partnering trends between telecom and it channels — 2013

COMMUNICATIONS

IT

TELECOM

™

March 2013 S P E C I A L R E P O R T

Partnering Trends BetweenTelecom and IT Channels – 2013

By Carolyn April, Director of Industry Analysis, CompTIA, and Khali Henderson, Editor-in-Chief, Channel Partners

Table of Contents

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Overview ..............................................................................3

Agent-VAR Partnerships Today .................................................4

Number of Partnerships

Types of Partnerships

Compensation Models

Value of Partnerships

Drivers Behind Partnerships

Factors Influencing Agent-VAR Partnerships

Impact of Emerging Trends and New Business Models

Success Factors and Priorities for Agent-VAR Partnerships ..........13

Factors Influencing Success

Expectations and Priorities

The Future of Agent-VAR Partnerships ......................................16

Intentions to Partner

Factors Influencing the Success of Partnerships Going Forward

Conclusion ..........................................................................19

About .................................................................................20

The Research

The Authors

CompTIA

Channel Partners

Partnering Trends Between Telecom and IT Channels — 2013 2 Channel Partners, channelpartnersonline.com • CompTIA, comptia.org


Overview

Partnering between IT VARs and telecom services agents continues to grow

more commonplace in the industry. The relationships also are maturing as both

groups have begun to move beyond opportunistic handshake deals, which

easily fray, to a more formalized, accountable approach to the relationships. Evidence

of this can be seen in the uptick of joint selling and marketing among a percentage

of these two industry players, a distinct shift from what have been loosely coupled

arrangements based on referrals.

In order to continue tracking the convergence of these markets, Channel Partners

and CompTIA teamed up for the third time to conduct an in-depth study exploring

the nature and health of these IT VAR and telecom agent partnerships. In separate

online surveys to 100 IT VARs (a mix of resellers, solution providers, managed services

providers, etc.) and 100 telecom agents (master agents, subagents and consultants),

the study covers a range of topics from revenue generation, partnership structure,

satisfaction levels, partnering drivers and success factors, and the impact of external

developments in the industry such as the cloud computing model.

Clearly, the convergence of IT and telecom technologies as well as decision-making

at the point of the customer has been a factor in driving these partnerships as agents

and VARs seek to provide an end-to-end solution, encompassing both telecom and IT,

thus capturing a greater amount of customer wallet share.

32%TelecomServices

68%IT Hardware,Software &Services

Components of U.S. Telecom & IT Market

The ongoing convergence of the “traditional” IT and telecom services sectors willbring new opportunities for partnering, but also challenges for those ill-prepared.

Source: IDC

Emerging trends such as cloud also are a strong force driving the two parties together.

Ninety percent of VARs and 70 percent of agents said emerging delivery models such

as cloud and managed services have had a positive impact on their partnerships.

More findings such as these can be found in the following report sections, including

additional year-on-year trend comparisons that help illuminate the patterns developing

as these partnerships grow more common and entrenched.


Agent-VAR Partnerships TodayNumber of Partnerships

As in the previous years’ surveys, the overwhelming majority of agents and VARs

responding to the 2013 survey said they have at least one partnership. VARs reported

more exclusive relationships with agents than vice versa, while agents tended to have

more partnerships of equal importance.

Specifically, nearly all of the agent respondents said they currently have at least one

partnership with a VAR. Three in 10 said they had one primary partner with other

secondary partners. More than half (58 percent) of respondents said they had multiple

partnerships of equal relevance.

Eight in 10 VARs report having had at least one partnership with either a master

agent or subagent in the last year, up from seven in 10 that did so in 2012. The increase

comes mainly in the number of partnerships VARs have across multiple subagents

as opposed to casting their lot with a single subagent partner. It’s less common

for VARs to work with multiple master agents (just 16 percent did), which makes

sense since master agents represent a wide swath of telecom service providers and

carriers, opening access to a range of services the VAR partner might be seeking to sell

or implement.

While few agents (less than one in 10) have no partners, one in four VARs do not.

Why not? For the most part it comes down to a genuine lack of interest or a case of not

having tried. Most VARs (80 percent) that said they are not involved in a telecom agent

relationship cited those two reasons. Network and telecom convergence, along with

cloud, are driving many of these partnerships, and so for VARs not living in the worlds

of unified communications or related technologies, the agent partnership might seem

an odd fit. However, as businesses continue to shift toward the cloud and recurring

revenue models, and customers seek a single source for IT and telecom services, more

VARs and agents are likely to at least consider these relationships. One good reason?

