Q&A: Level 3 Channel Leaders Nigel William and Wayne Dietrich

By Khali Henderson

Following the fall 2010 resignation of Level 3s longtime channel chief, Craig Schlagbaum, Nigel Williams, then senior vice president of enterprise sales, stepped in as interim channel chief of the Business Partner Program. He made the role official in February, adding strategic alliances to his purview and title. The indirect channel and the strategic alliances channel are taking a seat at the most senior table inside of sale and operations within the organization. We are extremely committed and looking to raise the bar in terms of the commitment we have made to the channel historically,” Williams told Channel Partners in mid-April.

As far as day-to-day management, however, Williams was looking for a sales leader to take on the Business Partner Program. Scott Mull, manager of channel operations, who ran the agent channel under Williams after Schlagbaums departure, may have been a logical choice, but he has decided to leave the company, Williams said. So, in April Williams promoted Wayne Dietrich, who ran the carriers strategic alliances program, to also run the day-to-day operations of the indirect sales channel as vice president of indirect channels and strategic alliances. Channel Partners spoke to Williams and Dietrich about their plans for the Business Partner Program. The following is an edited transcript of that interview.

Channel Partners: Have you made any notable changes in the program since becoming the interim chief?

Nigel Williams: The existing channel program that we have is delivering high levels of partner satisfaction. Its a case of really not wanting to make significant changes to the existing program and to keep it operating as it was and delivering the same levels of service. In addition to that, what I really focused on was how to expand the focus of that agent community beyond the midmarkets organization that we had been working with historically to the large enterprise community, with our content organization and across our organization, [as well as] how we can potentially partner with the value added resellers and systems integration partners, so to broaden the scope of the program above and beyond the traditional agents that we have in our program today.

In addition to that we also launched a companywide channel-optimization initiative, which was sponsored by Andrew Crouch, [president of sales], to look at the most effective routes to market for all of our products and services on a global basis. That is a companywide initiative that I am the executive sponsor for; Wayne Dietrich is the team leader. We have been running that for some time to launch a full-scale initiative that everyone in the company buys into.

CP: Has anything come of this initiative that impacts the indirect channel?

Williams: I wouldnt say that it impacts the way that our existing channels do business today. What we are trying to identify is do we need alternative channels to go to market and finding the right channel to market for the right segment and the right technology. We have a number of different sales channels. We have a midmarket sales channel, a large enterprise sales channel, a cable sales channel and a content organization. All have different focuses that could leverage the indirect sales channel community.

CP: Are you looking at teaming in this instance?

Williams: Teaming and expanding the engagement with Level 3 sales force in a more collaborative manner is one of the key initiatives we have been driving forward.

CP: Level 3 has two-tier partner program with four master agencies. Will that continue?

Wayne Dietrich: We are still very focused on MicroCorp, Intelisys, World Telecom Group and TBI. I am not sure that you are aware; we have several thousand subagents that roll up to those masters with the idea of ensuring board coverage and local support. I think the introduction of more VARs and systems integrations may get folded into the overall program as we look to optimize around a program for the right technology to the right customer to the right channel.

CP: Do the VARs have direct relationships with Level 3?

Dietrich: We have about 100 direct relationships, some of which are VARs like Presidio, Simplify and Global Connections.

Williams: Let me give you a high-level strategy that we are looking to take in terms of our indirect channel. A lot of service providers like ourselves create relationships with equipment vendors like Cisco, like Avaya, like Ciena, etc., like EMC, NetApp. Their strategy is to become resellers of that technology and fold that technology into managed services. Our strategy is going to be very different. Our strategy is to partner with the partners of those equipment manufacturers, those key technology vendors. Well create all the right technology certifications; we will become Cisco certified, we will become Avaya certified for unified communications, but we have no intention of reselling that technology ourselves and competing with the channel community, which is what AT&T and Verizon do today as do many other telecom providers.

We believe its a more scalable model and a more attractive model to the channel community to partner with the partners of the leading equipment vendors. By doing that, we can bring to them bundled technology solutions and we will not compete with them in any way. On the contrary, we will actually enable and encourage them to partner with our direct sales force. So if they engage in a situation in a direct enterprise account, our account teams will not compete with them. In fact, they will assist and they will drive joint engagements. We believe that is exactly what the customer is asking for. We think its unique and we think it will be well received.

CP: How much of revenue is coming from the channel?

Williams: At this point in time, if we take our 2009 performance, we are somewhere in the region of 5 percent of our sales revenue flows from the indirect channel. My goal would be at the exit of 2012, that we would be somewhere in the region of 10-15 percent. That is a realistic goal for us. Id like to go higher than that over time. We truly believe that if we get the right engagement model with the channel community we can do that. That is a guiding principle and that is where we would like to take the business in a realistic time frame.

CP: Level 3 announced that it intends to acquire Global Crossing. How do you expect the channel program to benefit or change?

Williams: Clearly, there are certain regulatory issues and compliance issues that restrict what I can say with regard to the acquisition. What I would say is that at Level 3 and clearly at Global Crossing, we are both really excited at the opportunity that the acquisition will bring in terms of the expanded footprint, in terms of the expanding services and solutions that we can take to the enterprise market. In addition to that, the opportunity that that provides for the channel community can only be a significant upside and benefit. At this point in time and until the close, we have to maintain business as usual principles. Thats really as much as I can say at this point in time.

