Who is Cutting Commissions?

“Dialpad is reducing their commission rates on all new services by 2%. 

Effective April 13, 2023, Dialpad will be reducing their commission payout by two percent on all new customers sold.  Existing customers with add-on/upgrade or renewal services will remain at the current commission rate. Any current opportunities in the funnel that do not close prior to April 13th will be compensated at the new reduced rate.”

Apparently, Dialpad heard RingCentral cut commissions 1% and said, “Hold my beer!”

UCaaS sales have declined since the pandemic. On-premise PBX sales have held steady. Not everyone wants to go cloud for everything.

There has been a SPIFF war raging since 2020. Now it is apparent that at least two UCaaS providers don’t value their channel partners. UCaaS sales were already slowing down, this won’t help these two. There are over two thousand cloud communications providers in the US. Partners will just switch to another one.

In the thick of this, NEC decides to pay commissions upfront if the partner elects. What does that say about Dialpad and RingCentral? In my 20+ years in the channel, carriers have changed compensation plans – and that sounds like what Dialpad did – and a couple stopped paying commissions when they killed their channel. Every agent that has been at this for 15+ years has a story of a vendor who took food out of their mouth. This to me is about more than just the commission cut. It speaks to where the channel is now and where it is going.


In my opinion, this is the first domino in the era of the Big TSB. Partners sign on with a TSB for one primary purpose: collect commissions. When the TSB fails at that, what does a partner really need a TSB for? All the fancy tools and words don’t amount to much when my revenue declines.

One thing with the TSB is that partners never get to see the vendor contract. We have no idea what it says or how solid it is. We have to take that in faith. Well, now we know.

This 1-2% commission hit is really a 4-6% revenue hit for both the partner and the TSB. (1-2% off of 20-25%).  In this era of PE-backed TSBs, they just lost top-line revenue, which makes it even harder to pay back the PE investors.  MDF’s are being distributed differently in 2023 and now commissions are being cut. This is a big red flag.

If the TSBs don’t push back on this, what is there to stop every vendor from cutting commissions?

And because the partner doesn’t have a direct agreement, the partner would have to sue the TSB not the vendor for any dispute.

Bigger was supposed to mean safer due to the larger bat to swing. Instead Bigger created little choice for the partners. It also created a few brokers who can be swayed by the vendors, since they owe so much and can’t rock the boat.

A few vendors have said that they like having just a few TSBs.

Well, in my own experience, the TSBs can’t get out of their own way to do their jobs.

They automate just like AT&T – and look how that works for customers?! Who is the customer of the TSB? The Partner!

They count on a portal to handle as much as possible. In one case, they change the portal constantly; links are dead; and the very idea of UX (user design) is as foreign to them as letting me see the vendor contract.

At a time when the channel is looking for new blood, cutting commissions randomly (with no pushback) won’t be a recruiting tool.

UCaaS was already a money loser – for the vendor and for the partner. Unless the partner charged for assessment, professional services, install, etc., the 20% commission on a $20 seat just isn’t worth the headache. Far easier to sell network, regular voice and other things.

With UCaaS providers mixing CCaaS with UC and CPaaS, it becomes a Solution Sale. Now the sales cycle lengthens. Now the seat price may breach $50 but the knowledge and sales skills have increased as well. I think that CX will end up being sold by specialist agencies for the most part.

My buddy, Jeff Ponts of Datatel, makes a good point that much of the UCaaS being sold is sold via a white label platform. Skyswitch is a perfect example. 750 MSPs who bill their own branded VoIP service to 700K seats. There are new white label providers popping up every week. Intermedia is embracing this approach via their CORE program. NEC also has a similar program for partners. This serves the SMB space very well – and that isn’t a space that the UC Players want to be in anyways. They have dreams of being Avaya.

There are partners who say these are great times to be a Partner. I think those partners don’t worry about the many changes happening to the Channel – the PE money, the M&A, the commission cuts. They plug along and help their customers and don’t pay attention to the system that provides them with the revenue. That’s okay until it isn’t.


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