The need to fill in skills gaps, which is found to be a primary driver to partnering.

Multiple partnersof equal relevance

One partner, othersecondary partners

None

One partner

Number of Partnerships Between Agents and VARs

Agent partnerships with VARs

VAR partnerships with master agents

VARs partnerships with agents/subagents

58%

25%

16%

7%

20%

24%

33%

31%

28%

3%

24%

32%

Source: Channel Partners and CompTIA Agent-VAR Partnering Survey, January 2013


Types of PartnershipsA common refrain in this year’s data is the growing formalization of VAR-agent

partnerships, which suggests that the success of these relationships lies with close

understanding of one another’s business model, clear and regular communication,

and set rules of engagement for things like account ownership, sales strategy and

compensation/revenue models — all of which are discussed in detail later in this report.

So, let’s take a look at the many ways that agents and VARs engage with one another.

One of the most common is to swap leads with no reciprocal compensation. This is

done both formally and informally. The 2013 survey showed that at least among VAR

respondents there is a move toward more formalized partnerships compared to 2012.

9% 18%

18% 18%

26%

9% 5%

Informally swap leads for services, with no reciprocal pay or agreements

Formally swap leads under agreement

Lead Swapping Between Agents and VARs

VARs

Agents

6%

2013

2012

2013

2012

Source: Channel Partners and CompTIA Agent-VAR Partnering Survey, January 2012 and January 2013

Further evidence of the formalization and deepening of agent-VAR partnerships is

in the reported increase in joint marketing and selling. Specifically, VARs said joint

marketing more than doubled year over year, from 4 percent to 10 percent; agents

reported insignificant activity and no increase year over year. However, agents reported

a nearly double increase in joint selling — from 10 percent to 18 percent — though

VARs noted a marked decline in what was already limited activity.

10% 1%

1%18%

Joint Selling & Marketing Between Agents and VARs

2%

9% 10%

Joint marketing under a formal agreement

Joint selling under a formal agreement

VARs

Agents

2013

2012

18%2013

2012



As in last year’s survey, the most common type of partnership involved VARs selling

carrier services through an agent. As telecom services become more entwined with

the type of network infrastructure deployments that are the bread and butter of many

VARs, offering telecom services as part of an end-to-end offer makes increasing sense.

Agents typically pay VARs in one of two ways — a referral fee on a closed sale or

a recurring commission as a subagent. Interestingly, two in five agents said they pay

VARs commissions while less than one in five VARs said the same. One in 10 agents

said they pay VARs a referral fee while one in five VARs said they received a referral fee.

These numbers did not change noticeably year over year.

14%

17%

How Agents Pay VARs

18%

24% 10%

Agent pays recurring commission to VAR under subagent agreement

Agents pay a referral fee for closed leads

VARs

Agents

2013

2012

10%

40%

43%

2013

2012


Very few partnerships between agents and VARs involved the agent selling for the

VAR. In the rare situations that it does occur, the compensation is reportedly balanced

between referral fees and a percentage of the total deal.

4%

7%

How VARs Pay Agents

4%

6% 3%

VAR pays our agency a referral fee for closed leads

VAR gives agent a cut of total deal sold to agent’s customer

VARs

Agents

2013

2012

3%

4%

5%

2013

2012



Compensation ModelsThere appears to be some settling in around compensation models this year that

also might reflect a growing understanding of one another’s business. For example,

42 percent of IT VARs describe their compensation structure from agents this year as

coming in the form of upfront revenue, which is up from just 28 percent last year.

Agents tend to seek out a recurring revenue model, which is in line with how they

sell telecom services and renewals, but IT VARs are still mainly steeped in transactional

product- and project-based revenue — though many are in transition today to recurring

revenue. The fact that the agents are compensating IT VARs more in line with how they

typically get paid in the IT world suggests that a better understanding of the business

models of their partners, which is singled out as a major determinant to success.

Value of PartnershipsPartnering is all about generating revenue and profit — whether that’s by expanding

offerings to existing customers or acquiring new clients based on a broader portfolio

of skills. VARs and agents are no different. Both agents and VARs continue to derive

significant value from their partnerships, with an ever greater share of revenue

attributable to these relationships.

