Channel Convergence Debate Offers Up Fireworks

(Pictured above: TBI’s Corey Cohen (center) moderates as panel members (left to right) TQI’s Michael Bremmer, Pax8’s Andrew Pryfogle, Datto’s Rob Rae and Rad-Info’s Peter Radizeski debate channel convergence.)

CHANNEL PARTNERS EVOLUTION — To say IT/telco channel convergence is a hot topic would be an understatement.

Convergence was the subject of a lively debate Tuesday at Channel Partners Evolution in Washington, D.C. And judging by the audience’s response, convergence isn’t happening anytime soon.

On the “yes” team were Michael Bremmer, CEO of TQI, and Andrew Pryfogle, Pax8‘s chief market development officer. And on the “no” team were Rob Rae, Datto‘s vice president of business development, and Peter Radizeski, Rad-Info‘s president and founder. Corey Cohen, TBI‘s vice president of marketing moderated.

Bremmer said convergence is definitely happening as agents are evolving their conversation from how much they can save their customers to asking them about desired business outcomes. And all of the deals he’s done in the past year involved very little telco and instead focused on solving problems.

“When I think about convergence, the focus is on the end customers,” Pryfogle said. “They don’t wake up thinking I have this tech issue … they wake up and think who do I trust who can solve this for me. What’s converging is the type of partners, the lines are blurring between labels, with MSPs playing more of an agent role, and agents playing more of an MSP role. The convergence is happening, and accelerating.”

However, Rae said convergence is like a unicorn: It doesn’t exist. All efforts to push convergence in the industry have “amounted to nothing,” he said.

“It’s like teaching a cat to walk on its hind legs — it’s not going to happen,” he said.

MSPs are the first to get called, and who bill every month and provide 24/7 support, Rae said. He doesn’t see an MSP relationship in traditional telecom.

The MSPAlliance has been trying to convert VARs into MSPs and has drawn very little interest, Radizeski said.

“I know two master agents that became MSPs in the past year and there was an enormous capex,” he said. “We’re not going to see that much convergence of people moving from one model to another.”

MSPs are mostly focused on SMB, while agents have been making strategic moves to bigger deals, Pryfogle said. And those larger customers still need a trusted adviser, and are going to agents and asking for their help with solving problems, he said.

“The labels don’t matter anymore,” he said.

Both channels are evolving, but they’re actually moving further apart, Rae said. And telecom agents are trying to find business because they’re losing business to MSPs, he said.

“Not one MSP you find is worried that an agent will take business from them,” he said. “The end user wants one throat to choke, that single phone number I can call, one guy I can touch, feel and choke if things are wrong. The touch of what an MSP offers today … they are there to help them with everything … and that includes, as time goes on, telecom.”

Agents may be selling more MSP stuff, “but you’re not becoming MSPs,” Radizeski said.

“Whether they buy from an MSP or me, what’s the difference?” Bremmer said.

The future is “incredibly bright” for MSPs and agents if they stay relevant in their conversations with customers, Pryfogle said.

“If they continue to focus on what end customers want and provide holistic solutions, that’s convergence,” he said.