HUNTSVILLE, ALABAMA — In most areas of the channel, traditional hardware-focused solution providers have made their accommodations with software and with the cloud, and moved beyond the hardware model that most of the older ones were weaned on. In the telecom business – not so much. ADTRAN has been encouraging their partners to transition their business models somewhat, offering new and non-traditional services that the market wants and which they think partners will like, particularly through their ProCloud Subscription Services. The response to date remains a work in progress, although the overall trend line is more positive. Meggin Sawyer, a two-decade veteran of ADTRAN, who became Vice President, Business Solutions and Cloud Services three years ago, talked with ChannelBuzz at ADTRAN’s CONNECT Press and Analyst event here about this transition.

“Some of our partners have been telecom VARs their whole lives, and have been heavily focused on hardware and on a buy-and resell model,” Sawyer said. “The ones who want to be innovative might be 30 per cent of the whole, and that’s likely an aggressive number. Change in general is just hard, but cash-wise, it’s a very difficult transition for them, as it involves moving from receiving large upfront sums to much smaller individual payments over time.”

There is a clear segmentation between different partner types on the willingness to evolve their models.

“We have approximately 700 partners, and a lot of have been in the business for many, many years,” Sawyer said. “Only a small part of the hardware partner base is transitioning, with about 30 per cent of those showing some interest in the OPEX services ADTRAN is now offering.”

MSPs are rather more promising, although for ADTRAN the catch is that they are still a much smaller segment than the VARs.

“Among partners who actually started as MSPs, about 60 per cent are interested,” Sawyer said. “We have been making a recruitment effort in this area, particularly as this is a newer partner segment for ADTRAN. The nature of the technology cycle for MSPs helps here, as they are more inclined to look at new services every couple of years.”

The difference between attitudes of VARs and MSPs has been particularly evident in the cloud.

“In telecom, the cloud still tends to be something that a lot of people in the channel like to talk about, but where fewer have done anything,” Sawyer said. “Many VARs haven’t jumped in. MSPs have, and there has been a huge uptick in UCaaS [United Communications-as-a-Service], both putting it in their own data centres and selling somebody else’s.”

The Agent marketplace has also been doing well in transitioning to services, partly because of the nature of that business, where agents look for anything to sell.

“Agents are not technology-oriented,” Sawyer said. “They are hunters, who are all about selling things.”

Sawyer said that ADTRAN has been consistent on its messaging to partners about the need to broaden out their business models.

“The market is changing, and if they are a traditional telecom partner, they do need to do something,” she said. “The new business model is coming and is here to stay, and if they don’t do something about that, they will likely see a marginal decline in their business. Software is changing things, and you don’t need an MSP or VAR just to deliver the software piece. With the easy access to API integrations, partners have to get good at these integration skills. They also need to learn more about how to sell to people in different lines of business, who increasingly have more control over purchasing decisions in this space, and to whom you have to sell very differently than the traditional telecom purchaser.”

ADTRAN introduced their ProCloud Subscription Services to give partners a clear OPEX model two years ago. They now have ProCloud managed services available in Unified Communications, Security, and Analytics, as well as an all-encompassing Network Management service. In the very near future, they will also be introducing a new type of service, which even most MSPs have not sold before. It is still embargoed information, however, and so cannot be identified yet.

Moving the ProCloud Services beyond the United States took some time, but the Services have been available in Canada since earlier this year.

“The only service that is not yet available in Canada is the Network Management service, and that is because we have not yet operationalized it with our distributor there,” Sawyer indicated.

Ingram Micro has been distributing ADTRAN in Canada for about a year and a half.

“Actually shipping from Canada helps us a lot,” Sawyer said. “Before, everything had to come out of the U.S.”

She described ADTRAN’s Canadian channel business as small, but growing.