Two in five agents said their partnerships with VARs/dealers accounted for less than

25 percent of their revenue in the last 12 months, but this was a decrease from last

year when more than half said the same. More agents said revenue from partnerships

has shifted to the 25-49 percent range.

VARs also saw a slight shift in the share of revenue from partnerships, with more

reporting 75-99 percent. A majority of VARs — two in five — still report that 50-74

percent of their revenue comes from partnerships with agents.

Percentage of Revenue from Agent-VAR Partnerships in the Last 12 Months

VARs

Agents

4%

5%100%

1%

0%

20132012

12% 10%

18% 11%75%-99%

45% 12%

43% 13%

50%-74%

21% 30%

25% 25%25%-49%

12% 42%

14% 52%Less than 25%


Percentage of Revenue from Agent-VAR Partnerships in the Last 12 Months


It’s important to note that these high percentages for revenue reflect the entirety of

any deal. For example, if a telecom agent brings an IT VAR partner into a telecom sale

to provide the network implementation or hardware solutions, the referral fee is likely

the only “real” money that exchanges hands and can be considered a direct result of

the partnership. But it’s all about the door-opening opportunity. The follow-on work

the IT VAR does with this customer is where the real dollars are made — a situation not

likely possible had the agent not pulled the IT firm on board in the first place.

While a significant portion of their revenue comes from partnerships, a majority of

agents and VARs still view these relationships as “tactical,” or opportunistic based on

the needs of specific customers. That said, a significant number — 37 percent of VARs

and 30 percent of agents — say these relationships are “strategic,” or key to their

portfolio offerings.

Strategic (key to my portfolio)

Tactical (opportunistic based on a specifi c

customer need)

Referral

How VARs and Agents Characterize Their Partnerships

Agents

VARs

30%

37%

63%

58%

8%

5%


Broadly speaking, VARs and agents are quite happy with the results of these

partnerships in the last year. Eighty-five percent of VARs and 76 percent of agents are

“satisfied” or “highly satisfied” with their partnerships. Almost none were dissatisfied,

and very few — one in four agents and one in eight VARs — were neutral on the point.

Highly satisfi ed

Satisfi ed

Dissatisfi ed

Neutral

Satisfaction With Partnerships in the Last 12 Months

Agents

VARs

26%

24%

0%

1%

50%

61%

24%

13%

Highly dissatisfi ed0%

0%

85% of VARs and 76% of agents are satisfi ed with their

partnerships



Drivers Behind PartnershipsWe have mentioned some of the key drivers behind the decision to partner, including

the momentum around emerging technology and business models such as cloud

computing, along with the need to expand skill sets in order to compete against a

widening field of players across IT, telecom and other industries such as audio/visual

and physical security.

In this study, we assessed demand drivers for two different categories: partnering to

sell core services and partnering to sell emerging services and technologies.

For VARs, nearly every possible reason to partner with agents increased in frequency,

across both core and emerging services areas. As seen in the chart below, the majority

of these partnering drivers are financial in nature — either a means to drive sales or

to save money on activities such as training. Adding complementary, non-strategic

skills to the business through partnering is far less expensive than in-house training in

many cases.

Nearly universally (91 percent) of VARs say emerging trends, such as cloud and

managed services, have affected the status of their partnerships with agents favorably;

none said they have done so negatively. This is an interesting finding given that

anecdotally there has been a level of conjecture and apprehension that the emergence

of cloud solution providers paves the path for VARs to compete more effectively,

rather than partner with agents. And yet, 62 percent of VARs report that the emerging

business models and technologies have resulted in new partnership opportunities with

agents, while half say they are winning more deals and driving more revenue with

agents in these areas. Meantime, echoing the theme of more structured partnerships

this year, nearly three in 10 said emerging technologies and business models actually

are leading to agent partnerships that are more formalized in nature.

Core Services Emerging Services

79% Gain access to new customers

63% Create new revenue streams

62% Fulfi ll existing customer demand

60% Help fi ll in gaps in skill sets

54% Save money on training






VAR Drivers Behind Partnering Decisions

2013 Response Trend from 2012 2013 Response Trend from 2012



As with VARs, the primary drivers behind agents’ decisions to partner for core

services is to increase sales, specifically gaining access to new customers (81 percent),

serving existing customers (73 percent) or creating new revenue streams (72 percent).

