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New Business Models, Services Kick-Start Distributors in 2017

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Tim Curran**Editor’s Note: Distributor Report is a recurring column featuring thought leadership from IT and cloud distributors. We’re looking for insights into evolving business models in this new era of distribution, product and technical service offerings, education and training, marketing/branding, credit and a myriad of other services.**

By Tim Curran

When you think of a distributor, do you think of their prolific services expertise, their valuable market analysis, their mobile offerings, or their unmatched vertical solutions capabilities? If not, you should.

Over the last several years, distributors have transformed their business models in many ways to meet the ever-evolving needs of IT solution providers and their customers. The days of distributors acting solely as “pick, pack and ship” machines is long gone. Unfortunately, many still believe – mistakenly – that is distribution’s only core competency. For nearly two decades, naysayers have speculated that distributors would be disintermediated by the “next great thing” – from the direct model, to the Internet, and now cloud – because they were only moving boxes.

With each “threat,” distributors reimagined their businesses, transformed their models, and emerged successfully. Case in point: GTDC members (representing global sales of more than $130 billion through distribution) have added more than 600 new vendors in the last two years. Many of those companies sell nontraditional IT products and services through nontraditional consumption models. The fluidity of innovation has kept distributors not just keep pace but stay ahead of the curve.{ad}

The GTDC recently highlighted 12 business and technology areas in which distributors are helping to transform both vendors and partners in our “Insights into 2017” report. In this first of a three-part series, we’ll look at four ways in which distributors’ big investments are paying off and helping solution providers be more successful:

Advanced Analytics

Business intelligence helps distributors understand partner and customer sales trends, providing valuable insight to better predict business and deliver improved service. Several years ago, that only meant notifications of expiring warranties and cross-sell opportunities based on prior purchases. Today, distributors provide solution providers with a more in-depth understanding of the pricing environment, real-time sales trends, and insight into which customer segments grow faster and more profitably. That allows solution providers to better forecast their own sales and run their business more efficiently.

Services on the Rise

Our “Insights into 2017″ survey of 70+ IT vendor channel executives revealed that partner recruitment, cloud-related services and partner enablement are expected to be the three fast-growing services through distribution in 2017. Increasingly, vendors – including many new to the channel – rely on distributors to find, train and enable new partners — giving solution providers faster access to the latest technologies that help their customers solve real business problems.

Make Way for Mobile

Millennials and end users increasingly have higher expectations for how they want to access data. Their desire to be connected at all times spells great opportunity for …

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… the channel. To meet that burgeoning demand, distributors have cultivated new relationships with carriers and other mobile manufacturers, building a model to serve as a central hub for the recruitment, education, and enablement of mobile solutions. Vendors and VARs count on distributors for mobile-device activation, application loading, security controls and maintenance, according to another GTDC survey. Expect more of the same as mobile solutions branch out to new types of devices connecting to the network.

Vertical Expertise

Distributors have long focused on vertical markets, providing customized solutions for specific industries.  But changes to consumption models and technology have caused the channel to transform their focus. Today, distributors are exploring new Internet of Things (IoT) solutions, forging relationships with nontraditional IT companies specializing in everything from temperature sensors, to medical equipment, to drones. Mix in other high-growth areas like cloud, mobility and security, and the channel’s vertical solutions capabilities will only be limited by our imagination.{ad}

Clearly, a plethora of new technologies and consumption models spells big opportunity for solution providers this year — we haven’t even talked about cloud yet (we’ll save that for the second article in this series). Now it’s up to solution providers to embrace these new opportunities and enable themselves for future success. And, by the way, distributors can help with that too.

Tim Curran is the CEO of the Global Technology Distribution Council (GTDC), responsible for the strategic direction of the international trade association that represents members with more than $130 billion in annual sales.


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