CRN Interview: AT&T Channel Chief On Why Partners Need Recurring Revenue And How They Can Help Shape A Software-Defined Future

Going Big With Partners

AT&T spent the end of 2017 rolling out big channel changes. From bringing its three distinct partner programs under one leader, to opening more accounts up to the channel, to introducing a new compensation model that includes recurring revenue opportunities, the Dallas-based carrier plans to spend 2018 "doubling and tripling down" on its revamped channel strategy.

The channel chief of AT&T Partner Solutions, Zee Hussain, gives CRN the scoop on AT&T's new partner program structure, the investments the carrier is making on its indirect sales unit, where the next technology opportunities are for solution providers, and how recent legislation could impact the channel.

Here are excerpts from the conversation, and read more about how AT&T is standing behind its revamped channel strategy here.

What does the partner program restructuring mean for AT&T partners?

We have solution providers that are unique to one program [either AT&T Partner Exchange, Alliance Channel, and ACC Business] and then smaller subsets of solution providers that might sell across a couple of our programs. These partners have been asking what the new structure means and if it's going to impact the support they get. We are not taking focus away from the indirect channel at all. In fact, we are doubling and tripling down on the channel. Now we have [all three programs] under one roof, and we have best practices across all three of those channels.

Hopefully, its evident to all of our partners that they are central to our strategy. Our goal is to make sure we have scale in all three channel programs.

How important is the option to earn recurring revenue to partners?

I have been floored by the interest and feedback that we've gotten since we announced the new commission model, certainly from the telecom agent community. We haven't had a residual [revenue] model in 9 or 10 years, and now we have it in place for ACC Business for the SMB market and Alliance Channel, but not in Partner Exchange because it’s a reseller model.

Now that we have a recurring revenue play, certain partners are showing interest [in working with AT&T] that weren't interested before and are in the process of onboarding these partners with us. The solution provider space that is pivoting to the recurring revenue, model and it is really critical to where they see themselves going.

Why is AT&T ramping up investment in the channel now?

We are moving from a hardware-centric business to a software business, which is enabling us to make feature upgrades in seconds and minutes rather than months and years, which is not sustainable. We want to make sure we have a vibrant, high-growth channel if we are going to make that transition. That message has been very well received by our partners.

What effect could tax reform have on the channel?

We've been out publicly in the market saying that having a tax structure that's competitive in the developed world will result in economic growth. We immediately announced we would invest $1 billion in the U.S. in addition to our normal capex cycle in the economy, and that investment translates to roughly 7,000 good jobs.

Without question, we believe it will have a very positive impact on the economy, and with the economy growing, our solution provider population can certainly take advantage of that growth. Many solution providers have been optimistic and happy about [tax reform], and plan on investing in their businesses.

Where are the next big selling opportunities that partners should be considering?

The big trends are still around cloud, mobility, IoT, software proliferation, and security. As we look across the partner spectrum, the one thing I have noticed is that the channel has been first when it comes to transformation. [The channel] was first to accept SD-WAN, and that has been a huge success for vendors who engaged partners. UCaaS players who are going all-in with the channel have been thriving, too. As far as the next opportunities, we are starting to see forward-thinking solution providers building practices around security and IoT.

One [opportunity] that I haven't heard many people talk about is everything moving from hardware to software. We believe the future is commodity hardware with software functions on top of it, and that requires a different level of expertise. That would be a huge opportunity for partners and I don't know that I've seen a lot of focus there yet.