Windstream Bankruptcy: Partner Dialogue Changes

Amid its bankruptcy, Windstream‘s focus on UCaaS and SD-WAN have created new opportunities and sales for partners.

Windstream’s Curt Allen

That’s according to Curt Allen, Windstream Enterprise’s president of strategic channels. It’s now been nearly seven months since Windstream filed for Chapter 11 bankruptcy.

The company hasn’t yet indicated when it expects to emerge from Chapter 11, but last month said it “continues to work expeditiously to emerge from restructuring with the best possible terms for the company and its stakeholders.”

Back in April, Windstream initiated plans to cut 15% of its partners while increasing commissions for the remaining partners for selling strategic products. Its partner program previously included 31 standard agreements and the bankruptcy court said that was too much. So Windstream consolidated all of its partners onto a single agreement.

Last month, a bankruptcy judge approved motions by creditor groups to take part in Windstream’s mediation talks with Uniti Group. Windstream wants to recharacterize its relationship with Uniti from a lease to a financing. Windstream pays Uniti about $650 million annually to use Uniti’s network.

During this week’s Channel Partners Evolution, we caught up with Allen to get the latest on how the Chapter 11 process is impacting partners.

Channel Partners: What’s the status of all the changes that were discussed in April regarding Windstream’s partner program?

Curt Allen: The changes discussed in April have been implemented as planned. So far we have seen an increase in engagement, activity and new logo sales across our partner program.

CP: How have the changes impacted Windstream’s channel? How are partners performing?

CA: The changes we implemented enabled us to reinvest in our partner program. One of those reinvestments was a new 5% additional residual incentive. This reinvestment, incentive and focus on our SD-WAN and UCaaS solutions have created meaningful increases in pipeline and sales, including a $163,000 monthly recurring revenue (MRR) Avaya UC deal we closed recently with a sub of a master we have been experiencing substantial growth with. Since April we have expanded SD-WAN to include Fortinet. Having Fortinet and Velo options provides greater flexibility for partners. We have added Avaya IP Office to our UCaaS portfolio and expanded functionality to our OfficeSuite UC service. Our Office Suite UC solution recently earned its place on the 2019 Gartner Magic Quadrant for our ability to execute and completeness of vision. We are pleased to offer this solution to our customers to help them be more efficient.

CP: Has the dialogue with partners regarding the bankruptcy changed? Are they now more focused on when Windstream is going to emerge?

CA: Yes, initially they had questions about what it would mean for them short and long term. We have been proactive in our communications throughout the process and they have been appreciative of the transparency and updates. Partners are naturally curious about when we will emerge, but are more focused on how we come together to win business. Our partner conversations are laser-focused on where we can be successful together. We are…

…seeing an increase in SD-WAN, UCaaS and security opportunities concentrated in retail, hospitality, health care and finance. These are right in our sweet spot.

CP: In the meantime, what’s new in terms of opportunities for partners? How do those opportunities fit into Windstream’s vision?

CA:  We have initiated a channel integration initiative with our indirect and direct channels, called Project Harmony, that has enabled both groups to close deals that would likely not have closed for either without the program. The essence of Project Harmony is teaming up direct account executives, channel managers and partners, bringing more resources and relationships to the opportunity. We are seeing great success in terms of new logo opportunities in our sweet spot. We have already closed a $42,000 MRR OfficeSuite UC deal through this approach and have a growing pipeline for SD-WAN, UCaaS and security solutions.

CP: Have UCaaS and SD-WAN moved to the forefront in terms of Windstream and its partners? Have those sales increased, replacing legacy technologies offered by partners?

CA: SD-WAN, UCaaS and security solutions have been the driving force of our strategy for the past three years. We installed our first SD-WAN customer in January of 2017 and have experienced continued momentum. SD-WAN installs have consistently increased quarter over quarter, with 43% year-over-year growth. We are seeing significant demand from our customer base to move off of older technologies to SD-WAN and UC solutions.