The softer benefits — filling in skills gaps and saving money on training — also got very

high marks with more than two-thirds counting those as motivators.

For emerging services, the driver to partner shifted slightly with more agents

looking to create new revenue streams. More than three-fourths of agents also are

concerned about meeting customer needs for these new services and filling skills gaps

by partnering with VARs that they believe have an understanding of the customer

environment needed to effectively delivery IT and telephony services that previous lived

beyond the carrier demarcation.

Core Services Emerging Services








77% Help fi ll gaps in skill sets



Agents Drivers Behind Partnering Decisions

2013 Response Trend from 2012 2013 Response Trend from 2012


Factors Influencing Agent-VAR PartnershipsLooking a little deeper, the survey explored factors influencing channel partners’

decisions to partner with one company over another; the results were very similar year

over year for both agents and VARs.

Nine in 10 agents (89 percent) said the partners’ reputation was a “major” factor,

topping the list for the third year. Rounding out the top five major factors influencing

their decisions to partner is the quality of the VAR’s products and services (81 percent);

the VAR’s’ pre-, post- and joint sales support (74 percent); the VAR’s technical support

(67 percent); and lastly the agent’s personal relationship with the VAR (56 percent).

Interestingly, these factors were quite different from 2012 when the VAR’s technical

skills, financial health and understanding of the agent business model were most

highly valued. Perhaps this is a further indication that these partnerships are moving

past the introductory level to a more trusted, collaborative stage.


VARs’ No. 1 factor in deciding to partner with an agent changed this year from

product quality to technical support, which was mentioned by 52 percent of VARs as a

“major” factor. Product quality moved to No. 3 and was tied with partner’s reputation

with 49 percent. The No. 2 factor was the agent’s understanding of the VAR’s business

model (50 percent). Rounding out the top five was the agents’ commitment to the

VAR’s profitability and growth (48 percent). All of these were in the top five in 2012

as well.

The increased emphasis on working with a partner that provides solid technical

support is likely due to the prevalence of more sophisticated and complex product

sets and solutions, including cloud services and multisite WAN networks that support

cloud. Many VARs are getting up to speed in these areas and partnering with a telecom

agent that has existing technical acumen only speeds the ramp time.

Rank

1

2

3

4

5

VARs Agents

Partner’s technical support (52%)

Partner’s understanding of my business model (50%)

(TIE) Quality of the partner’s products and services and

Partner’s reputation (49% each)

Partner’s commitment to my profi tability and growth (48%)

Partner’s reputation (89%)

Quality of the partner’s products and services (81%)

Partner’s pre-, post- and joint sales support (74%)

Partner’s technical support (67%)

Personal relationship with the partner (56%)

Top 5 Factors Infl uencing Decisions to Partner


Impact of Emerging Trends and New Business ModelsWhile previous surveys have considered emerging technologies and delivery models

like cloud and managed services, the 2013 survey included a new question that

specifically asked about their impact on partnerships. The reason for the question was

anecdotal information about partnerships struggling as the services agents and VARs

offer become more competitive. As an example, would an agent’s cloud UC offer

compete with a VAR’s premises-based UC offer, creating conflict in the partnership?

While there may be isolated incidences of such conflict, the survey results showed

no tangible evidence of a widespread concern. In fact, it showed the opposite: agents

and VARs say emerging technologies have a “positive” or “very positive” impact on

partnerships. One possible reason for this goes back to the formalization of partnership;

agents and VARs increasingly set the ground rules for engaging with customers and

account control, avoiding potential conflicts. Indeed, 48 percent of agents and 28

percent of VARs said this formalization of agreements was an outcome.


Most agents (66 percent) and VARs (61 percent) said that new partnerships have

arisen from emerging technologies. Further 60 percent of agents and 49 percent of

VARs said more deals were won and more revenue was realized.

One scenario supporting these results is that some VARs are considering cloud-based

alternatives to their core offerings so as to not lose a sale altogether. In some cases

they are working in tandem with their telecom agent partners to deliver those through

a third-party provider. In others, they may in fact be the managed services or cloud

provider that the agent recommends.

The other dynamic at work here is competition from carriers themselves. As cloud

services become more prevalent, carriers such as AT&T and others are in a position to

deliver these solutions effectively — and directly — to customers. One way that telecom

agents and IT VARs can avoid disintermediation of this sort is to join forces to offer

more well-rounded solutions to customers that encompass a variety of technologies

and delivery types.

