Wholesale partnerships are key to the success of the Channel. MSPs, resellers and distributors rely on a strong relationship with their partners in order to sell products and services effectively. It can also open up a host of new and exclusive opportunities that channel partners can capitalise on, driven by ever-increasing demand for technologies such as AI, 5G and unified communications-as-a-service (UCaaS).
“The wholesale market is a very mature arena which is a key conduit in any reseller’s success, opening up a wealth of services and opportunities they wouldn’t be able to access any other way,” said James Hughes, sales director for the UK, Evolve IP.
Dave McCourt, head of marketing, communications and strategic relationships at Strategic Imperatives, said, “We’ve seen the market move to recognise wholesale as a viable option to support network owners to reach a broader customer base and for ISPs to access diverse network owners. We can expect to see the market grow steadily more comfortable with this idea.”
In recent years, there has been a significant trend towards MSPs and resellers partnering with one wholesaler rather than dealing with a mobile network operator (MNO) direct as specialist aggregators have developed differentiated channel products that end users can’t get direct from MNOs and are competitively priced.
“SMBs, in particular, are seeking simplicity in managing their increasingly complex IT environments, especially with cloud computing and cybersecurity becoming more critical,” said Nathan Marke, chief operating officer at Giacom, whose Growth Accelerator programme enables it to work with partners to understand their goals, develop a business plan and execute on it. “These businesses are looking to buy their technology from one place from a strategic partner that can combine holistic solutions with ongoing management and optimisation of their entire technology estate.
“As a result, MSPs and resellers are expanding their product portfolios to provide comprehensive solutions, which is pushing wholesalers to consolidate their offerings, reducing the number of suppliers MSPs need to manage. While the wholesale market remains somewhat fragmented, forward-thinking wholesalers are responding by integrating services and supporting their partners in delivering greater value to end users.”
Mutual partnerships
When choosing a wholesaler, MSPs and resellers need to look for those that will provide the most mutually beneficial partnership, enabling them to forge a trusted relationship, without getting tied into unnecessarily lengthy contracts. That means finding a partner that is collaborative at all levels of the business and provides constant support, with regular in-person meetings and catch-ups.
“As a first step, MSPs and resellers should consider what their customers really need – whether it be reliable connectivity, speed, future proofing or transformational solutions and wrap-around services – to select the best wholesaler,” said Gavin Jones, channel director, BT Wholesale. “It’s important that they do this with a future-looking lens to get ahead of demand and capitalise on opportunities.
“For example, as customer demand around all-IP, 5G, AI and cloud services increases, partners will need a vendor who continually invests in improving their high bandwidth network. The appetite for new technologies is futile if there’s not a rock-solid connectivity foundation.
“MSPs and resellers should also consider how much a wholesaler has got their back. BT Wholesale’s Partner Plus programme is exactly this; it not only provides access to offers, products and exclusive events, but empowers partners with marketing and educational support.
“Choosing a wholesaler who shares a similar sustainability ethos is vital too. Resellers and MSPs should look at vendors’ sustainability targets and their credentials to get under the bonnet of the company. Today’s customers care a great deal about sustainability, which means that this is not only better for the planet, but for the bottom line.”
Channel partners shouldn’t focus solely on cost in the selection process either. They also need to take into account support levels, differentiation and international global reach, carefully taking the time to ensure they get the right fit. Access to products or vertical markets, or skills they don’t already have are other key considerations.
“While competitive pricing is important, MSPs and resellers should prioritise wholesalers that help them grow by offering more than just a broad range of services,” said Giacom’s Marke. “The right wholesaler will collaborate with its partners to help them expand their product portfolios, go broader and deeper, and differentiate themselves in the market.
“This means finding a wholesaler that works with you to co-create business plans, co-invest in your growth and support your diversification into new areas. Wholesalers that provide strategic support and help you grow are the ones that enable long-term success, rather than simply competing on price.”
MSPs, in particular, want to offer a full end-to-end service from the router right through the connectivity process, so that they can manage everything. So engaging a Layer 2 wholesaler that gives them this level of control is key, enabling them and their customers to monitor and manage the service themselves.
“Choosing the right supplier will tick all the boxes for resellers and MSPs to move quickly into selling mobile data products,” said Adrian Sunderland, CEO, Jola. “Wholesale suppliers will need to give channel partners the tools to uncover and win deals, usually competing with direct sales arms of the mobile networks.
