63 / 76
Does it Matter?
It is not clear that the “retail direct” sales model for mo-
bile and some other products necessarily is troublesome for
channel partners. To be sure, the channel would benefit from
ability to sell products representing half of total telecom ser-
vice sales volume. But channel sales is about niches.
True, channel partners have small roles, if any, in
sales of most consumer products, and mobility might be
likened to a consumer product, even when purchased by
business customers.
In that sense, mobility is a product akin to
consumer or even business voice or entertainment
video. There is little opportunity for channel part-
ners to add value in the distribution process.
At a high level, the bad news is that mobil-
ity, while representing half of total telecom sales
volume, offers scant channel partner upside. The
“good news” is that the pattern is not unusual.
Core channel products “always” involve
more-complicated products sold to SMB and
remote enterprise customers. While it is true
that this means the volume of sales opportunity
is limited, that always is the case for distribution
using the channel.
Channel partners always add the highest
value in the space between consumer retail and
enterprise direct distribution. That means prod-
ucts with some complexity, purchased by SMBs and other
business customers.
Simple products costing relatively little, in the consumer
space, can be purchased either online or using retailer chan-
nels. Complex and expensive products representing large
sales volumes can be effectively sold direct by suppliers to
targeted enterprise buyers.
So simple mobility products – devices and services – are
not generally suitable for channel sales.
Some will point to growing use of cloud-based business
software, for mobile users, as a potential area for channel
distribution. That is a developing opportunity, some would
argue. The biggest present opportunity is “software as a
service,” essentially the replacements for shrink-wrapped
software purchased by businesses and consumers.
The next-largest opportunity is outsourced storage and
backup services, part of the “infrastructure as a service” market.
The specific role for channel partners might be said to
be unclear at this point. SaaS is a product provisioned “on-
line,” though how it is sold is a more-fluid matter. Up to
this point, most SMBs might logically use cloud infrastruc-
ture for simple backup and storage purposes.
The point is that neither SaaS nor IaaS are “drop
dead simple.” And that means there is a potential role for
channel partners. The immediate issue is whether the op-
portunity mostly is created for data value added resellers
and integrators, or whether there is room for the telecom
channel to participate.
Right now, the existence of a significant opportunity for
the telecom channel is simply unclear. Traditionally, infor-
mation technology channel partners have “owned” the SMB
space. But cloud computing makes product solutions much
more standardized, and much easier to provision.
The fact that half of telecom revenue now is sold in ways
that do not offer opportunities for the telecom channel part-
ner is notable, but hardly unusual.
Traditionally, that always has been the case, of course.
International and long distance products once sustained the
whole telecom channel.
The portion of telecom service revenue potentially well
suited for the telecom channel always was a fraction of total
revenue opportunity, even after the product suite changed to
various forms of special access and cloud-based business voice.
None of that fundamentally changes, even if mobil-
ity products mostly are suited for “retail” or “consumer”
sales channels.
To be sure, if mobility represents more than half of
sales volume, that also means channel partners have little
role. But that generally has been true for other “con-
sumer” segment products, and for “enterprise” or “data”
products as well.
The nearly complete absence of telecom channel rel-
evance for sales of mobility products might be viewed, in one
sense, as a “missed” opportunity. That likely is inaccurate.
Oddly enough, the emergence of mobility services as the
largest segment of the telecommunications market, and a
segment largely unsuited to telecom channel sales, has not
been an especially “dangerous” development.
In the same way, mobility has not proven especially trou-
blesome for capacity providers, either. In many instances,
mobile backhaul, for example, has created new opportunities,
without the requirement to be involved in the retail side of
the business.
For the largest facilities-based service providers, that
is untrue. Failure to win at mobility can mean failure of
the business.
So the top line does not tell the whole story. Globally,
mobile drives the business. For telecom channel partners,
it does not.
B Business
9 Employed;
illion in Revenue
Enterprises
+ Employed;
illion in Revenue
ireless Revenues,
)
2016 2017 2018 2019
Wireless
and Mobile Revenu
2011
2012
2013
2014
2015
2016
Business network services
Fixed braodband
Fix d voice
Handset data
Mobile broadband
Mobile messaging
Mobile voice
ress; company reports
. Telecommunications and Content Distribution
3 2002 2013
Consumer net
2002 2013
Business
2002 2013
Business et
Cable and other
Wireless
Wireless
185
226
163
139 130
107
Source: Consumer Intelligence Research Partners
Carrier
57%
Best Buy
12%
Apple
9%
Source: Apps Run the World
Enterprise Applications, Cloud vs Non Cloud Revenues, $M
License and Maintenance
Cloud Subscription
250000
200000
150000
100000
50000
0
38555
46502
53050
60681
67447
73133
148424
146924
144896
141498
138133
133066
2014 2015 2016 2017 2018 2019
9
14
20
37
Source: Bureau of Labor Stati tics
Percent of employed person who worked at home
in 2014 on an average workday, by education
0
10
20
30
40
Less t an high
school diploma
High school
diploma only
Some college Bachelor’s degree
or higher
Percent
Security Technologies
Source: Infonetics Research
Top 5 Technologies Service Providers Plan to
Deploy Virtualized Security Solutions for in 2015
Web application firewall
Firewall
Web security gateway
Mail security gateway
Next gen firewall
0%
40%
80%
Percent of Respondents
63
January - February 2016
|
Channel
Vision