“The future of the telco channel is bright,” said a Channel Account Manager at a large telco company in a confidential interview with Amplifinity CMO, Trisha Winter this year. But while the future is bright, the channel present is still a little murky. The telecom industry is in the process of adapting their partner model to the looming SaaS marketplace. This is resulting in a large amount of companies pivoting their partner strategies to align with the new on-demand and service model and keep the future shinning promisingly.

“We take part in an event called Channel Partners which is a twice a year telecom channel event,” said the Channel Account Manager. “This event grows bigger every year as more companies embrace the channel and indirect model. Our company is actually behind in some ways, not because we are not trying but because it is harder for the big companies to make the drastic pivots that are needed and that smaller companies can easily maneuver.”

But this Channel Account Manager is not the only one seeing their company having difficulty with this transition. There are a lot of on-premise companies that are being forced to do cloud delivery, but they are finding that their existing partners can’t enable it. In response to this the telecom partner models are being reshaped and different types of relationships are being developed between resellers, agent, master agents, VARs, referral agents and a company.

How are you trying to accommodate the changing partner model?

Recently, the company in question came out with their first SaaS product. This change sets the expectation for other telco companies to follow suit.  Consequently, telco companies’ go-to-market model and channel team will need to change to address how their current channel model does or doesn’t fit with this kind of product.

“That is the big challenge for us,” said the Channel Account Manager. “With the old model you go out and sell these very transactional products. Now we are getting into these consultative and as-a-service products. This requires better sellers and more consultative sales techniques. This will then lead to longer sales cycles. Instead of 30 or 90 days it will more likely be 180 or 360 days. And partners are going have to have a better understanding of the products and technology.”

Trisha Winter, CMO of Amplifinity sees these challenges as the catalyst that has caused many Amplifinity clients to turn to referral partners to continue to grow revenue. “There are a lot more consultants and partner types than there ever has been,” says the Channel Account Manager. The trend toward a consultant and service model requires the sales process to be owned by a company’s direct team but still drive revenue from partners. This is the value of referral partners.

Currently, many agents and master agents are required to undergo an in-depth technology certification to become a partner and have a mature understanding of the CRM in order to be able to generate revenue as a partner. But this Channel Account Manager understands that telco companies can no longer let this be a barrier to generating revenue from the channel. “While we want partners to know the technology if a partner has a good lead we don’t want the technology to be a road block. This is when they will bring us in to close the sale.”

What do you suggest for other telco companies trying to transform their partner model?

“Partner ecosystem is becoming more fluid,” the interviewee points out. “You have to have a way to manage a partner that is there for just one deal and no more. Everything you’ve done before is kind of thrown out the window. This is much different than before when these provider would set up brick and mortar companies with 30 sales reps on the phone. Now you might only have a consultant or agent who can specialize in one particular thing. One day they might work on a deal with you and the next they will have moved onto a deal with someone else.”

This change in the way partner interact is reflective of the switch to a cloud-based sales model. The fact is, a good number of agents will have a hard time transitioning to cloud-based products which not only has a different sales model but a different buyer, especially when selling to businesses. Business buyers of telecom services have pivoted from the long standing IT titles to business leaders due to cloud technology making products and service easier to use. This results in many agents finding they no longer have the customer base to consistently reach target buyers. That is in addition to their struggle to support cloud-based technology. But companies have found that these agents are still valuable contributors who can send targeted leads to the vendor when they see a fit so as to continue to generate revenue. However, unlike the past, partner monogamy won’t be the main source of revenue growth.

“There will have to be an overall cultural shift as well as structural,” says the aforementioned Channel Account Manager. “Whether it’s unified communication-as-a-service or software-as-a-service, this type of a model, while much different than the old one, opens up much more possibilities.”

The overall message from this interview, “The channel is really growing like crazy.” But it is up to each telco business to adapt their partner strategy and technology to take advantage of that growth opportunity.

To continue to help educate your changing partner strategy, download the data report, The State of Business Partner Referral Programs, to see performance benchmarks of companies who have automated their partner referrals for sustainable growth.