Resources & FAQs for Better Technology Buying

This model is widely utilized by providers of Internet, SD-Wan, Data centers, Telecom (all the big names), Mobility, Unified Communication as a Service (UCaaS), Multi-media contact centers and many more.  The agent is a 1099 sale rep responsible for driving new business to the provider.  Commissions tend to be very lucrative to attract sellers.  The money flows from you to the provider when you pay each monthly bill.  The provider pays a percentage of that to the agent.  Also, behind the scenes, there is typically a master broker between the Provider and Agent acting as a clearinghouse to process orders and commissions.

Interestingly, agents continue to receive commission for as long as you continue using the service, even where you no longer have any relationship.  In such cases, value can be siphoned away from the end-client towards the agent bases solely on the originating seller of your account with the provider.

Role of the Agent:

From the perspective of the provider, agents are sales reps only.  The agent is not a signer on the contract.  The contract is between you and the provider. Therefore, the provider is 100% responsible for all aspects of service delivery and customer service.  Many agents do add additional value by means of expertise and support but often not to the level of value that you end up paying them, indirectly.

Evaluation Criteria:

Key Question:
For any given technology, does an agent under consideration create enough additional value compared to what I would otherwise receive from TechTrust?

Considerations:
Do I even need a salesperson?
If so, should I consider using an agent instead of a direct rep of the provider?
If so, what level of compensation is appropriate for my chosen agent?
May I choose TechTrust to regulate the commissions paid to them?
Does the power to control commission (who gets paid, when, and how much) help me build stronger IT teams?

This model is utilized by tech companies in almost every sector.  Unlike Agents, the Reseller is a true middleman, you contract with the reseller, not the provider.  The price however is often controlled by the provider, but not always.  The profit margin will often vary based on the volume tier that the Reseller achieves for the provider.  The higher the tier, the lower the wholesale price, to the Reseller.  The money flows from you to the Reseller, to the Provider.  Also, behind the scenes there may be a distributor between the provider and reseller acting in a high-volume order & product warehousing capacity (even for non-physical products like software licenses).

Role of the Reseller:

The role of the reseller is to sell, support and bill for the underlying provider service.  Unlike agency there is more involved than just the sales role.  Nonetheless, the decision criteria are similar, but not identical, to the agency model.

Evaluation Criteria:

Key Question:
For any given technology, does my current reseller create enough additional value compared to what I would otherwise receive when buying through TechTrust?

Considerations:
Do I provide my own support in-house?
Do I even require much support?
If so, is my current reseller exemplary, more intimate, or superior to what any other reseller would be required to provide?
If so, when does it make sense to unbundle procurement (of the solution) from the support, enabling me to negotiate my requirements (for each) independently?

In such cases, the provider has no agents and no resellers.  These companies fall into two types:

Transactional:
These providers typically offer a low complexity solution that can be procured easily over the internet without requiring much sales efforts.  In such cases, TechTrust does not offer additional value.

Niche:
There are many niche providers, some of which we’d be able to approach on your behalf and negotiate the sales costs out of a prospective deal.  This works well when you’re fairly certain that you’d like to select this provider, and hence you don’t require a lot from a salesperson.  In such cased, let us know about your interest in this provider.  We might be able to help by negotiating in advance of engaging a salesperson.  We’re continuing to refine these techniques for Mid-Market level engagements.

This space is now just like a utility. There is very little to think about. Unlike in the years past, there is no longer much comparison nor complexity in determining requirements. Connectivity is simple: It’s a question of circuit types: Fiber, Coax, and/or 5g Wireless, provided by the local phone company or the cable provider. That’s it. There is slightly more complexity in choosing and SD-Wan provider overlay, but not much. In short, there is little need for an “hunter” salesperson role, yet the providers,  being in fierce competition with each other, pay high commissions. Big upside, little downside. We can connect you with the right internal resources from the provider that you need to directly manage all aspects of your account. And, if you need support above this, there are specialists who can deliver more value, at a lower cost than your typical agent. This segment is a no brainer.

In this case, Agents are only connectors to the provider solution engineers and provider sales folks who provide the dog n pony. These people are very good because they get to really “know” their product since it’s the only product they sell. Yet, the commission are very high. If you need expertise in this space, it’s available. But don’t waste it on an agent, or a consultant masquerading as an agent. If you need specialize support- ask us about these EcoSystem Partners who will cost less than giving up the life-long commissions stream.

Here commission rates are medium (Microsoft and IBM), to low (Amazon, and Google Cloud) but since the spends can be enormous, the absolute savings can be significant. Also consider that in this area, there are many solutions and consultants who can help optimize your cloud spend with tools that determine the best solution for your unique combination of work-loads. These solutions, some automated, some semi-automated, and some involving consultants can help drive cost savings through optimization.  Ask us about our Ecosystem Partners.

This is relatively new and a big upcoming business model allowing you to procure, and manages a large variety of SaaS solutions. A lot of this software is relatively inexpensive but if looked at in the aggregate, you rebate commission will continue to grow over time.

Niche means focused on a narrow vertical or function. Many of these providers are expensive and offer commissions upwards of 30%. It’s important to seize these opportunities where the right fit is established.