- December 14, 2017
- Posted by: Theresa Caragol
- Category: Strategy and Trends
The worlds of Telecom and IT are converging. We see it in our everyday lives as we toggle from email on our laptops to email on our phones. But it’s also happening at the enterprise level, as cloud technologies have begun to infiltrate traditional telecom and core business functionality. This presents a new hurdle as customers are trying to achieve business outcomes such as reducing costs or opening new routes to market. They now engage both the Telecom players and traditional IT players for their solutions. This is changing the equation for Telecom and IT solution providers as they are being tasked with offering an entire portfolio of IT and telecom services to their customer base. It’s important that they deliberately recognize this, and select one of the following three options:
- Working together with other solution providers to develop comprehensive customer solutions
- Making their own acquisitions to offer an end to end portfolio of telecom and IT services
- Organically growing a new solution practice in an aspect of IT or telecom services that they previously did not have
In addition, the business models that these solution providers in Telecom and in IT generally operate within are very different. Mature solution providers who offer both telecom and IT services often have separate organizations handling each, different quota retirement models, and associated business models. On the ‘vendor and telco side,’ Telecom companies often strike backend deals ‘for the life of the contract’ agreements with the solution providers to take down opportunities. Then they need to have open communication to manage the opportunity through the entire sales process. IT software and service vendors who historically had traditional partner program elements like resale, rebates, and MDF are now building similar lifetime of the contract profit models and incentives for solution providers. This telecom and IT convergence is also forcing both IT vendors and Telecom Service Providers to join forces, team up, and combine partner program offerings to support channel partners throughout their ecosystems.
IT vendors are still trying to sort this new business model. It’s different and it requires a new way to operate. Compensation models will also need to be updated to support the new ecosystem. The current compensation models often have people in competition with each other when they need to work together. This leads to confusion for the customers and the solution providers. And it slows the process for deploying solutions.
While IT vendors and telecom service providers sort the new model, here are 4 things solution providers can do to seize this IT & Telecom convergence opportunity now: :
- Create clear customer messaging that outlines the complete solution and the end value of each component of the solution. (ie Telecom, IT Vendor & Solution Provider Partner services and value).
- Bridge the gap between Telecom, IT Vendor and the customer to present a united team which will yield great value to the customer.
- Build deep, strategic relationships and become the consultant who has the creativity and flexibility to address the needs of the technology areas to harness the combined value for the customer.
- Develop more human resource talent to evangelize these blended solutions at roadshows, events, and customer meetings. The skillset for this is a hybrid mix of technical, sales, and SME/business development expertise. They need to be capable of building trust, as well as understanding both the channel and direct side of the business and how to interact to bring value.
To learn more about how you can navigate this new market dynamic and close more wins for you and your customers, contact us!