Bulked-Up MegaPath Charts Course For Channel Growth

It was one of the more eye-opening telecom M&A deals in a year full of them: a three-way merger, completed in early September, of MegaPath, Speakeasy and Covad into a single company. What it means is that MegaPath, the new company, can offer a full portfolio of voice, access, private networking, managed security and services solutions focused on large enterprise, SMB and wholesale accounts alike, and to hear Bruce Chatterley tell it, more and more of that business is going to flow through the channel.

Chatterley, formerly Speakeasy’s CEO and now President of Business Markets at MegaPath, sat down with CRN Networking Editor Chad Berndtson at this week’s Channel Partners Conference & Expo in Washington DC, to talk about MegaPath’s embrace of the channel and how he sees MegaPath getting to 50 percent indirect business in the next few years.

Let’s talk about the merger: mutually beneficial for all three companies, why so for your individual channels?

At the 50,000-foot-level it’s very complementary. We have complementary customer segments: Speakeasy historically SMB, MegaPath historically focused on very large, distributed, geographically dispersed enterprises, and Covad focused on wholesale. So when you combine those businesses, you get synergistic customer bases, and also some key synergies of technology.

What we’re trying to do is create what we call a managed services local exchange carrier: lead with applications and value-added services and use the underlying network to differentiate the delivery of those. That means that things like VoIP, for example, get delivered in a tightly integrated way with quality of service, and our broadband connections providing access to things like cloud computing services through MPLS VPN and other secure network-based solutions, so that you can be certain your access to your data is secure and not available to the public internet.

And so, there are various application synergies and through the combination of three companies, we can leverage two things from a reach standpoint: through Covad, we have one of the largest facilities-based national networks in the country, with 4,500 colos (colocation centers) nationwide. Through MegaPath, historically focused on geographically dispersed enterprises, we can, through a series of partnerships with other carriers, reach every nook and cranny in the U.S. The three businesses together have much more profit-generating capability as well as revenue-growth potential.

The other thing is that each of these three companies come from a history of customer- and partner-centricity. When you look at Speakeasy and MegaPath, about 30 percent of our total new orders on a monthly basis are derived from partners. We’re going to take that base and leverage it from an effort over the next six months to reach out to partners and build out the interface for the company. How do you want to interface with the company? What are best practices in terms of tools? We’re going to build that out. One of the upsides of integration is that you take three partner programs and do new development versus companies that have an established program they can’t afford to hit ‘reset’ on. We have the opportunity to create a unique interface.