Nitel, a telecom service provider turned Network-as-a-Service (NaaS) technology provider to solution providers, is making moves. The Chicago-based company at the end of 2021 was acquired by U.K.-based private equity firm Cinven and since then has been transforming from an aggregator of network elements for U.S customers and connectivity to a global Network-as-a-Service specialist that offers managed services, SD-WAN and layered security.
To top it off, the company now has a new chief revenue officer: Scott Peterson, former Extreme Networks’ channel chief and telecom veteran turned Nitel’s CRO who joined the company earlier this month. Nitel’s CEO Margi Shaw (pictured) and Peterson recently spoke with CRN about the company’s evolution and how the company is getting comfortable with their newfound success and growth on a global stage in the SD-WAN and SASE arenas, as well as how partners fit in and the critical role they play for the channel-focused company.
The executives also spoke about Peterson’s new role and Nitel’s message to existing and prospective partners. Here are excerpts from the conversation.
How has Nitel evolved from a telecom service provider to a NaaS specialist over the last two years?
Shaw: Nitel, under its founder-owned and operated model, we really led with a value proposition of being able to aggregate network access elements from all over the country at a very compelling price point. Over that time, add into that some really strong [network operations center] NOC-related support models, some proactive monitoring, and then eventually, we were adding in firewalling, SD-WAN and managed routers. It was a pretty straightforward model.
The one thing I think that’s been really a strength in the decision-making for the founders was to kind of stick to our knitting, to focus on the network, focus on the quality of the service around the network access, as well as the performance of the network. Instead of grabbing everything out there that could be available to sell to the customer and be mediocre in a lot of different stuff, we decided to really focus in wide area networking and network performance and make that the really crystal-clear strategy for the business.
When we were acquired by Cinven [in 2022], it was really great because they did loads of research before and after the acquisition and what they found is that they really liked the fact that we had a very strong focus within our product line and within the center of excellence that we had created around supporting the business. But they [also] found that there could be a lot of addressable market expansion by taking that value proposition to a global stage.
Cinven is headquartered in London, and they’ve got loads of European investments. Under the Nitel days, we were definitely U.S. focused. We understood the U.S. marketplace and it was daunting to go global, so, we spent most of 2022 [adding] a team that could do global negotiations for us. We went into the global marketplace knowing we wanted to do it well and we needed to provide value by having primary relationships that gave us a cost advantage and an underlying support advantage. So, we’ve completed the phase of all the, what we kind of call the underlay. So now we’re kind of looking at the business and we’re [thinking] about the things that you do as an aggregator, which we’re starting to get comfortable being called an aggregator … there’s a lot to be leveraged in what is called “an asset light model,” where you are aggregating and leveraging investments that have been made in the infrastructure of telecom.
So, we have extended our network globally, we’ve properly built and onboarded very strong relationships with the primary service providers within all these global markets. We’ve also added capabilities for field services, as well as the ability to transact business and bill in multiple currencies, and to deliver equipment globally. That’s all part of the underlay. The aggregation stuff is the underlay.
Then, the intelligence that we’re providing and the enhanced layer of services is what we’re calling our overlay. We’ve built an overlay strategy that will allow us to provide kind of privatized network functionality and application performance monitoring through global SD-WAN infrastructure, as well as global SASE infrastructure. We will have points of presence that will allow us to also provide express ramping to all of the cloud service providers as well and monitor the application performance in the cloud. So, we’re very excited about the global strategy.
Now with that, we are then taking a look at the product line and we’re taking a look at the idea of overlay. Customers are now receiving different devices at their premises that are all designed for a certain function. So, you might have a firewall device designed for security, and then you might have SD-WAN that’s designed for survivability, maybe doing some of your managed Wi-Fi and so forth. But there’s so many devices that a lot of times you can’t get a clearer picture of how your applications are performing. And it’s shocking sometimes. It’s almost like we’ve overcomplicated the ability to get to the data that shows how your applications are performing, which is why you even have this wide-area network.
So, we’re in that process right now and we’ve been in development since the end of third quarter 2023 to build a platform that transcends above all these devices that extracts important data from the network management devices, whether we manage them, or someone else manages them, or you manage them yourselves, so that we can actually now give the customer a more clear picture of the performance of their applications. The first iteration of this new software platform will be available to our clients around the beginning of Q4 2024, so we’re excited about that.
In addition to that, we’ve launched a managed service center because we know that a lot of being a network-as-a-service provider, there’s technology, there’s network access, but the real magic happens with the team of engineers you properly deploy against the right playbooks for your clients in a managed service center. That’s been a huge area of expansion for us as far as adding headcount and building tools.
The last piece of it is just customer success. We definitely talk about it as a business all the time, we made huge investments in people, processes and systems in 2023. And we’re going to continue to invest in customer success and the proper alignment in customer success that not only takes care of the customers, but it takes care of the partner relationships, too.
