At the Cavell conference, one CSP executive was very upset at the TSDs. He should be. He knows nothing about the channel. He obviously was under the impression that if he was a Bronze sponsor, the TSD would thrown agents and orders at his company. Yeah, okay!
The Technology Services Distributor (TSD) is a brokerage for vendor contracts. The only thing they distribute is commission checks to partners. They have over 300 suppliers, but only a handful are relevant to most partners. Roughly 85% of the orders are for the top vendors: AT&T, Verizon, Lumen, Cox, Charter, Comcast, WIND/Uniti, Zoom, and RingCentral.
They came to power because AT&T, XO and Level(3) (thanks, Craig!) decided that they only wanted to deal with 10 partner contracts. So they made everyone else go under one of the 10. Instead of cutting 250 checks each month; they cut 10. Then PE came along and POOF! there’s only 4 pure TSDs left.
Every vendor I talk to thinks 2 things: (1) the channel is coin operated; and (2) sales happen fast! Both are very wrong.
AT&T and the other top vendors get most of the deals because Brand and Demand. The channel was designed by Microsoft and Cisco to supply the SMB for the 2 IT titans. MS and Cisco created demand and the channel – VARs mostly – made a business out of selling, installing and maintaining Cisco router and switches and Microsoft products. Ingram and Tech Data stepped in so the vendors didn’t have to sell 1 box at a time and get involved in logistics for 60K VARs! The Distributors handled it. The licensing management, too.
If you have a bone to pick with the TSDs or the Channel, it tells me that you don’t understand the Channel and the partner program you have is struggling.
If the channel didn’t work, the UCaaS vendors wouldn’t bother with it, but 45-55% of sales come in from the channel.
Look at it another way, remember Juniper? They had similar products — some say better — than Cisco, but partners were Cisco certified and knew the product and no one ever got fired buying Cisco or IBM or AT&T. Colleges were training Cisco engineers and MSCE’s. Brand Ambassadors for the two vendors in every organization.
Juniper had a good product; there was demand; but they lacked brand and awareness and ambassadors. You notice today that the MSP community has a number of Brand Ambassadors, because vendors learned from Juniper that just because you build a better mouse trap doesn’t mean it will sell without a lot of marketing.
When a partner approaches a prospect, having a Brand name product to offer that the partner is familiar with makes the sale easier. Reduces Friction!
UCaaS providers did not follow the Mitel-Avaya route to market. Mitel, NEC, and Avaya dealers were authorized and trained – and were loyal! That’s what most vendors are looking for, but that doesn’t happen in a vacuum, signing a bronze level agreement with a TSD. Do you know the number of moving parts involved in creating a dealer network or a successful partner program? Many. We discuss them on The Disconnect podcast every week.
If you aren’t one of the top 10 vendors, then you should really hire me to examine your partner program to see how we can get it off the struggle bus.