Partners: Verizon's New CFO Could Open New Opportunities For The Channel
A new CFO at telecom giant Verizon could help the carrier maintain its position in the wireless market and continue to make headway in new areas such as the Internet of Things. But while industry analysts don't expect Verizon's overall financial strategy to change, new leadership could present more opportunities for the channel, according to Verizon partners.
Verizon last week said CFO and Executive Vice President Fran Shammo will retire by the end of 2016 after 27 years at the carrier. On the same day, Verizon announced that Matthew Ellis, the carrier's current senior vice president and CFO of operations and finance for its wireless and wireline division, will succeed Shammo Nov. 1.
"This is a complex business and Mr. Ellis is assuming the helm at an interesting time, so he'll have some challenges on his hands," said Adam Edwards, CEO of Sandy, Utah-based master agent Telarus, a Verizon partner. "To sit in the seat of CFO at Verizon today, you'll have to understand new business [units], and I really hope they embrace the channel."
As of late, the Basking Ridge, N.J.-based carrier has been heavily focused on new revenue streams, including the Internet of Things and digital media, as evidenced by its recent acquisitions, including its $4.8 billion purchase of Yahoo and a $2.4 billion deal to buy Fleetmatics.
Combining those businesses won't be easy, according to Telarus' Edwards.
"This is a lot to take on, especially with companies that are not thriving and are actually in decline, like Yahoo," he said. "It's going to take a lot of skill in an area that is foreign to Verizon."
According to Verizon, Shammo was responsible for the carrier's strategic planning and financial transaction services, among other things. He was instrumental in building up Verizon's focus on network investment, as well as its acquisition strategy, which included the recent AOL, Fleetmatics and Yahoo transactions that Verizon hopes will position it for growth in mobile video and IoT.
Upon the announcement of his retirement and the elevation of Ellis, Shammo said in a statement: "For Verizon, 2016 has been a significant transformational year, and I will leave knowing that the company is well-positioned to deliver on its strategic initiatives."
In addition to new areas such as IoT and mobile video, Verizon also must continue to stay competitive in the wireless market -- an area in which more solution providers are starting to show interest – as well as the wireline market. Verizon has been losing ground in the wireline space, a core revenue driver for the carrier, Edwards said. The carrier's CFO and financial team must figure out how to replace revenues in these stagnant areas, he added.
"As TDM (time-division multiplexing) products are retiring, revenues are in decline right now, which will be another challenge for Verizon," he said.
An executive with Atrion Networking, a Warwick, R.I.-based IT solution provider and longtime Verizon partner, agreed that it's important for Verizon to remain a leader in the wireless and wireline market, and he believes the carrier will continue to innovate.
"I’d love to see Verizon Wireless and Verizon Business come closer together, where there would be an environment that business customers could leverage their wireline and wireless spend together to gain better discounts and perhaps obtain more services," said Darryl Senese, vice president of carrier services for Atrion.
An important weapon in Verizon's arsenal is its channel program, and to help new executives grow the company in new ways, Verizon should tap its partner community, Telarus' Edwards said.
Some carriers have attempted to "cut out the middle man" by working directly with business customers instead of paying a channel partner a commission. But businesses like having a relationship with a trusted adviser -- the solution provider – so carriers like Verizon have warmed to the channel, but there is still more work to be done, he said.
Atrion's Senese believes any new CFO should welcome the influence partners have had on Verizon's top-line revenue.
"I think Verizon’s strategy and positive perspective around the partner program will only increase, as the results the partners have driven over the last [three] years have been strong," he said.