The Changing Landscape of IT DistributionBy Howard M. Cohen | Print
NEWS ANALYSIS: Distribution execs see comprehensive solutions and partner support as key to a successful future for themselves and channel partners.
According to Synnex Senior Vice President for Marketing for North America Bob Stegner, "Some vendors push to go to distribution because of the value we can add, not only in the way of services, but the complementary technologies, both hardware and software, that make up the total solution."
Distribution provides pre-sales tech support, attach support, services opportunities and contact management as well as billing. "Many resellers want to bill their customers directly, which they can do through us," Stegner said.
Relevance in the Cloud
Many analysts have questioned whether distributors can develop and maintain relevance as resellers shift increasingly to selling cloud-based solutions.
Distribution executives, past and present, see their value remaining consistent as the cloud continues to grow in the market.
"Distribution in its purest sense," Peterson explained, "is being able to aggregate a broad portfolio of solutions. Multiple server vendors, PC vendors and more. Distribution becomes the rally point. Resellers gain value by being able to access a broad set of solutions. For distributors, the value is in providing a broad selection of cloud solutions, and it's all around providing best-in-class solutions. For example, the best Internet service provider is Amazon because they have a broad portfolio of solutions."
Ingram's Bay observed, "Cloud offers distribution the chance to add new and different value for our channel partners, both solution providers and vendors."
Emphasizing the importance of complete and comprehensive cloud solutions for resellers, Bay added, "If you are in the cloud business successfully, you are representing multiple solutions and multiple vendors—and scaling that is difficult to do without support. That's why we've found that our partners value the deep experience we bring to cloud technologies, in particular the operational platform we have in place."
Recent estimates put Ingram Micros' annual cloud revenue at about $200 million, relatively small in what has been widely estimated as a multi-billion dollar business. Clearly, there's much more room to grow.
"The channel will continue to be a very strong and viable entity," predicted Peterson. "There's a major transformation going on in how people want to receive their IT, leveraging cloud versus physical assets. This will make the interdependency and synergy between reseller and distribution extremely valuable."
Over the past 20 years, the "channel" has polarized, with product sellers at one end and consultative service providers at the end. Many channel partners still embody some of both. The next polarization predicted by many is a clearer separation between those resellers who focus on Fortune 500 customers and those who focus on the small and midsize business (SMB) market.
The emergence of channel partner groups—such as the SMB Nation, the membership of the Computer Technology Industry Association and others—demonstrates that this is already taking place.
The early resellers were highly innovative and fiercely independent. When Ingram Micro and Tech Data first led the transition from aggregator to distributor, many likely did not foresee them providing the rich diversity of business and technology support services they do today, but now resellers choose which distributors to align themselves with, based to a great extent on those services.
"Distribution must step up to educate the channel and leverage our global view to identify opportunity and then deliver on the necessary resources to turn that into successful business growth for partners," Bay said. "We will continue to be making investments in the assets and services our partners need to drive success for their end-user customers, such as we're doing with professional services now."
Ending on what he feels is the most important point of all, Bay concluded, "Regardless of the changes in our industry, none of us will succeed standing alone; we cannot keep up with the rapid evolution of our industry without building relationships between vendors, distribution and resellers based on trust, and then pushing each other to embrace change."
Howard M. Cohen is a 30-plus-year IT industry veteran who continues his commitment to the channel as a columnist and consultant.