Verizon Channel Chief Schijns On Verizon Business Markets, The XO Acquisition, And Doubling Down On 'The Big Middle'

Targeting Main Street

Verizon believes that the biggest room for growth is in the "big middle." The telecom giant recently unveiled a restructuring of its small-business services segment to tout its new focus on SMB and local government and education customers in the form of a new business unit called Verizon Business Markets (VBM).

Janet Schijns, vice president of global channels for Verizon, is now chief channel executive and vice president of solution and sales channels for VBM. Along with the restructure, Schijns has an aggressive goal to ensure that the indirect channel not only remains the largest sales channel for VBM, but flourishes and grows even more in 2017.

Here's what Schijns had to say about the decision to create VBM, the company's successful acquisition of XO Communications, and the big opportunities that lie within the SMB customer segment for the solution provider community this year.

Talk about VBM, and the decision to restructure the Verizon small-business segment.

We are really digging in here -- we are finally going after the "big middle." VBM is really set up with an expanded focus on local government and education institutions and small and midsize businesses, but it's bigger than that. When we think about what's happening in the U.S. and think about the connection to the community – like beginning to put into play smart cities -- and we've been making acquisitions in this space as well as building up our own IoT practice, it's very clear that Verizon is one of the big connections in the community that helps businesses and government drive and grow. We wanted to ensure by putting together VBM that this would happen now and long into the future because we know that local businesses are the lifeblood of America. Whatever a SMB or government agency needs, we wanted to be there.

We retained the Verizon Enterprise group but it is really focused upmarket and on the largest global multinational companies in the world like the federal government. All of the medium business and majority of corporate accounts and all of SLED has come into VBM as well as the small-business channel, or the 'mass markets' channel that was within the consumer and mass business group.

Does this mean that Verizon partners will have to join two programs?

No, there will not be two programs even though there's VES [Verizon Enterprise Solutions] and VBM. The Verizon partner program is not getting split in half. It will continue to have tracks [such as] a wireless track and an Internet of Things track, and we continue to serve agent partners as we know them today. We will expand the program this year [with the] full intention of launching exciting stuff upmarket.

Basically, I took the Verizon Partner Program and moved it lock, stock and barrel over into VBM. But, [partners] can still sell into the enterprise even though that segment is in VES. It's all one partner program.

Tell us about your role within Verizon and if it's changing with the restructure.

Although I am a member of the executive leadership team for VBM, reporting directly to our president, [Martin Burvill, president of VBM] I'm also working with George Fisher, president of VES, and I run the channel program for VES as well.

The channel chief usually reports to the head of sales, so when a company has a channel chief report to the president, it indicates very strongly that the channel is the primary distribution strategy. For partners to hear that I own the distribution strategy, as well as the indirect sales and solutions channels, that’s a good feeling for partners to know they have a seat at the table in this new business unit.

Why target the SMB and local government and educational institutions?

About 30 percent of all business in a city today are startups – businesses either just starting out or are within their first year – and those folks often don’t know what technology they need so there is a huge opportunity there for [solution providers] to help them order more efficiently.

Our Fios product has amazing penetration and we will continue with that in the areas it's available, and now with XO, we can expand our 'Main Street America' offering because we are going to tool up partners to have conversations with many of those smaller businesses that don’t know how they can use technology within their business. Frankly, many of our partners are looking for areas to grow aggressively, so we are talking to them about what's next. We think what's next is bringing growth to Main Street America by helping these [customers] with their future technology needs to protect and grow their business.

What are Verizon's goals in terms of growing channel sales into 2017?

The indirect channel is key here. Today, the indirect channel is the primary means of distribution for VBM and we are expanding that percentage. In VBM, we are selling about 50 percent through indirect [channels] and our intention is to be at over 80 percent.

We are truly channel-first here and we are very excited about it because we understand Main Street. It's those local big businesses in town – the big employer – that are going to partners for assistance and help for their technology needs.

Will VBM change how the channel is already selling Verizon's solutions to SMBs, local government and education customers?

It's going to be business as usual. Our intention is to work with partners and bundle their and our services together to make it the most appropriate for this market. Nothing changes day one. The products that they sell today, [like] our business connection bundle and our internet offers, are all remaining in place and are all very viable products, but as we continue to bring XO in and continue to expand our fiber footprint, we will be creating more products that will be more germane to Main Street.

We will also be using the channel as our primary distribution channel for those products.

What will the combination of XO and Verizon's channel program look like?

It is our full intent to take the XO partner program and Verizon partner program and bring them together into one best-in-class program that serves entire SMB and government markets that purchase through a partner. Our intent at first has been just look at those programs and make sure we understand their levels and tiers to figure out a way to offer a matching level, similar to what we did with the Partner Advantage program [in 2015] where we honored the level that partners came in at, so that’s still in the initial discussions and that will be the approach as we look to integrate the XO channel.

There is a lot of work to do, but we are excited because they have a great channel. There's things in both programs that we feel will be beneficial to partners, but also our joint customers. We will be business as usual for the next 60 days, and our intention is to combine the programs in the April-May time frame.

What has the feedback from partners been like since the launch of VBM and the XO acquisition closing?

Partners are so excited. They have seen, as we have seen, this resurgence of smaller businesses and the massive growth opportunities in the SMB market. They are also seeing a resurgence on government spending on IT solutions, particularly at the state and local level. As we look to engage the citizens in a smart city, and students in next-gen learning, partners are so looking forward to having us double down to go attack that "big middle" and for us to focus the marketing attention and product attention, and most importantly, to have executive leadership.

[Partners] are also excited about the XO acquisition. There is certainly a synergy and it opens up a broader product portfolio for our partners.

With the XO acquisition closing and the Yahoo deal still pending, what do you want partners to know about your strategy regarding fiber and content in 2017?

There are two things. First of all, if it's good for the channel, it's good for Verizon. We always make sure we do no harm, so although we are very excited about coming together with XO and going after new business, we want to make sure our partners have a loud voice in how we redesign the best-in-class partner program and that it does no harm to their business.

The second thing is that this is the time to invest with Verizon. My channel strategy is: I want to have the fewest number of partners with largest impact. I'm not going to go out and trying to recruit thousands of partners. I think I have the majority of the partners I need outside of a few geographies, and it's going to come down to the partners and Verizon working together to rapidly expand across the U.S. We are going to over-invest in those partners and it’s the time for the partners that want to grow with us to stand up, raise their hand, and say, 'I'm all in.'