How Emerging Technologies and New Business Models Have Impacted Partnerships

Very positively

Positively

Negatively

Not at all

Agents

VARs

18%

29%

5%

0%

52%

61%

24%

9%

Very negatively1%

0%

90% of VARs and

70% of agents say

emerging technologies

like cloud have a

positive impact on

partnerships.



Success Factors and Priorities for Agent-VAR PartnershipsFactors Influencing Success

Looking at the factors driving success of agent-VAR partnerships, agent respondents

once again overwhelmingly (73 percent) said that effective communications between

the agent and the VAR/dealer partner was the No. 1 factor. VAR’s pre-, post- and joint

sales support took the No. 2 spot. Leads, last year’s No. 2 factor, took the third spot in

2013. VARs’/dealers’ understanding of the agent business model remained important

with 47 percent citing it as a major factor.

The big change for agents year over year was in the influence of emerging

technologies and business models at No. 4 with 49 percent. This tracks with other data

from the survey that shows that emerging technologies have had a positive impact

on partnerships.

Meanwhile, VARs cited emerging technologies as the No. 2 factor influencing

success of partnerships for the second year in a row. This was tied with formal business

planning with the agent — again a sign of the increasing formalization of partnerships

and performance expectations.

No. 1 on the VARs’ list was the agent’s understanding of the VAR business model.

This tracks with other data in the survey that shows that agents are working

to compensate VARs in an upfront manner that better matches their cash flow

model. Effective communication moved down the list, but remained in the

top five with 44 percent; it was edged out of the No. 4 spot by government

regulation, which did not make an appearance on the 2012 list.

It can’t be underestimated how critical business model understanding

is to the success of these relationships. One of the main reasons that these

partnerships fray and fail is simply by not knowing how each other makes

money, structures their operations and sells to customers. Partners that have

taken the time to educate themselves in these fundamentals are making a

knowledge investment that sets the tone for a more successful partnership. To

get there necessitates effective communication, which agents heavily attribute

to overall success rates in partnership.

It can’t be

underestimated

how critical

business model

understanding is

to the success

of these

relationships.


Rank

1

2

3

4

5

VARs Agents


Formal business planning with partner (48%)

Emerging technologies and business models (48%)

Government regulation and compliance (46%)

Effective communication (44%)



Leads provided by partner (53%)



Top 5 Factors Infl uencing Success of Partnerships in Last 12 Months


Expectations and PrioritiesThe themes of communication and formalized rules of engagement play into the

next set of data. Beginning with the 2012 survey, we sought to evaluate the success

of partnerships more closely, asking new questions about expectations and priorities

around partnerships over the last 12 months. Selecting from a list of 12 priorities, both

partner types indicated a concern over direct competition and the need for ground

rules. In 2013, those same concerns resurfaced about establishing roles and account

ownership. However, both groups also were concerned about the performance of the

partnership through setting sales strategy and/or revenue goals.

Priority

1

2

3

VARs Agents

Setting sales strategy (42%)

Setting sales revenue goals and commitments (33%)

(TIE) Establishing and protecting account ownership. Establishing rules for interfacing with customers (27%)

Establishing pre-and post-sales support roles (51%)

Setting sales strategy (46%)

Establishing and protecting account ownership (40%)

Top 3 Priorities for Partnerships



Thinking about these same 12 elements, partners picked the top three most difficult

to achieve. While their priorities lined up fairly well, agents’ and VARs’ assessment of

the difficulty was very different. Nearly a third of VARs, for example, said assigning

responsibility for bad debt was difficult to achieve while only 5 percent of agents

said the same. On the other side, 25 percent of agents said establishing project

management roles was difficult to achieve while only 4 percent of VARs thought so.

What may be more significant is the low percentages logged for each of these items,

such that none stands out as a major impediment to partnership success.

