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Distributors Fit for Managed Services

As channel companies continue to march toward managed services and utility computing, some have questioned the role of distributors, which traditionally has been to configure and ship hardware and software to customers. Where does the “configure and ship” model fit if the solution is delivered remotely and configured continuously? Not surprisingly, distributors are hunting for […]

Written By: John Hazard

Apr 6, 2006

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As channel companies continue to march toward managed services and utility computing, some have questioned the role of distributors, which traditionally has been to configure and ship hardware and software to customers.

Where does the “configure and ship” model fit if the solution is delivered remotely and configured continuously?

Not surprisingly, distributors are hunting for a square hole in managed services that fits its square peg.

Justin Crotty, vice president of channel marketing at Ingram Micro, the nation’s largest IT distributor, believes distributors’ ability to aggregate resources and their trusted position between vendors and VARs leave them well-positioned to build and centrally manage the infrastructure of managed services.

“[Distributors] have the opportunity to make it more efficient and more profitable for providers and manufacturers,” Crotty told ChannelInsider.com at Ingram Micro’s VentureTech Network Spring 2006 this week in Montreal.

“You have to ask, ‘What is the distributor’s value in hardware and software?'” he said. “It’s the ability to apply an economy of scale and aggregate it to fragments of the market. The same exists in managed services.”

Many MSPs (managed service providers) are trying to do it alone, making their own infrastructure investments, such as NOCs (network operation centers), which Crotty equates to a VAR operating its own warehouse, a common practice in the early 1980s.

“Why would you spend resources to duplicate infrastructure that already exists in the market?” Crotty said. “Infrastructure can be managed centrally, and the value of the MSP is not altered.”

Vendors and third parties, such as True North Technologies, are offering centrally managed MSP and utility infrastructure, but many in the channel are wary of turning over customer information and relationships to outsiders, a prohibition distributors surmounted in the 1980s, when they became warehouses to the VARs, Crotty said.

“There is no [channel] black or white with us,” Crotty said. “We are all channel all the time.”

Distributors Fit for Managed Services

John Hazard

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