Intelisys President Mark Morgan meets with Comcast SVP of Indirect Channels, Craig Schlagbaum, to have a conversation about adaptation, communication, and the immense opportunities stepping into the new workforce.
Mark: Okay. Hello, everybody. I’m Mark Morgan with Intelisys. Today I’m going to be sharing a conversation with Craig Schlagbaum of Comcast. Craig, how have you been?
Craig: Hey, Mark. Great to be here virtually. We’ve been doing a lot of this. I’m getting used to it. I’m becoming a pro on video remotely, but it’s good to be here. Good to share some new thoughts and ideas with you today.
Mark: Yeah, that’s true. I think this is probably our third or fourth or fifth video conversation, so we’ve had more conversations in the past couple of weeks than we did in the 90 or so days that I’ve been here. Let me ask you a couple of questions. One, how’s it going? What are you guys seeing going on? How’s your business doing? How do you see the partner community? How’s the situation unfolding for you guys?
Craig: Well, like everyone, certainly it’s challenging right now for us, but the good news is we’re in an industry and in a business that’s an essential element to people being able to conduct business remotely. I think if we didn’t have such technology as we have today, what a different world it would be. Our products really make a difference in people’s lives, both on the residential and the business level. We have still seen some good enterprise-level success, and that’s good news. Those sales have actually been very robust.
The SMB side, obviously because of what’s going on with COVID, there’s certainly less activity going on because companies are closed down right now. The good news is we’re, even now as some states start open, starting to see an increase in those sales. We had the best SMB sales we’ve had in the last three months across the company and in our team as well. We’re also starting to see some really good traction in the fiber space with enterprise customers. That’s a snapshot, but it’s good to be in a place to help companies operate in a time like this.
Mark: Yeah, that’s a good point. You and I had conversations early on around where we might foresee some challenges at the end user level and what the impact on our partners would be. What are you seeing around, as businesses potentially are moving towards more workers going remote? What are the opportunities for partners to sell more services that Comcast offers? Are you guys getting creative around literally taking business-to-business services residential and continuing to evolve the channel? What are your thoughts on some of those opportunities?
Craig: Yeah, there’s some great points there, and yeah, there are a lot of things that we’re doing from a work-from-home environment. You’ll see some very robust promotions coming out, actually today. I can’t talk about them, but they’ll be out publicly for the channel to sell. Certainly, as customers go home and work from home like you and I, there’s a number of Comcast services, particularly our business internet service, which is an SLO, service level objective, service. It’s not SLA, but it’s very robust. It has static IP associated with it, an additional service contract that allows you to get better support 24/7. It’s just a little bit better bandwidth service.
Then if you want really an SLA-based service, we can provide ethernet at home, and we call it Ethernet @Home, and it prioritizes the packets to individuals who need absolute priority, because certainly if you’re doing enough Teams and Zoom conferences like I am, you’ll notice some degradation in the service if you’re using a residential internet service. With Comcast, we’ve got our Ethernet @Home offering, and that’ll be bolstered by some other services. You’ll see some bundle offerings that we’ll be offering.
At the same time, companies of course are upgrading servers and the bandwidth to get to them. That’s where we’re actually seeing a lot of traction too on the traditional side. We’re seeing some very massive deals in the healthcare space, as well as in banking and financial, that we didn’t see before. Some of the largest deals we’ve ever done actually have come in the last few months. Those are exciting things, but at the home environment, certainly those are new offerings that you’ll see come out and we’ll be promoting aggressively.
Mark: Yeah. We’re looking forward to, one, some of the changes that are coming on in the channel. I think together, you and I have discussed potentially putting some bundles together that include remote workforce solutions, that might include not only things such as Microsoft, but also some of the devices required to get this deployed. Let me ask you, do you think this is a moment in time? When we made the acquisition of Intelisys back in 2016, there were a lot of people in the supplier community excited about, one, ScanSource being involved, but two, potentially access to a broader channel of traditional IT VARs. Do you see this as a moment in time that VARs should really jump in and participate in selling your services to their customers today?
Craig: Yeah, that’s a great question. I think absolutely I do. It’s the perfect storm. I’ve been waiting 20 years to see something like this. I didn’t want this to happen, but certainly it’s been somewhat serendipitous, in that we’re allowed now to consider new models. As a VAR or an MSP, you’ve got things to consider about cash flow issues and how much cash on hand you have to operate. In an agent model, you’re really just selling and earning commissions, and you don’t have the issue of bad debt. You might lose your commission if the customer’s not paying their bill to Comcast or our competitors, but at least you’ve got income on all the customers that are.
