Distribution Comes of Age in the Cloud

As a vehicle through which IT products have been acquired and ultimately delivered to end customers, distributors have long played a pivotal role in the channel. With the rise of cloud computing, the way IT products are consumed is fundamentally changing. Those changes, however, are not so much eliminating the need for distributors as much as they are altering the mechanism through which they now deliver IT products and services.

Case in point is Ingram Micro, which earlier this month announced plans to acquire the Odin cloud computing platform from Parallels. The existing Ingram Micro Cloud Marketplace has already been built on the Odin platform.

As cloud computing continues to evolve across the channel, it became apparent that owning the underlying cloud platform on which the Ingram Cloud Marketplace is built had become pivotal, said Renee Bergeron, vice president of global cloud computing. Ingram Micro wanted to have more control over which features are going to be added to an Odin platform, which is also currently used by a number of other vendors to deliver cloud services, Bergeron said.

“Odin is at the heart of our cloud strategy,” said Bergeron. “We wanted to be able to control the software road map.”

As a result of the Odin acquisition, Ingram Micro gained access to a number of telecommunications carriers and hosting companies through which it hopes to resell additional products and services while also picking up several hundred software engineers with extensive cloud computing experience who previously worked for Parallels.

Ingram Micro is not the only distributor moving to reinvent itself in the age of the cloud. Tech Data has built out its own Tech Data Cloud.

Distribution Helps Partners Achieve Scale

Solution providers across the cloud have come to recognize that cloud computing represents a significant opportunity for them to increase the size and scope of their businesses, said Stacy Nethercoat, vice president of the TDCloud unit at the distributor Tech Data. The challenge, though, is that not many of them have access to the capital required to deliver cloud computing services at scale.

“Partners recognize that in the cloud they need to achieve scale,” she said. “For many of them, distribution is the only way to do it.”

Channel partners have longed relied on distributors to augment the services they deliver, noted Tim Curran, CEO of the Global Technology Distribution Council (GTDC), an industry consortium representing the global tech distribution channel. The cloud now creates an opportunity to expand the portfolio of services that distributors can offer.

“Distributors are outsourced providers of both products and services,” said Curran. “Leveraging distribution has always been a balance sheet argument.”

Ultimately, solution providers in the age of the cloud may become even more dependent on distributors. At a time many partners are struggling with the impact cloud computing is having on their balance sheets, the ability to leverage distribution services in a way that enables them to better preserve their own cash flow is now often more critical than ever.

How that changes and ultimately alters how solution providers need to structure their own businesses remains to be seen. However, as the delivery of IT products and services gets more automated in the cloud, the simpler it becomes to deliver products and services at levels of unprecedented scale. That is, assuming, of course, the solution provider has both the means to deliver them not only wherever a customer wants, but now just as importantly, whenever that customer decides they need them to be available.

Michael Vizard has been covering IT issues in the enterprise for more than 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.