Priority

1

2

3

VARs Agents

Setting sales strategy (what each partner will sell) (30%)

Assigning responsibility for bad debt/collections (29%)

Establishing exclusivity (28%)

Setting sales revenue goals/commitments (28%)

Establishing rules for interfacing with customers (27%)

Establishing project management roles (25%)

Top 3 Most Diffi cult to Achieve Priorities for Partnerships



The Future of Agent-VAR PartnershipsIntentions to Partner

Looking ahead to the next 12 months, both agents and VARs are bullish about their

partnerships going forward. Specifically, more than four in five agents and two in five

VARs plan to add new partners while four in five agents and one in two VARs plan to

increase business with existing partners. VARs were more likely than agents to expect

no changes; two in five VARs said they would maintain the status quo. One in five

VARs plans to reduce business with existing partners and one in four agents plans

to drop partners. These changes are likely the result of a constant re-evaluation of

the effectiveness of partnerships and an effort to pour resources into the most

productive ones.

This routine evaluation process is not unlike the model that VARs employ when it

comes to their technology vendor partners. Some of the relationships are strategic,

some secondary or tactical, others simply one-off — but none of them is permanently

guaranteed. VARs constantly re-evaluate their vendor relationships on a number of

measures: revenue and opportunity, products, incentives, market trends and how they

are treated. The churn that ensues is only more active now that new models such as

cloud are changing the mix of players that are important to partner with, which is

driving more telecom relationships.

Plan to add new partners

Plan to increase business with

existing partners

Plan to reduce business with

existing partners

Plan to maintain status quo

Agent-VAR Intentions to Partner in the Next 12 Months

Agents

VARs

84%

42%

2%

22%

79%

53%

3%

41%

Plan to drop some partners

24%

7%

Both agents and VARs plan to add

partners or increase business with

existing partners.

Don’t know2%

2%



Not surprisingly, both agents and VARs expected revenue from their partnerships to

increase in the next 12 months. Two in three agents and one in two VARs expect their

revenue to increase significantly or somewhat in 2013. Three in 10 agents and four in

10 VARs expect revenue to stay the same. Few expected revenue declines.

While the majority of VARs (53 percent) expect to see revenue increase over the

coming 12 months from these partnerships, this represents a dip from last year, when

62 percent said they believed sales would jump. The number of agents expecting

increases also decreased year over year from 75 percent in 2012 to 65 percent in 2013.

Rather than see this as a negative, however, there is another possible explanation:

growing trust and familiarity. Consider the number of VARs and agents that expect

revenue from these relationships to remain the same: four in 10 VARs this year

versus three in 10 last year and three in 10 agents compared to two in 10 last year.

Those 10-point bumps in the status quo category might be further evidence that the

partnering relationships are solidifying and that there is trust developing among those

firms that have worked together now for years.

How Partnership Revenue Is Expected to Change in the Next 12 Months

Increase signifi cantly

Increase somewhat

Decrease somewhat

Stay the same

Agents

VARs

30%

17%

4%

4%

35%

36%

29%

43%

Decrease signifi cantly0%

1%

65% of agents and 53% of VARs

expect revenue from partnerships

to increase


Factors Influencing the Success of Partnerships Going Forward

The factors that agents cited as most influencing the success of their future

partnerships are similar to those that they cited last year. Effective communication

between the agent and VAR partner was cited as the most important major factor by

81 percent again this year. Leads provided by the partner, a VAR’s understanding of

the agent business model and compensation remained major factors in the success of

agents’ partnerships in 2013. Pre-, post- and joint sales support snuck into the list in

the No. 2 spot, which was held last year by emerging technologies/business models

at 57 percent. This year, emerging technologies did not make agents’ top five success

factors for 2013 at 44 percent.


Interestingly, VARs put emerging technologies as their No. 1 factor influencing

success of partnerships in the next 12 months with 52 percent citing it as a major

factor. Effective communications moved down to the second spot with 46 percent

citing it as major factor. Compensation models tied effective communications for the

No. 2 spot. Rounding out the top five factors for VARs were sales incentives and agent’s

sales support — each cited as a major factor by 43 percent.

Agent’s understanding of the VAR business model was cited by fewer VARs

(42 percent) in 2013 than in 2012 (46 percent) and 2011 (60 percent), indicating that

agents may be demonstrating a better understanding of how a VAR business runs and

therefore making it less of an impediment to success going forward.

Rank

1

2

3

4

5

VARs Agents


(TIE) Effective communication and Compensation model (46% each)

(TIE) Sales incentives and Partner’s pre-, post- and joint

sales support (43% each)




Leads provided by partner (48%)

Compensation model (47%)

Factors Infl uencing Success of Partnerships in the Next 12 Months



ConclusionThe industry is undergoing significant change that is impacting the channels of both

the IT and telecom worlds. Cloud computing, as just one example of a trend driver, has

sparked new partnerships among unlikely pairs while at the same time inviting new

and different types of competitors to the field.

