Will the Channel Survive?

By Peter Radizeski, RAD-INFO Inc.  |  November 02, 2016

When I attended the networking session at CompTIA’s (News - Alert) ChannelCon, I noticed (once again) that almost all of the room was well past 40 years old. The channel is not attracting new people.

On the VAR side, the number of value-added resellers has shrunk considerably in the last few years, due to the effects of cloud, SaaS (News - Alert), and vendor strategy shifts. The largest VAR vendors – Microsoft and Cisco – have been going through their own transitions to cloud, which has rippled out to the channel with ill effects.

With the big master agent mergers (X4/Sandler and Intelisys/ScanSource (News - Alert)), more mergers will occur, further consolidating the channel. Even IT has seen tremendous M&A.

Personally, I have seen a number of people leave the channel altogether, and a large percentage of them leave telecom too.

Channel partners do not use social media well. They have stagnant Twitter (News - Alert) accounts and sporadic Facebook posts. Certainly, they are not maximizing Instagram and Snapchat where the millennials are. That means that channel partner companies are not noticed. We don’t recruit on college campuses. Most of us fell into telecom by accident, but those accidents are not happening at the same rate with the current group of prospective employees and partners.

As one channel vice president said, “Telecom is not as sexy as working for Amazon, Google (News - Alert) or Facebook.” It makes me wonder how it survives. We aren’t handling the churn as a sector, but then who would? The Agent Alliance? TCA? Master agents?

With attendance at the latest channel show down, does that reflect a trend, or is there no correlation?

How do we recruit college graduates who want to be entrepreneurial to start agencies? I wonder if there aren’t opportunities on college campuses. This is a great lifestyle business. It is in growth mode as more vendors turn to the channel for sales growth. It requires very little capital to get started. There aren’t any requirements or barriers to entry. And a few years ago it looked like there were new agents entering the marketplace, but I don’t see them at the shows. Soon a good percentage of partners will seek to sell/retire. What then?

Peter Radizeski is president of Tampa, Fla.-based telecom consulting firm RAD-INFO Inc.

Edited by Alicia Young