UCaaS For MSPs: Why The Reseller Model Wins In the Long Run

‘Partners that own the contract and handle billing are far more valuable in the long-run, and you can also bundle additional services with UCaaS,’ Intermedia COO Jonathan McCormick tells partners at XChange 2019.

The reseller model is the best -- and most profitable way -- for partners to go-to market in the unified communications as a service (UCaaS) space, according to business communications provider Intermedia.

The expected size of the UCaaS market is expected to balloon to $43 billion and "the reseller model is a great way to get after it," said Intermedia's COO Jonathan McCormick at XChange 2019, hosted by CRN parent The Channel Company.

Solution providers that value owning their customer relationships sometimes shy away from selling UCaaS because many UC and communications providers work with partners in an agent model, where partners give the vendor their customer referrals and earn commission on the contract. In this model, they often are not handling support or billing.

While Intermedia will work with partners in an agent model, the MSP model is better for channel business in the long-run, McCormick said.

"The customer is your most important asset after your employees," McCormick told solution providers.

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The reseller, or MSP model, not only lets partners keep their all-important customer relationships, but it also gives solution providers more topline revenue and profit.

"It's a defensive move -- if you don't play in UCaaS, someone else will come in," he said. "Partners that own the contract and handle billing are far more valuable in the long-run, and you can also bundle additional services with UCaaS."

While the partner will own the customer relationship, Intermedia handles telecom taxation, a factor that can complicate communications sales and keeps many solution providers out of the UCaaS space, McCormick said.

Another reason solution providers aren't selling UCaaS today is because of vendor lock-in concerns.

Computer Cats, a Colorado Springs, Colo.-based MSP, is working on providing everything its customers need as a service, including hardware as a service. Today, Computer Cats is offering hosted PBX and collaboration tools like Slack and file sharing to its base of small business customers. But adding UCaaS to the portfolio is a "no brainer" for, according to Andrew Faulkenstein, owner of Computer Cats.

However, lock-in is a major concern for Faulkenstein and his company. "I don’t want to be locked into one vendor's ecosystem. Having one place to go to makes me a little nervous," he said.

Intermedia avoids lock-in by working with partners and end customers on a month-to-month basis. "We do it this way because it drives the right behaviors within our company. We have to earn business every single month," McComick said.

And it’s valuable for partners because they aren't talking on the same risks with customers as they would in a long-term contact.

Intermedia announced on Monday that it has acquired Telax, a cloud contact center specialist. The deal, said McCormick, is helping Intermedia on its path to becoming a full-service communications provider for partners and end customers. Intermedia partners now have access to an integrated UCaaS and contact center as a service offering, or resell CCaaS as a standalone offering.