In today’s economic climate, a value-conscious shopper may look to wholesalers such as Costco to stock up on household goods. I frequently find myself at Costco versus specialty stores, because I know I can get the same high-quality olive oil at a fraction of the price.
And when you switch out the olive oil for network solutions, the concept remains the same.
Earlier this week, I shared a blog post about Nexus IS’ experience with wholesaler Neutral Tandem’s Cisco Hosted Collaboration Solution (HCS) proof-of-concept trial. We got to hear the VAR’s side of the story, but I knew you’d want to know more. So I checked in with Ian Neale, Neutral Tandem’s VP of Product Marketing, and asked him to give me an insider’s look at his company’s wholesale model.
What I really wanted to find out was what our partners could expect when working with them, and, more important, how they can help partners increase their revenue opportunities. Want to know what I learned?
Channels Blog: What can a Cisco Partner looking to build out their HCS practice expect when working with you?
Ian Neale: We’re a wholesale-only shop. We don’t provide retail services directly to the customers, so our services don’t create a channel conflict. Neutral Tandem is in the “backroom” providing a white-label service that the VAR uses as a component piece of the hosted or cloud solution. After deployment, all end customer facing communication and relationship management is handled by the VAR.
CB: What are you hearing from partners in terms of their needs?
IN: Some VARs are looking to add this service because of the media interest in the cloud, and they want our service in case a customer comes to them and only wants it hosted. On the other hand, you have VARs who are building complete practices around hosting. One VAR we have been talking with wants to move all of their premise-based customers to hosted over the next two to three years.
CB: Is there demand out there? Will VARs be able to convert this into revenue for them and indirectly for Neutral Tandem?
IN: Absolutely, Cisco has been searching for a wholesale solution for their VAR and Integrator community and we’re the first to put it in the market on a wholesale basis.
CB: Is everyone going to move from premise to hosted?
IN: No, but there seems to be an unquestionable demand for this service. We went through a proof of concept for two reasons: First, to check the technology and secondly, to get a firsthand view of the actual market demand. I wanted to be sure that there was demand before I made a commitment to Neutral Tandem’s management team that this was a business initiative that we should get behind.
CB: Are there any other benefits for VARs that will help them increase their revenue opportunities?
IN: A lot of VARs already have an extensive managed services portfolio. Rather than simply providing a proposal for their customers to move from a premise-based solution to the cloud, VARs now have the opportunity to offer HCS as part of a portfolio of managed services, which gives them an opportunity to move a significant percentage of their revenues to a monthly recurring model.
VARs have in many cases integrated third-party applications into their premise based solutions to differentiate themselves in a particular sector. We will support VARs to integrate their third-party applications with an HCS offer to enable them to continue to create competitive differentiation in the market. Neutral Tandem will even consider hosting the third-party application in our data centers, so that they get the advantages of scale and combine it with the HCS offer to create a more complete managed service that they can bill on a monthly recurring basis. There are a lot of opportunities for VARs to layer in other services in addition to the basic HCS service.
CB: When will partners be able to offer this service to their customers?
IN: We’ll be in the position to offer general availability by the end of January 2012.
CB: If I’m a partner and I want to sell Cisco HCS, how do I get involved with Neutral Tandem?
IN: Cisco’s sales force actively sells HCS services and as appropriate refers VARs to Neutral Tandem to discuss our HCS Wholesale offer – to date the majority of our opportunities have come from Cisco’s sales force. We also sell HCS services directly into the VAR community, and as we come out of the trial phase, we’ll begin direct and indirect marketing of our services.
Now that you know what to expect when working with a wholesaler, what are your thoughts? Would you consider working through a wholesaler to provide Cisco solutions? Or, if you’re already working with a wholesaler, share your experience. We love hearing from our readers.