Every company is trying to get an advantage. One differentiator comes in adding

new skills or capabilities to an existing portfolio, offering more to the customer from

a single source. The VARs and telecom agents in this study have discovered the merits

in aligning in this way. Partnerships of these sorts aren’t always easy, especially when

they are not formalized under a contract, and communications and accountability are

weak. So it’s encouraging that satisfaction levels with the partnerships over the last

year are as high as the data indicate. The data suggest that partnerships have grown

more formalized this past year, with more accountability and structure, two major

factors behind success ultimately. In the years ahead, the roles of IT distributors and

master agents in terms of training and facilitating more partnerships between VARs

and telecom agents is likely to emerge as well.

Looking ahead, the success of these partnerships will likely hinge on many of the

factors cited by the respondents: good communications, an understanding of one

another’s business model and strategies for collectively tapping into emerging models

such as cloud.


AboutThe Research

The CompTIA-Channel Partners Agent-VAR Partnering survey was conducted in

January 2013 based on 2012 performance. There were approximately 100 respondents

of each partner type — agent and VAR — to two separate surveys.

The agent respondents to the 2013 survey were 52 percent independent agents or

subagents and 31 percent master agents. Another 17 percent identified themselves as

“consultants.” As in the 2012 survey most of the respondents were small businesses;

79 percent reported total gross revenue of less than $5 million. Similarly, most

respondents (82 percent) focused on small and medium business customers.

The IT VAR respondents to the 2013 survey included 19 percent MSPs, 19 percent

IT vendors, 14 percent systems integrators and 16 percent retailers and 11 percent

resellers. Most came from smaller businesses: 53 percent with up to $9.9 million

in revenue, with another 31 percent with $10 million to $49.9 million. In a change

from last year, more larger companies were represented; 15 percent of respondents

reported being more than $50 million in annual revenue. Their average customer base

was evenly balanced across small, medium and large clients.

The AuthorsCarolyn April, director of industry analysis for CompTIA, joined the organization in

April 2010 as director of industry analysis after serving as editor for Channel Insider,

a publication focused on news, information and resources for IT resellers and system

integrators. Prior to that, April was a principal analyst for the Institute for the Partner

Education & Development (IPED) and served as executive editor of VAR Business, an

award-winning IT channel print and online publication, and Redmond Magazine,

which covers Microsoft technologies and the Microsoft user ecosystem. She also

worked in editorial positions for InfoWorld and for daily and weekly newspapers

in Massachusetts.

Khali Henderson is editor-in-chief of Channel Partners, a leading media brand in

VIRGO Publishing’s Communications Network. Henderson has more than 20 years of

experience in journalism, covering the communications and IT sectors, including its

technology and channels. She has been contributing to Channel Partners as a reporter,

editor and freelance writer since 1988 and has been its editor-in-chief since 1998.

Henderson’s career also includes seven years in public relations during which time

her client list included the Telecommunications Resellers Association (now COMPTEL).

She has a bachelor’s degree from Arizona State University’s Walter Cronkite School

of Journalism.


CompTIACompTIA is the voice of the world’s information technology (IT) industry. Its members

are the companies at the forefront of innovation and the professionals responsible for

maximizing the benefits organizations receive from their investments in technology.

CompTIA is dedicated to advancing industry growth through its educational programs,

market research, networking events, professional certifications and public policy

advocacy. For more information, visitcomptia.org or follow CompTIA on Twitter at

twitter.com/comptia.

Channel PartnersChannel Partners magazine is the leading publication for telecom and IT distribution

channels. For more than 25 years, Channel Partners has been the undisputed leader

in providing news, analysis and education to the indirect sales channels serving the

business technology and communications industry. In addition, Channel Partners

online (channelpartnersonline.com) delivers a constant content stream of unique and

breaking industry news, feature articles and premium downloadable content. As official

media of the Channel Partners Conference & Expo, (channelpartnersconference.com),

Channel Partners is the market leader that channel professionals turn to first.

http://www.comptia.org

http://www.Twitter.com/comptia

partnering trends between telecom and it channels — 2013

Technology