Tell us about the new CRO role and what are your first set of priorities?
Peterson (pictured): So, I just started as chief revenue officer and [Shaw] and team have done a phenomenal job of setting that up in what I think is an ideal fashion. It includes everything from demand generation and who we are as a brand, through our channel relationships, to end-user retail B2B customers, to wholesale customers through the carriers. And we’ll continue to look at that through new lenses and new ways to expand those wholesale relationships because I think there is still growth there, just like there is in the retail space.
And then customer success is an underpinning and so critical to any CRO’s role. I really have been set up for success by Margi and team. And I’m really grateful for that. Ultimately, the accountability that I have to the organization is to grow revenue and grow revenue beyond the market CAGRs [compound annual growth rates]. Growing at a market CAGR is sort of coasting along — [that] has always been my point of view and if you really want to be a differentiated team and win in the marketplace, you’ve got to outpace that growth, so that’s what I’m here to do … When I heard the story and started to see the actions that [Shaw] and the board have taken to make this pivot in terms of who Nitel is and who they’re going to be in the market, I got really excited about the opportunity.
I think [my experience in networking] helps in a couple of different ways. On the one hand, my friends at the big carriers will be our customers and they certainly are providers to us as well. So the ability to leverage those relationships and understand what good looks like and perhaps have a deeper understanding of what’s really important inside the walls in Basking Ridge [Verizon’s New Jersey headquarters] or other places versus the public, is helpful.
I’ve spent a lot of time in the channel. And if you think about the things we were doing at Mitel and sort of extending that business, and really leveraging the agent model and its expansion into the UCaaS space, those relationships will certainly help here. That model and the channel has evolved in the last couple of years and so I’m excited about that and it appears that things are, let’s say, more rational now, in terms of both the economics and the focus and where value ends up getting to the customer. So I think all of those are great opportunities at the foundation of what I bring, but I’m also really curious about where we can continue to grow and start to expand.
And so [Shaw] and I have already talked about: ‘Are there other routes to market that we’re not leveraging today that might be helpful to us? Are we really tapping into the MSP movement in the most effective way? Have we thought about a play for us around the more traditional VARs, who have not typically wanted to extend their business relationship into connectivity?’ Nitel could perhaps add value on top of their business that they’re already providing.
How big is the opportunity around SASE and SD-WAN for the channel right now?
Shaw: It’s interesting because a lot of these technologies, whether it be SD-WAN or SASE, it’s all about the device that you deploy at the prem[ise] in some ways, obviously they have orchestrators and so forth. And what we’re finding — and this is one of the things that I think is going to be really cool about the VAR community — is what we’re finding is it’s a great opportunity, there’s a great value proposition and we have invested a lot in expanding our product line around the SD-WAN and SASE space, particularly globally.
But one of the things I’ve noticed a lot, in just dealing with real-life situations with customers, is why customers [implemented] something. A lot of times the VAR is the person that either sold or placed the device at the customer’s [site], so they have their own space of how they add value to their customer. And it’s really hard sometimes. It’s almost like competing agendas when you’re a carrier, who’s really counting on your SD-WAN device or your SASE device in order to give you the full range of capabilities for managing the customer. Now, it’s kind of like: “Well, you’ve got your box out there, so how are we going to work together? How are we going to coexist?” We’ve done a really great job building different protocols for coexistence, which is really important to us.
And the one really cool thing I’m looking forward to is, when we talk about our new data analytics software we’re developing, it is designed specifically to co-exist with existing deployments. It’s designed to add value so that we can become a really strong reliable service provider around the network access and the application performance on the network, without requiring us to displace a decision that was already made around a technology that’s been placed at that location. I think that allows for us to have a much stronger value proposition in the VAR world too, because now we’re helping them provide a higher level of service to their customer, maybe above and beyond what maybe they could have done by just using their own devices in the past. So, that’s definitely a place I’m really looking forward to further embedding and integration with customers, managed service providers, as well as VARs.
Peterson: On the one hand, for customers, it sort of extends and simplifies their relationship with their IT stack because they do have a history of having so many of these point solutions that are hard sometimes for them to navigate and really understand how it ultimately is impacting an application. But perhaps in my role and for our growth objectives, the openness we need to have, to not displace a product, to not try to disrupt that relationship, but rather leverage and extend the relationship so that the VAR can ultimately win more business, have more of an ongoing revenue stream with those customers, I think would be very welcome.
I would imagine, the first few conversations we’re going to have, they’re going to be a little bit suspect. But [Shaw] and I have spent our entire careers in the channel and understand pretty deeply where the value lies and you’re going to start to see us in the marketplace, and [partners will] see that partnering with Nitel is not a disruption to [their] business. It’s a way to expand [their] business as a reseller.