Adventures in DistributionBy Pedro Pereira | Posted 2008-04-01 Email Print
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As the channel evolves and pressures intensify, distributors have an opportunity to take a leadership role.The term "distribution" doesn't exactly inspire the kind of enthusiasm that, say, a new Apple product tends to generate. Far from it.
Nevertheless, a couple of developments in IT distribution this week indicate that some reasonably interesting activity is afoot in the channel's pick-pack-and-ship zone. And the timing is potentially fortuitous, in light of some concurrent developments that may require distributors to take more of a leadership role in the delivery of IT products and services.
The first development worthy of note is the announcement by Arrow's Enterprise Computing Solutions group that it is launching an aggressive midmarket play.
is intended to capture a bigger piece of a market that Arrow rivals Tech Data
and Ingram Micro also have been working hard to keep within their domain.
Traditionally, Ingram Micro and Tech Data have kept a strong focus on the VAR channel, primarily dedicated to small businesses, but in recent years the world's two largest distributors have been emphasizing solution selling and services to become better entrenched in the midmarket channel.
Arrow's midmarket play potentially intensifies competition between the three distribution powerhouses.
But lest you go thinking all the action will affect only those three, consider the Synnex wild card. Synnex, which had its humble beginnings as a components wholesaler, has become one of the world's largest distributors, but has remained relatively low-key.
The company announced a major milestone March 31: CEO and founder Bob Huang will retire in November. Synnex has hired former Ingram Micro President Kevin Murai to act as co-CEO until November, when he will take the reins by himself.
Murai was careful to say he has no plans for major changes at Synnex, but it's hard to imagine he won't apply what he learned as one of Ingram Micro's top executives to his time at Synnex. Huang has kept a tight rein on the company, eschewing trends in favor of a more conservative, quiet approach to running the business.
But as pressure increases on distributors to stay relevant in a shifting channel economy, Murai may take a more aggressive stance. He may want Synnex more involved in such evolving channel models as managed services and software as a service, and in fulfilling the need for a tighter link between distributors and solution providers in creating end user demand.
At the least, he will feel the pressures to do so.
After all, these pressures are behind Arrow's midmarket moves. In addition to offering end-to-end solutions its channel partners can sell to end users, Arrow also is looking into how it will play in managed services and how it will work with solution providers on marketing and creating demand at the customer level.
While in the past solution providers wanted to keep distributors away from end users for fear of being bypassed, that fear is almost nonexistent now. Distributors ship most orders directly to customers on behalf of solution providers, anyway. And rather than using that information to bypass providers, they are instead figuring out how to apply that data to marketing and demand creation.
And providers want distributors to do just that because they realize they need the help.
What this all means for distributors is that rather than become irrelevant by focusing only on their core business of stocking and shipping, they have an opportunity to display some leadership in where the channel goes from here.