CP: Do you have specific goals for the program?

Williams: The goals that we have clearly are to expand the indirect channel to have an impact across all of our sales segments. We plan to look to increase the type of indirect channel that we have, which could range from online services, different distribution capabilities, value added resellers, systems integrators and traditional agent partners that we have today. We are certainly looking to broaden the scope of the types of channels that we attract because of the non-compete capabilities that we are going to bring to the market.

We also are looking to pre-integrate technology solutions that we can then take to the channel community that has Level 3 bundled into these services For example, bundling our high-speed IP capabilities with firewall and DDOS capabilities and also our CDN capabilities bringing that together as an integrated solutions and offering it directly to our channel community. You will see a lot more integrated solutions hat we will bring to the channel today.

CP: Is this something you are offering presently?

Williams: The WAN optimization is a solution that we will offer to the channel [in second quarter]. We are doing internal launches right now. We are starting to look at partner training. These are individual components that exist today.

CP: What are your key partner-enablement initiatives?

Williams: Partner enablement is a key goal and initiative for us as a company to continue to evolve the ease of doing business with Level 3 as a partner. We fully understand the need to have a fully automated and effective process that can take partners from training to selling to provisioning to billing and to receiving commissions. We want to make that as automated as we possibly can.

CP: Is this in addition to the MasterStream deployment?

Williams: Not necessarily in addition to. That is the core element of the quoting and provisioning. What we are tying to do ahead of that is more online training. We are doing more effective portal management for billing and commissions so that partners not only can quote fast, but to be trained effectively and to be able to have sales support online when they need it, but also to be able to have reporting and tracking of the business they do with Level 3 in a more effective online format.

CP: When will these enhancements be available?

Williams: Work is definitely started certainly on the online portal capabilities. That will be a constant evolution through 2011. This feedback is coming to us directly from our advisory group. We are working with our existing partner community to make the partner experience more seamless. Thats a message weve heard loud and clear.

Dietrich: [In addition], we are doubling the support structure that we have in place today to help manage the quoting and ordering process, further enabling our partners to be successful. We are adding about 30 percent more sales engineers within the channel community. And, to the extent we can, we will leverage some of our inside sales as well where appropriate.

Williams: I think historically, the Level 3 channel program has not really had an inside sales capability that weve really leveraged. I am a firm believer in providing that level of support to the indirect channel so that we can have a more effective way of communicating both inbound and outbound to improve the information flow. We are evaluating at this point in time, what level of investment we need to make in terms of inside sales. I believe it will be significant.

CP: What products do you think will be hot sellers for partners in 2011?

Williams: In terms of products and services, we see the launch of the CBN [Converged Business Network] product that we discussed back in DC. The CBN product will enable cost efficiencies and more optimized solutions for the partners to take to market. Its already out there; we are seeing great traction. We are getting good feedback from the partners around CBN.

We also are seeing an increase in our VPN funnel from our partners. We are really encouraging our partners to move beyond traditional transport and long haul and to focus on VPN and voice solutions. From a voice perspective, its traditional enterprise voice and contact center. The relationships that weve created in the contact center environment with partners like Vail [Systems] and USAN [Inc.], which we have sold directly, we will make available to our partner community. We are trying to drive portfolio diversity to the partner community and trying to move them to CBN, VPN and voice solutions.

The other area is [cloud]. Clearly we have a lot of relationship with the providers of cloud services today. And, thats one of the areas that I think we need to work with the partners on how they partner with Level 3 to provide platform as a service themselves, or if they are resellers of applications as a service or software as a service today, probably a deeper discussion on the cloud strategy. But we fully believe that cloud services need an integrated SLA between the application and the platform and the network that underlies the delivery of that service. Thats a big area that the partners, if they choose to, could really play in delivering services to that space.

If you take any software as a service, the enterprise community is clearly looking to have access to those services, but when they gain access, they are looking for public and private access to those services. Where they are having private access, the SLA needs to include both the application performance and the network performance before it can be a true end-to-end SLA. We are focused on that and the technology alliance with our providers. When we do that the route to market for those integrated application and network will be through our channel.

CP: What are the biggest challenges/opportunities for partners in 2011?

Williams: I think the big opportunity for the channel partners in 2011 is really to partner with a telecom provider that has the scale and resources of Level 3 but is not going to compete with them. That would be the first one. Secondly, I would say its around the area of cloud services. The ability to leverage the scale of the Level 3 network and the SLAs we can provide and the relationships that we are creating with cloud service providers that will allow the channel community to offer those services to the enterprise. [In addition], Level 3 will be creating technology alliances and pre-integrated and tested bundled solutions that we intend to deliver through the channel community.

On the challenges side, I think moving from traditional telecom services to embrace the delivery of cloud services, the more complex VPN and voice services that we can offer, the traditional telecom agents certainly the majority of them have shied away from. I think the real challenge is that we are going to be driving partners to broaden their portfolios. In order to do that this is an additional challenge is the ability to deliver enhanced project management and professional services capabilities. Thats a real challenge and the partners that embrace that and can deliver project management and professional services for more advanced solutions that also include cloud services will be the partners that are successful through 2011 and beyond.