them know what this space is? Have you been encouraged by that?

AE: I'd say it's a total mix. And by the way, it has been for 20 years (explaining what we do and who we are). Fortunately, I think the level of professionalism has picked up, the volume of sales has picked up and the complexity of product being sold has increased. There's a level of credibility now there wasn't before. I still think it's far from where it's going to be, but those conversations are easier. We still find that there are misconceptions about this channel within these organizations, even organizations we're partnered with, where we have to spend effort educating them, making them aware of who we are and why the margins look different. They get really confused by the fact that if I sell something to a VAR for $1 and record the dollar as revenue, that var is going to sell it for $1.20, and they're going to have their own economics, but the provider is very concerned when they sell it for $1.20 and pay 20% to an agent. Then now I only have $1 left, and all of a sudden I've got this 20-cent expense. They say, 'Guys, 20 cents is really expensive. Why are you charging me 20 cents?' It doesn't fit their perspective of their typical go-to-market motion, which is either direct sales or the resale channel.

We try to get them to reorient and think through that, and also understand that these are incremental sales. It's not just about the economics that you've got to understand. It's also that this is how customers want to buy, so you've got to participate. So we find more and more people knocking on our door wanting to participate. I would say there's a different conversation of getting them on board, and another conversation, when the dollars start to get very large: 'Hey, why are we paying so much?' We have to go sit with them and say, 'Well, let's talk about all the revenue we delivered.' It is a different way of looking at this financial model that I think takes time to absorb and build into their financial models.

I think I heard it best from a supplier who switched from resell to go pure advisory channel. He said, "Look, there are three reasons. When I go out to market through a reseller, I can't control my price. When I go through advisor, I control my price. I set the price of the market. My problem going through a reseller is, whoever prices it the lowest is going to win the business. That means they're cratering my ability on the direct sales side to sell the price I want to. Second, the lowest bidder is probably going to deliver a pretty poor experience. Because they underbid it, so they're going to under-resource it, and now my brand is hurt. The third reason is, I am one person removed from that customer relationship, which means I cannot be as responsive in tooling my software, in incrementing it and advancing it. But with an advisor, I get all those things. I get price control, I get experience control, and I'm able to have a direct relationship with the customer, which means I can improve my product and my experience."

CF: Where do you see new partners are coming from? I hear about lots of new types of companies signing agent agreements with you. Where are you telling your channel managers to go look for people?

AE: There are multiple methods. I'd say our digital marketing team has been a bright, shiny light. We did not have that two years ago, and we see the traction we've got from digital marketing. So it's really broad campaigns that are going out to pull in interest and get people to sign up. The other methods are direct recruiting on our sales team or referral from suppliers, and I would say the highest to convert into a producing advisor are the referrals from the suppliers, because they've already passed the first test. They've knocked on the supplier's front door and said, 'Hey, I want to sell your service. I've got a deal in hand.' There is a referral there because the supplier wants us to train them up and get more than just that one sale out of them, and they know we have an environment where you can incubate those partners to get the best odds of success. But in terms of your question, when you're saying, 'Hey, where are these people coming from?' I would say, everywhere. We are seeing more VARs. We're seeing more MSPs. We see the ancillary company that used to sell copiers, and then they were selling digital copiers, and now they're technologists. We've seen commercial real estate folks. But the ones who have real traction are the ones who focus on it full-time. The ones where it's an ancillary part of their business, unless they've budgeted for it like some of these large VARs and have dedicated people whose livelihood is dependent on it, we're not going to see a lot of traction. We're going to see traction from people who are very serious about it and invest their time and attention in it.

Historically, that came from a lot of the telco sales reps. Currently, we're seeing a lot of UCaaS former reps, because they've had some downsizing, and some very good reps have been let go. We have the opportunity to train these folks up into be sellers. But that's really the litmus test we want to see. For someone that has the tenacity and the commitment to doing something, we can help them. What we found time and time again over many years of doing this is, those who dabble are not going to get it done. It doesn't matter how smart they are. It doesn't matter how big their network of contacts is, their prestige, or what their ancillary business is. If they're not going to focus on it, they're not going to be successful.

CF: When these partners are building their business from the ground up, how does Telarus think about getting that agency to tie very closely with you from the beginning? I've been asking around to see if TSDs are going to become more and more programmatic and packaged in the offers they have for agency startups.

AE: we tried so many things, whether it was building their website or consulting on their LinkedIn profile, providing leads for them – doing all the things they asked to do. We did not see that correlate to success. In fact, we saw it correlate to dependency, and people didn't flourish. We've tried business-in-a-box multiple times.

What we found correlates is, they must first bring an opportunity, and we can help them be successful and show them success quickly. That gets the flywheel turning. That is the number one indicator of success is if they're going to transact early. Number one, it proves they have intent. Number two, it proves they have access to a deal source. And number three, they get the feeling of success, that this is real and they can make money doing this. Then we can get the flywheel moving. But all the other things we've tried of, 'Hey, maybe we can build you a franchise, give you a website, lay some leads at your front door' – all those things we thought would work just haven't. With some of the things we've tried, sometimes I feel like our timing was off and maybe we need to try them again, but that's where we are today. When we see initiative, and we see that momentum, we want to help with that, and then we can pour more resources in. But we've learned to pull back on our resources. If someone's not going to lean in, we cannot afford to peanut butter-spread our resources around, because it's just not effective.

CF: Is there anything else that stood out to you from the study?

RL: The increased need for advisory relates to more IT leaders diving into and wanting to grow and expand in these emerging technologies. Whether you're in enterprise or mid-market, and whether you're or a veteran CIO or a brand new, 21-year-old, CIO, you just can't keep pace with the change. Especially in AI. There's growing interest and investment in AI, and yet they need help navigating it all.

And then there's the tech advisors who we surveyed as part of this research as well, and they're also mirroring some of this. 'Yep, we foresee AI being a big part of our solutions set.' In the next one to two years, most of them definitely are going to invest in it. They just are scratching the surface right now. And that's a blurry line, right? It's going to cross over into cyber, cloud, CX. AI is being implemented in these solutions without people even knowing it, so it's just going to keep becoming a louder and louder signal.