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Sunday, July 30, 2006

New Verizon Discount Program Might Hurt Solution Providers

Verizon Business recently started offering a new discount program for network data and voice solutions. Sold directly to customers, this program may cut out some business for solution providers.

This program, the Verizon Client Advantage Program (VCAP) presents customer with unbeatable prices on total network solutions, and solution providers and others have stated they have been unable to compete and have been losing bids to VCAP. The solutions offer the carrier’s services plus products from other major vendors, including Cisco Systems, Juniper Networks, Nortel Networks, 3Com and many others. Customers can also include outsourced IT solutions, managed network services and even call center and help desk services as part of the plan.

While VCAP was not announced publicly by Verizon Business and information about the pogram isn’t even listed on the website, solution providers have experienced first-hand the competition and have noted vague mentions of the program by Verizon spokespeople. Some solution providers heard about VCAP earlier in the year when involved with some of the companies working with the VCAP program, like Juniper Networks. Many solution providers have noted that on the surface they have seemed to be on the verge of winning many deals, but then at the last minute have found themselves losing to Verizon. VCAP is reportedly the first formally crafted deep discount program offered by a service provider in the solution provider market.

VCAP has offered discounts to over 40 New Jersey schools, including Rutgers, Seton Hall, Rider and Mercer, and relationships with these schools has allowed the company to position itself ahead of solution providers in the channel. While deep discounts are not new phenomena for equipment in solutions, this new offering has allowed the bids to go way lower than solution providers can afford. Because of huge amounts of resources, carriers like this can bid so low that they can take an initial loss and gain it back in service payments. The deals are re-crafted until Verizon and other major companies like it win.

Networking vendors such as Cisco and Juniper have struggled with conflicts with solution providers and service providers for years, but recently the struggle has grown worse.

Added By: Computer Consulting 101 Professional Kit