Whose Job is it Anyway? Partnering Automation Imperatives for a Cloud World

October 17, 2011 at 7:30 pm Leave a comment

Cary Tengler– Director, Client Services

It would be odd to sign up for wireless phone service and not get a detailed monthly bill, right?

And these days you get on-line bill-pay, web chat and customer service options as well. You’re also able to view your voice, data, and text rates, usage and activity in excruciating detail. All of that information, however, comes not from Apple, Google or Nokia, but from your service provider – the wireless carrier. AT&T or Verizon or Sprint is your service provider, so that’s where you expect the “service.”

But in the world of Cloud and SaaS computing solutions, where do channel partners go for support? IT VARs have historically worked with their vendors and distributors, while agents have worked with carriers, CLECs, and other voice and data providers. The increasing adoption of Cloud-based services is causing IT vendors and service providers alike to rethink the role and investment requirements of partner automation, communication, and collaboration tools.

Effective partner automation systems can – and should – be a competitive differentiator for both vendors and their service provider partners. With any new service, the challenge lies in identifying the key functions and attributes required of such a system. For example, Cloud services are sold both direct and through multiple channels (agent/referral, resale, and white label) and many Cloud providers offer all of these go-to-market options. And their systems must support the partner engagement that goes along with all of the options.

The inherently multi-vendor nature of Cloud solutions adds further complexity, as IT VARs, seeking to maintain or improve their vendor program status, want to ensure they get appropriate revenue credit, MDF, and rebates for selling or influencing, e.g, a Cisco- or NetApp-based Cloud service.

Partner automation systems for Cloud services are a growing challenge and, more and more, it appears that the large service providers are viewed as critical players in solving the puzzle.

In a recent channel research project conducted by Amazon Consulting, 70% of IT vendors now consider the large telecom service providers as highly strategic partners, whereas in the past, they’ve been treated primarily as a direct customer. These vendors already see most of the leading service providers building and expanding their own channel programs and in many cases are supporting the carriers’ efforts with program support and marketing and sales development funds. In return, the IT vendors are looking to access the service providers’ end-users and existing partners and, as importantly, to leverage the back office, billing, provisioning, support and contract management systems so important in delivering Cloud services.

This automation deficit shifts the focus even more to the service providers, who, ironically, often have limited partnering DNA and systems support beyond the basic program offerings of agent fees and wholesale discounting. Several companies, however, are making the requisite investments to turn this industry shortfall into a strategic and competitive advantage.

Terremark, a Verizon Company and service provider, has recently invested in an automation system to help its channel partners successfully sell and manage the recurring monthly contracts. Jim Livingston, SVP Channels & Alliances at Terremark, identified his critical priorities for his company’s partner automation investment.

“Many of the partnering requirements we see are similar to other product vendors, such as content management and deal registration. Where we start to differentiate is in sales management activities like pricing and quoting, and then the management of recurring revenue. Selling a service can be more complex as it requires a very structured, yet flexible legal process to execute scopes of work (SOWs) for each sale. Additionally, we need to provide our solution providers with an easy way to manage their book of business with us – including customer and resource reporting. We are also in the process of building a billing function to help solution providers manage monthly invoicing to the end-user.” Livingston admits he wants relatively little involvement from his leading IT suppliers (Cisco, NetApp, HP) for partner recruitment. He wants a quality vs. quantity approach to building his channel and avoids the mass recruitment momentum these large product companies could affect.

While not technically a service provider, Telarus, Inc., has created an industry-leading partner automation system. Telarus, a national master agent which holds contracts with 40 leading commercial telecommunication carriers, consolidate the sales volume of more than 450 independent agents and make the lives of both the carriers and the agents easier with their proprietary software automation system. Telarus Vice President of Marketing, Patrick Oborn, compares their system to that of Expedia.

“Our sales agents put in requirements and we are able to match their needs in terms of price, commissions and geographic availability of product. Our system started with a CRM/contact management function for quoting and sourcing, and a commission module followed to get agents paid correctly from the carrier. Next came inventory management to provide details behind the carrier service including all emergency info in the event of an outage, and then we added training and marketing functionality. One of the recent things we added to our system is the ability to tie into Salesforce.com’s CRM application. This is helping us migrate agents who are partial residents in our system to increase engagement with us.”

If the national and global service providers are going to differentiate themselves as the new wholesalers of Cloud services and overcome their perception as partnering novices, they will need to expand their current automation systems to keep both their IT vendor stakeholders and new downstream channel partners happy. Key areas for investment include:

 Flexible transactional models allowing solution providers to vary their engagement model (agent, reseller, whitelabler) from deal to deal, or at least end-user to end-user

 The ability to offer tightly executed promotional campaigns for various combinations of services (e.g.VPN +VOIP + a SaaS application) through their channel partners or to test the configuration and price-point of new B2B services before general availability

 The ability to quickly onboard new partners with streamlined on-line sales and technical tools and accessible, low-cost training

 API-level support that enables communication and linkage with other Cloud ecosystem partners, including IT vendors like Cisco, HP, NetApp, and IBM and even potentially distributors like Ingram Micro, Tech Data and Synnex

The increasing important role being played by the service providers creates an inherent risk for the IT vendor community. In turning over the “automation” reins to the service provider for partner engagement, enablement and ongoing relationship management, the IT vendors can be disenfranchised from the end-user and channel partner and in a subordinate position in the overall solutions equation.

Therefore, savvy IT vendors and solution providers will be smart to evaluate service provider partnerships based on criteria that extends beyond the carriers’ current brand strength and service pricing. The mark of a truly “channel centric” organization extends deep into its infrastructure and systems and its ability to support holistic partnering (across sales, marketing, technical and professional services) for the long haul.

Partner automation systems aren’t the end-all to powering a successful partnership. However, if designed and implemented well, they can provide a competitive partnering advantage for service providers; facilitating strong IT vendor ties and encouraging better engagement – and higher sales – from the traditional “on-premise” solution providers.

For more details on Amazon Consulting’s channel research focused on service provider/vendor relationships, click here. For more information on becoming a more partner-centric organization, visit us here.

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