Verizon sees European partners moving to an agency model as the channel becomes more dominant as a supply model. Janet Schijns, Vice President Global Channels says the change to digital is a big challenge for customers. “Long gone are days when customers would go to different partners for different products. All this has to come together for a customers' digital futures.” Verizon is watching the move closely and working with partners on digital transformation.
“We are saying that we are heavily invested in the transformation working, but also that we want the customers (partners) brand in the limelight. Partners need to be the contact point and build Verizon into their portfolio.”
For example, a company with a couple of hundred users is doing a lot in the cloud and watching videos of cats -so the bandwidth requirement is big and may overload existing systems. So the customer calls a partner, saying there is a network problem and partners are realising that large clouds on small networks don't work - they can't just get a telco to put a bigger pipe in.”
It is seeing a radial consolidation in the channel a “smashing together of partners all over Europe” as the transformation needs wider skill-sets. And the core channel is smaller due to owners leaving and consolidation.
With NFV for the first time, it is all about software defined prioritising and provisioning - bringing bandwidth up and down. Here, the solutions providers are becoming the preferred choice for customers to get their networks. Solution providers are the new preferred channel, she says.
And for areas of demand outside a partners' main expertise, she predicts a rise in the agency model. “If all you want to do it sell services, then there is an agency model paying 10-20% commission - and they get to use the brand and with the same access to resources and training. Those providers with a full suite of products that want to integrate Verizon and use their own brand now get to buy without having to go through the wholesale model. So here again we give double digit discounts.”
Unlike in the US, the European model is not so keen on agents, but that will change. “So the first thing is a fair programme, localised. The business model is that we don't tell tell partner to work in a particular way. Vendors can't dictate that any more.”
“So in that the Verizon strategy is that we have to have a tiered and trusted programme that offers training and marketing development. Also, since training is so important we don't charge for it. And there has to be acknowledgement of skills. So partners with Cisco, Avaya or other accreditations can come in at the right level in the Verizon programme. We will grandfather you in and not require you to start over. And we take all their certifications.”
Chris Dickson, Executive Client Partner, Channels has been brought in to help drive the local coverage and localisation. “Local sensitivity is important, and we know US models don't always work in Europe. We have taken the best elements and know what works in individual countries,” he says. “The different ways to market gives us a flexible model. We know the agency model is not big in Europe. And this is not a landgrab – let us find partners that build and extend on what we do.”
There are some markets where partners can be the main service provider to a customer. “We are recruiting – 40 partners in the programme now and it shows good signs – acquiring incremental customers and expanding the footprint. We are winning new business, it is the local delivery that matters.”
“The agency model is a good carrot – and the easiest way to understand a market.” The real value is that partners don't have to be one thing or another – perhaps being a lead in some areas and an agent in others such as security. It is an easy way to start as well, he says.
There are other pressures on channels. Janet Schijns warns: “Some 75% of channel partners will retire in the next few years – I see more people selling digital channels online using SDN, including new businesses who will move in and do well. We are seeing a strong move to e-commerce for millennial businesses wanting to buy online. With a lot of digital businesses, it means this is an interesting time. And this is where the agent model is picking up again.”
Now it is viable for channel to take commission in those areas without expertise. There are some differences between US and Europe, but trends are similar, she says. Partners have to be better at knitting coverage together in Europe where there are national comms players and national channel players are needed for billing, taxation, compliance – it is more complex here. “But a common frame of reference is the move away from selling point solutions and products - partners are rapidly changing to saying that they supply a particular market or vertical,” she says. Partners are doing more in the vertical markets and SDN with networks driven by the apps. “We have a wholesale practice and we are also seeing telcos wanting to be resellers – we've had early interest and we are going after them.”
All this means that there will be even more business done through channels in the next few years – customers will look for channels rather than vendors. “We are getting lots of partners saying their customers have told them to go talk to Verizon and to work with it.”
Customers will nominate their preferred partners in vertical and countries. “Two things are resonating for Verizon– we are a huge IP provider and have every platform – the other thing is security. And we can see breaches before they hit customers because we run the networks. The partners can bring Verizon to the table to talk about security and what resolution can be offered in hours not weeks. This is a big value and as we talk to partners, the fact that we provide the network is important and matters in their customer discussions.”