Channel Convergence

How to accelerate growth using Agents and Managed service providers

 

 

CJ17.  This episode features Craig Schlagbaum, Vice President of Indirect Channels for the business solutions side of Comcast. Craig is an industry veteran and decorated channel chief. He shares why the telecom agent model has been so successful, but why MSPs are vital to his channel growth. And Craig tells how the agent and MSP worlds are colliding in a channel convergence. Along the way you’ll learn Craig’s secrets to success with tips you can leverage to take your channel business and your channel career to the next level.

KEY TAKEAWAYS

  • Under the Telco partner model, Agents and MSPs get the benefit of residual commissions for life of a customer from an asset-less income stream; they don’t own asset or pay debt on it. Many SaaS companies are replicating this model.
  • The Master Agent is a distributor of services. They provide credit to their agents who can’t wait for residual stream in the form of an advance on commissions.
  • The key difference between the telco partner program and traditional ISV partner program is the financial model. Both channels look see ease of doing business, from quote to cash, as top priority.
  • Most of Craig’s partners are not interested in the reseller model where the partner bills the customer. Craig says they’ve proven wrong the idea that you must bill the customer to own the customer. Agents control the customer even though Comcast bills the customer directly.
  • Craig sees a channel convergence of the Agent and MSP business models. He says MSPs could end up with 3 revenue streams;
    1. Revenue from services they bill on their own paper for a service that they created,
    2. Residual commissions for services from other providers, and
    3. Revenue from the heavy lifting of integration and support services.
  • Comcast’s secret sauce is how much emphasis they put on ease of doing business and sales operations. Craig calls this focus on Partner Experience PX19. Under PX19, they track key metrics including sales per month, churn rates, how long it takes Comcast to get partners a quote, get their customers installed, and get commissions paid.

SHOW NOTES

The AGent Model
[4:00] Telco companies traditionally sold directly so they don’t have the channel participation rates you see with many IT vendors like Cisco and Microsoft. But Comcast’s partner business is in the double digits and growing at more than 20% per year.

[5:45] Comcast has thousands of partners. Most, around 80%, are agents, acting like independent insurance agents or financial brokers. But fastest growing segment are MSPs who control end-to-end network and software and get benefit of residual income for life of customers.

[8:00] MSPs get benefit of residual income for life of customer from an asset-less income stream; they don’t own asset or pay debt on it.

[10:00] The Master Agent is a distributor of services. Provide credit to their agents who can’t wait for residual stream in the form of an advance on commissions.

Channel Convergence
[10:00] The telco agent financial model with a residual commission is a blueprint that is being used by SaaS companies.

[13:00] Telcos and SaaS firms are both looking to MSPs who can offer solution consisting of multiple providers and offer greater level of service to their customers.

[16:00] The more the telcos offerings move up market from commodity voice to complex data services like SDN, the more MSPs and VARs will need to be involved to support customers, driving more channel convergence.

[17:00] Key differences in telco partner program is the financial model. Main thing his channel looks for is ease of doing business from quote to cash, no different that ISV partners. Provide online tools for partners to see what customers are doing with the products.

The Secret Sauce
[18:00] Comcast’s secret sauce is how much emphasis they put on ease of doing business and sales operations.

[19:00] Key partner metrics he tracks are sales per month, churn rates, how long it takes Comcast to get partner’s a quote, get their customers installed, and get commissions paid.

[21:00] Has both a field and an inside channel team of about 40 people supporting thousands of partners, supported by sales engineers and specialized SDN team, and an ops team that support the master agents and distributors.

[23:00] Envisions a portion of the 100,000+ MSPs moving to selling telco services. Some MSPs are getting their in a more clandestine way. MSPs partner with agents under their own agreed to terms. MSPs could end up with 3 revenue streams; revenue from services they built, revenue from residual commissions for services from other providers, and revenue from the heavy lifting of integration services.

[25:00] Barriers to entry that VARs used to face doesn’t exist for the millennial world today.  You don’t have to put up any cash to start representing hundreds of services with residual commissions.

[28:00] Most of his partners are not interested in the reseller model where partner bills the customer. Craig says they’ve proven wrong the idea that you must bill the customer to own the customer.  Agents control the customer even though the billing is done by Comcast.

[31:30] Secrets to Craig’s success is always putting the partner first, seeing the partner as the customer, and improving the partner experience. Logs over 100,000 miles per year on getting out to see partners.

[34:00] It took 2 or 3 years to get executives fully on board with channel strategy. It took Craig acting as a chief culture officer to get their support. You have to be patient, but over time the channel will win out.

[38:30] Craig got into the channel business because his father was in it. His dad helped start the channel at IBM in the early 1980s.

RESOURCES

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