I think it’s just a little bit of a different kind of model. You’re seeing a lot of penetration with UCaaS, with connectivity, with SD-WAN. These kinds of services are all being sold on an agent-based model. I do think … in fact, not think, but know … that MSPs especially and VARs are reconsidering some things, because this is a way to bolster their bottom line through the sale of the assetless, gross margin-type products like ours where they can enhance their capabilities. You know, maybe it’s a blend. They do some things traditionally like they always have, but then they add in some agent-based offerings and bolster their bottom line. It’s never been a better time to consider that than now.
Mark: Yeah. We’ve seen a significant amount of interest from a lot of the channel that has not proactively sought out services. I think from our view, it’s directly related to the fact that a lot of end customers out there, when this hit, they may have felt like they were prepared, and they realized as everybody went home that they weren’t quite prepared for it. Coming out of this, we’ve spent a lot of time. You and I’ve had a number of conversations. We’re spending a lot of time internally with both Intelisys and ScanSource and our resources, meaning our technical resources for one. We’re expanding the number of people that are going to be able to support the increased demand coming out of this.
Where do you see key accelerated opportunities once we all truly go back to work, whether it’s in an office, or really the point there is when the country gets opened back up to near 100%, where do you think the key opportunities are and what should people focus on almost immediately coming out of this?
Craig: Yeah. Well, I think there will still be a perpetual work-from-home initiative. I know our own company is going to see a lot more people working from home, even post all of this. I think there will be others like us that are doing that as well. Any partner that can help any company operate that way will be benefiting from that through the sale of connectivity services, UCaaS, conferencing, SD-WAN. All those things can be offered as at-home services for businesses.
At the same time, they’re going to have to bolster servers and connectivity into larger environments where banks and where healthcare facilities have been operating. That’s going to continue, I think, but the partners need to help guide those customers to how they can operate the most effective way in the new environment that we’re going to. It’s the ability to put together multiple vendors, because Comcast will certainly be able to provide a lot, but when you add on other complimentary vendors that have services in other spaces, then you as the partner really benefit, and you can help your customers get the right solution for them and make quite a bit of money, I think.
I’m bullish in that I think things are going to come back. There are certainly going to be areas that are going to be struggling for awhile, but there’ll be other areas that are going to be very vibrant and are going to want to invest, and are going to want to spend money and try to be more efficient in the new world model. I’m excited for what happens as we move out of Q2, start moving into Q3, and we’re already starting to see signs of growth, as I said earlier. I’m excited just from our lens that there’s some optimism for what’s going to happen in Q3 and especially Q4.
Mark: One last question for you. What are some of your guiding principles that have helped you and your team to get through this challenging environment that we’ve been living in for the past 90 days almost, now?
Craig: Yeah, it’s tough. I’ve had to communicate more than I ever have, and my team probably doesn’t like that because I can reach them now immediately. This is a good way of operating from the standpoint of communication. In some ways it’s been better in that we talk more to each other than we ever have, but we’ve also had to be nimble. There’s an expression. I certainly didn’t create it, but life isn’t about waiting for the storm to pass, it’s about learning how to dance in the rain. That’s what we’re doing right now, is learning how to dance in the rain.
These are big challenges, in some cases extremely so, and how to operate in that environment demonstrates your true mettle of how good you are as a leader. I think if you can endure that and demonstrate how you operate and still persevere through it, it’s not only what it’s about in the short term, but it’s what life’s all about. I tell my team that too. That’s a big focus area for us, and trying to be effective in a very challenged environment.
Mark: That’s a great point. We did an impromptu survey of our team across both ScanSource and Intelisys, and we’re seeing that on average, our team is working three to three and a half hours more on a daily basis. Everybody’s getting creative in the way that they’re coping. Everybody’s getting creative in the way that they’re making sure to use everybody’s time wisely. We spent a lot of time thinking about how we’re going to, and what’s the best model to support our partners coming out of this. How do you see your team as we move out of this? What will they do differently compared to what they did before, as we start to engage partners in what is close to what we’ve been doing over the past 20 years?
Craig: I think we’ve always been accessible and available to our partners, but now it’s funny. Comcast, we never really used Teams hardly at all. We had it across the whole company. Now we’ve got hundreds of thousands of users a day operating this way. I think we’re going to be more available to our customers, to our partners, to help them win deals and be Johnny-on-the-Spot, so to speak, to really work with them. Not that we weren’t before, but having a video ability to connect is solid, and working with them to build new solutions, new ideas, new ways to operate, and be more effective for their customers.
We’ll be able to help them do that along with ScanSource and Intelisys together, and put together solutions that are very compelling. They’re going to need them to be more effective, because people are going to have to be more efficient than they’ve ever been to get through some of these struggles, especially small businesses that have been harmed by this. Our partner managers will be working with their respective partners and agents underneath you to do those things, and to help them be more effective and to help them win.
Mark: Perfect. We’re looking forward to that moment in time. It feels like we’re getting closer, and it’s always good to talk to you. Thank you so much. We appreciate your partnership.