“They must be an aggregator with access to all the networks and, ideally, they will also be an independent MVNO. Most importantly, everything must be automated, with real-time APIs offering zero-touch provisioning and management through a single self-service portal.
“The most successful of these will be highly innovative, with a constant stream of relevant mobile data and IoT products that the networks would otherwise take years to develop and launch. When you partner with the right channel supplier, mobile data is easy to sell, support and bill.”
Innovation is key too when it comes to selecting a supplier, both in terms of their product portfolio and roadmap. That includes value-added services such as security, backup, software-defined solutions and converged offerings, as well as advancements in delivery and quote-to-cash processes, using automation and AI.
Environmental credentials
In terms of environmental and sustainability credentials, MSPs and resellers also need to choose a wholesaler that has the full certification and is compliant with the relevant regulations. For instance, the British Standards Institute Kitemark standards BS8887-220 and BS8887-211 for remanufactured laptops ensure a high-quality product, giving MSPs peace of mind as far as consistency and guaranteeing second-life models are equal to or better than brand new equivalents.
“MSPs and resellers are expected to work with suppliers who are committed to sustainability and compliance with industry regulations,” said Steve Haskew, group director of sustainability and growth at Circular Computing. “In doing so, these partners must find wholesalers with environmental policies and trustworthy supply chains.
“Accreditations such as ISO 14001 and 9001, an internationally recognised standard for environmental management systems, help ensure that MSPs purchase from a provider that isn’t damaging the earth.”
Wholesale partnerships are a two-way street. On their part, MSPs and resellers need to be agnostic and flexible in order to maintain their competitive advantage and prepare for any future market changes. Once they have entered into partnership with a wholesaler, they then need to focus on building that relationship, where they both have a shared vision, values and interests. It’s also important for both parties to identify and address any problems as soon as they arise.
“Wholesalers require a few key functionalities from their partners, who must recognise this, and either maintain, innovate or launch platforms and tools specifically designed to help wholesale customers,” said McCourt of Strategic Imperatives. “Leaders in this space are tackling these challenges through customer-centric solutions to facilitate the future of the UK wholesale market.
“For wholesalers, they must be able to access a diverse ecosystem of national providers. There are already platforms available that empower that ecosystem with a ‘connect once, connect to many’ approach, such as The Fibre Café, seamlessly connecting altnets and ISPs via a single unified gateway.
“Through these solutions, providers are supporting the simplified and streamlined onboarding and adoption of wholesale fibre, revolutionising it from a lengthy, complex and costly technical endeavour into a straightforward and efficient commercial discussion, which, in turn, helps wholesalers achieve their goals as quickly as possible.”Partners themselves also have a key role to play as the intermediary between vendors and end users. Through regular meetings and close relationships, resellers and MSPs can gain first-hand feedback from customers about new solutions, changes and updates, which can be quickly passed on to vendors and actioned.
“It’s important that vendors work together with partners to drive growth and provide the best solutions for customers,” said BT Wholesale’s Jones. “We encourage partners to air any concerns or feedback with your account manager, attend personalised events to learn new insights and tap into the valuable network that BT Wholesale has.”
Reseller pain points
From a wholesaler perspective, they need to gain as much information and feedback as possible about its resellers’ business as well as its biggest pain points. For example, changing voicemail settings or understanding the type of products and services that their customers want. Using this information, the wholesaler can then improve its partner training portal and add new products to its roadmap that it feels will support growth and the trends it’s seeing in the market.
When establishing a relationship with a wholesaler, it can be beneficial for partners to bring wholesalers into the sales opportunity early in the process. This can enable them to better understand and be able to develop a tailored best-fit solution for their customer that may be more cost effective, technical or resilient.
To strengthen these partnerships, partner relationship management (PRM) solutions can be used. PRMs provide streamlined communication between vendors and partners, better lead management tracking and deal registration, and self-serve co-marketing and co-selling support.
Vendors looking at adopting PRMs, however, must consider a range of factors such as scalability, how it will be used internally and by partners, and specific features relevant to their partner strategy. More specifically, PRMs should enable vendors to grow their partner business across complex and diversified partner types.
In an increasingly commoditised market, standing out from the crowd is one of the biggest challenges facing wholesalers. That’s why it’s essential for companies to constantly keep challenging themselves, to remain agile, to stay on the cutting edge of innovation and to adopt a forward-thinking approach, as well as continuing to educate their reseller partners about their latest products and services.
