Comindico opens a channel

Although late to the party, the Tier 1 telecommunications company is running its first channel drive in conjunction with network-focused distributor LAN Systems and its own network infrastructure provider, Cisco Systems.

Since it inception in September 2000, the company has been plagued with problems, the most high profile being a protracted dispute with Telstra over interconnection that delayed its launch. It has spent $370 million building a national IP network and late last year secured a $70 million funding injection from shareholders.

Speaking to CRN, John Stuckey, CEO at Comindico and former head of ISP Connect, said one of the company's major problems early in the piece was having the right staff. 'It [Comindico] was going to be everything to the wholesale and channel market – it was going to be the network and everyone was going to sell it.

'The trouble was if you were to do it again, you probably wouldn't build an IP network with a telco team,' he said. 'The difference between [telco] people and IP people is religious,' he said.

'The IP world requires more intelligence than the telecommunications world. This was the opportunity to be a pure IP player – it had the blueprint and everything but it just didn't have the right staff.' When Stuckey joined Comindico it was racked with troubles 'in terms of funded networking stability issues', he said.

Since then, the company has sold its services direct, trialling a sales force of 20 staff, but quickly realised it needed to build a channel base. 'We went into direct and we couldn't expect channels to sell something that we couldn't sell. How can you go to the market with a channels product if you can't prove that you can do it?

'We employed some reps but always knew full well that we needed a channels program because with a 66-node network, how in God's name are you going to be able to cover the opportunity it creates? I'd have to have a sales force the size of Texas,' he said.

Under the program, resellers and integrators would sell four different types of Comindico-branded DSL services: QuickLink 1, a 256/64Kb/s DSL VPN supporting up to five users; QuickLink 2, a 512/128Kb/s DSL VPN for small offices; QuickLink 3, a 512/128Kb/s DSL VPN for companies with up to 20 users; and QuickLink 4, a 1.5/256Kb/s DSL VPN for offices with over 20 users. All packages offer unlimited data downloads. Comindico will tap LAN Systems' 1,500-strong reseller channel for the new program.

Resellers would receive 10 percent annuity commissions for sales with Comindico taking care of customer support issues, Stuckey said.

'If I can pull 40 to 50 percent of my revenue for this company out of channels for the next 12 months I'll be a happy man,' Stuckey said.

Carl Braden, director channels and alliances, said the company is targeting lower end resellers who 'probably don't have the resources' to commit to the big programs that 'we're seeing some of our competitors are going to market with'. 'There are no barriers [to entry],' he said.

To reduce channel conflict, the company intends to publish a list of 500 named enterprise accounts it will service direct. 'We're going to continue to work in the corporate and enterprise because those people want a brand name, they're not necessarily happy to work with a channel. Yet at the other end of the market [SMEs] they probably want a trusted partner,' he said.

However, the company will also look for resellers who are able to take the step up to the enterprise market as an extension to the program. 'It's the beginning of a large campaign,' Stuckey said.

He said the company's direct sales force is 'going to completely vacate' the SME section of the market. 'The commercial reps we had in that space, we're pulling out. What we've done in wholesale is proved to us that we don't need to have a direct sales force [at the low end],' he said. Revenues in Comindico's wholesale business have quadrupled in the past 12 months, he said.

Braden said the program takes VPN technology to a segment that has not had access to these types of products before.

Stuckey added that the company needs to get its channels working in the VPN space, so by the end of the year, the company can recruit its channels to sell voice products as well. 'We want to be the best wholesaler and we want to have the best channels. We are religiously different to the telcos – we basically think it's a network – “Get out there and sell it”,' said Stuckey.

The program is being launched this week. Campbell Travis, former sales and marketing manager at NetForce, has been working as channels marketing manager at Comindico for the past five months. He previously worked for IT distributors Siltek and ITG.

Commenting on the deal, LAN Systems' managing director Nick Verykios said there will not be any channel conflict as a result of this program because Comindico and the channel partners 'aren't going to touch each other'.

'We haven't done it before [with other carriers] because it didn't make any sense. They [resellers] are not going to lose the deal to the vendor at the end of the day, that's the difference,' he said.

Verykios said the bundle was a 'very buyable product and a cost saver for business'. He said it was created through a lot of consultation with the distributor and its reseller partners and was designed not as an afterthought.

'I had to be convinced – when I saw it being developed with our guys I knew it could work. I was a bit “Here was go again” in the beginning,' he said.