More Vendors Tapping Distributors to Reach SMBs

By John Hazard  |  Posted 2006-12-01 Email Print this article Print
 
 
 
 
 
 
 

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The number of vendors tapping two-tier channels has risen more than 30 percent since 2003, and industry sales figures are reaching those of the dot-com days, according to the GTDC.

Eight hundred vendors are now sending products to market through two-tier channels, up from 600 just three years ago, according to the Global Technology Distribution Council.

Distributor Track, a data service provided by NPD Group, followed 800 vendors using member distributors in 2006, during which time those distributors logged record sales and transaction figures not seen since the build-up preceding Y2K and the dot-com boom.

Click here to read more about the growth in IT distribution in 20006.

The distribution surge can be explained in part by a trend among manufacturers and publishers of enhancing "channel programs and distributor partnerships to bring this 'new wave' of solutions to the small-to-midsize business (SMB) market," the GTDC said in a report on NPD Group's numbers.

To reach the market, vendors are also sending a wider variety of products through two-tier channels, including mobile computing, handheld devices, telephony, storage, advanced security applications, and high-bandwidth wireless connectivity and services, the organization said.

Click here to view exclusive channel research from Amazon Consulting.

"IT distributors have also embraced a new services paradigm," said Tim Curran, CEO of GTDC. "Managed services, for example, are now available through many distributors, enabling or facilitating the delivery of network-based applications, hosting and access programs. This is all part of the new frontier within the changing landscape. Solution providers and vendors are working with distributors in profoundly different ways to generate and respond to end-user demand."

Among the figures the GTDC found notable:

  • over 5 million inbound calls annually
  • over 50,000 individual customers monthly
  • over 150 million items shipped each year
  • over 2 million configuration line items annually
  • over 100 million software licenses each year
  • over $5 billion of credit extended to the channel
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