A Look at Emerging Collaboration & Competition Between Master Agents & Distributors
Distribution is a critical link in nearly every supply chain. IT and telecom are no different. Distributors like Ingram Micro Inc., ScanSource Communications, SYNNEX Corp., Tech Data Corp. and others help manufacturers deliver IT and telecom hardware and software through VARs and dealers to business customers. Separately, master agents like Intelisys, MicroCorp Inc., Telecom Brokerage Inc. (TBI) and WTG help telecom service providers deliver phone and Internet services through telecom agents to businesses. These distribution channels have evolved side by side for two decades, but now convergence of IT and telecom technologies as well as the emergence of service-delivery models like cloud are changing that, making their once-distinct roles less clear.
"As technology converges, so will partner types and the supply chain that supports them," said Tiffani Bova, vice president of research for Gartner Inc. "Master agents and IT wholesale distributors will continue to play an integral role in the delivery of technology solutions to their downstream channels; however, both will need to invest in more advanced services to ensure their relevancy remains intact as cloud adoption continues to rise."
In pursuit of the end-to-end solution, a few master agents have added a couple of telecom and/or IT hardware/software brands to package with connectivity services. TBI, as one example, sells IP PBXs from ADTRAN Inc., while WTG offers mobile bridges from Top Global USA Inc. and IP PBXs from Fonality Inc. In these cases as well as most others, the master agencies are not fully duplicating the role of the traditional equipment distributor as they are not offering a range of suppliers nor do they typically handle credit, logistics or pre- and post-sales technical support, which are left to the manufacturers' services organizations.
Interestingly, some master agents like Digital Planet Communications Inc. have put bundled telecom and IT gear/services at the center of their strategy while others like X4 Solutions and Telarus Inc. have made the opposite choice. "We do not have any plans to provide IT or communications hardware/software through our channel," said Patrick Oborn, vice president of business development for Telarus. "There are plenty of places that can do this better, faster and cheaper than we could, but most importantly, that's not our core business."
While sticking to their knitting is a primary reason for eschewing hardware/software distribution, some master agents also are concerned about competing with VARs — a growing channel for their core carrier services. "To enter the hardware space, in particular, would be to compete directly with our existing and prospective partners. That is an area [wherein] we would rather support their efforts than compete with them," said Curt Allen, president of X4 Solutions.