Intermedia Sales Leader On 50 Percent Partner Margins And UCaaS Surge

Intermedia's 'Partner Economics' Advantage

Intermedia partners are reaping upward of 50 percent margins on Unified-Communications-as-a-Service solutions thanks to the company's stellar channel strategy.

"Partner economics always weigh in our favor compared to the competition," said Eric Roach, global vice president of field channel sales and distribution, in an interview with CRN at XChange 2018, hosted by CRN parent The Channel Company. "Some of our best partners are enjoying 40 [percent] to 50 percent margins on our products -- that's unheard of."

The Mountain View, Calif.-based UCaaS specialist, which received a 5-star rating in CRN's 2018 Partner Program Guide, launched its new flagship platform, Unite, earlier this year. The all-inclusive cloud-based platform integrates desk phone, mobile phone and desktop technologies, including videoconferencing, collaboration, voice-mail transcription, fax, storage and cloud backup. Unite can be sold either as an Intermedia product or under a partner's own brand. Roach talks to CRN about how Intermedia's channel strategy separates the company from the UCaaS competition.

Why should solution providers pick Intermedia in the UCaaS arena?

Partner economics always weigh in our favor compared to the competition. We not only have an Advisor Program like most of our competitors, but we also have a Private Label Program that allows our partners to set the sell price and allows them to do the billing and to do the support. So ultimately, that fits really well into a traditional MSP model. Because they can set their own sell price, they control the margin. Some of our best partners are enjoying 40 [percent] to 50 percent margins on our products -- that's unheard of. That's what we see as our big differentiator.

How can a partner achieve 50 percent margins?

We have three tiers in our Private Label Program. Our best tier allows them to get the best buy price. If they're out there selling to the market at what the market will typically pay, you're looking at easily 40 [percent] to 50 percent margins. That's the competitive sell price point. There are other ways to make money as well. Typically when they buy Unite, they get a free phone per seat. A lot of our partners are selling the phone even though they're getting it for free or they're leasing the phone out at $5 or $6 per month – that's just add-on margin that they can do. It's free money for them.

What makes Unite a UCaaS market differentiator for partners?

It allows partners to tie in multiple solutions they might be selling. You go to a customer site, they're paying $30 a month for something like GoToMeeting. They're paying 'X' amount of dollars a month through their Vonage phone line. They're paying some of our competitors on the file syncing and share products $25 to $30 a seat for that. With our product, it's all built in. So they can go in and deliver all of those solutions at one price point, a small price point, to that customer. They're selling the experience and you can price to the experience. You're actually removing a lot for the end customer and providing a lot of back-end margins for the partner. Unite brings a lot to the table that we didn't have previously with our former cloud PBX product.

What's your channel differentiation when it comes to partner enablement?

When we sign on our partners, we make it mandatory for them to go through a very easy, two-hour sales certification program. We offer that for free. It helps them understand our products and how to position them from a competitive perspective, but it also helps them understand, 'Where do I go find margin and opportunities?' We've gotten nothing but positive praise on the experience and the ease of going through it – that's the start. Then we do face-to-face training at partner sites and different types of enablement as well. So a partner doesn't just sign up and we say, 'OK, go sell Unite.' We offer them the certification program and then we offer them a full on-boarding process over the course of six or eight weeks that allows them to get face- to-face training. It allows them to do go-to-market planning. We help them get to that first, second and third sell so they’re self-dependent. We're teaching them how to sell this stuff. That's for partners who are new to UCaaS.

What is Intermedia's sweet spot?

Where we see ourselves really differentiating is in SMB market. We feel like we have the best feature set and price point to really fit an SMB customer. That doesn’t mean that we can't scale up to enterprise, but that's where we see our sweet spot, under 250 seats. We also have many engagements of thousands of seats. We have a lot of our partners who are offering other competitive solutions that maybe focus more upmarket, then use us for the 250-seat-and-under customer segment. … Some customers don't even know they're looking for unified communications, but when they see what Unite brings them, it sells very well versus just looking for basic phone service.

What should partners be pumped about in 2019?

We just launched Unite in February. That product is a ready-made solution today, but we're still adding on new capabilities to it every month. So from a technology perspective, there are more enhancements that will come. We're putting a lot of our money and marketing dollars in incenting our partners to go out and find new business, to close business for us and find new logos. We're spending a lot of time putting fuel behind partners with marketing opportunities. … We're seeing huge growth in UCaaS. We've transitioned ourselves over the last couple of years into really being a leading provider in the UCaaS space.