“One of the biggest challenges facing the sector is differentiation and not being seen as the same as everyone else,” said John McKindland, head of partner channel, UK at Sona Business. “That could be price, products and services, value wrap or international installation reach; how to package everything together.
“The same issues apply to partners as well as wholesalers. It’s a very competitive market, so if your vendor can’t differentiate, how can you? You just become another ‘vanilla’ offering.”
Market consolidation
An inevitable consequence of a saturated market is further consolidation, notably the altnet mergers between Netomnia and Brsk, CityFibre and LitFibre, and Nexfibre and Upp, thus reducing the options and providers available. As a direct result, costs are likely to stabilise or potentially even increase, while, on the flipside, innovation may decrease too.
“The consolidation of altnets is inevitable and essential for the wholesale market,” said Giacom’s Marke. “Resellers currently face a fragmented landscape when trying to find the best fibre solutions for their customers. With so many altnets, it becomes difficult to navigate the options, and many altnets lack the mature sales infrastructure to facilitate easy transactions at the B2B level.
“We believe the future of the wholesale market lies in curation - offering carefully selected fibre solutions that we can deliver brilliantly. At Giacom, our strategy focuses on partnering with key providers like Openreach, Virgin Media O2 and CityFibre, covering the majority of available B2B FTTP in the UK. As consolidation occurs, smaller altnets will likely fold into these larger players, allowing us to maintain quality while reducing complexity for our partners.”
There’s also huge margin pressure throughout the supply chain, with large global players driving down prices. Without sufficient margins, MSPs can’t invest in deliver the high-value services that SMBs need, and wholesalers lose their ability to provide meaningful support.
“This race to the bottom on pricing strips value from the entire chain, making it harder for MSPs and resellers to differentiate themselves based on quality,” said Marke. “For the sector to thrive, there must be a shift away from price-driven competition and a return to delivering differentiated, value-added services that allow all parties to retain margin and grow.”
Another challenging area is altnets’ provision of customer connections at scale. While they have struggled to do so in recent times, thus stifling progress, the wholesale market has stepped in to alleviate the problem by connecting altnets and ISPs through a unified gateway into the UK fibre ecosystem.
McCourt, of Strategic Imperatives, said, “The rapid build of some of our industry’s giants will have rained on the parade of aspiring altnets, who will find their ability to benefit from first-connector advantages dampened.
“However, I’m confident the array of innovations being taken to market at lightning speed across our sector will elevate business success, strengthen partnerships and collaboration, and, ultimately, serve customers more effectively, driving profitability in the process.”
Key opportunities
In terms of opportunity, mobile data solutions present a huge growth area for the Channel as they can replace traditional fixed line and provide reliable connectivity for a range of new M2M applications. Examples of this include digital signage, ANPR/CCTV cameras and tracking. Recent innovations in global multinet SIMs and QR codes also provide the Channel with alternative products that are more cost effective for its customers.
Given the huge growth in demand for AI, resellers and MSPs also need to work with vendors to ensure customers have the right network capabilities needed for the technology to work effectively. In terms of UCaaS, they must educate end users on how to consolidate and maximise the performance of their collaboration platforms.
Another area where wholesalers are seeing traction right now is sustainability. With companies under increasing pressure to adopt practices that protect the environment and their clients, they are prioritising partners that are laser-focused on sustainability.
“A key part of the pre-used market is remanufactured IT, an option resellers and MSPs are increasingly considering to address their clients’ sustainability demands,” said Circular Computing’s Haskew. “Analysis by IT software company Nexthink shows that the world’s top computer models can be remanufactured, highlighting the shift in ethos from new at all costs to pre-used.”
He added, “While grappling with the economic challenges, wholesalers must also adopt sustainable technology practices driven by customer and business expectations. Almost two-thirds of the UK’s largest companies have pledged to reach net zero by 2050 and 87 of the largest companies have signed up to the BRC Roadmap to reach net zero by 2040. In doing so, the Channel must adapt or be left behind by the push to net zero.”
At the heart of all this is the wholesale partnership. As customers demand even more, so being able to deliver unique personalised solutions through the wholesale channel will be key.
Jola’s Sunderland concluded, “The prospect for the Channel is significant. ICT resellers already enjoy strong relationships with businesses and the public sector, having sold them a range of IT and telecoms infrastructure. We help partners uncover opportunities and win them with solutions end users just cannot buy from anyone else.”
This feature was included in our November 2024 print issue. You can read the magazine in full here.