Is distribution still relevant in a digital world? Comms Business Magazine looks at the key issues for channel distributors and how partners should pick a distributor based on their specialisms and value adds not just on their logistics alone.
In a technology world that is increasingly based on software applications that are delivered to business on a cloud-based consumption model you would think that the role of the distributor is becoming increasingly irrelevant – but that would be wrong.
Aside from all the hardware still shipping that needs the professional logistics treatment from a professional distributor there are a number of other roles that at have become more prominent in this digital age.
For instance, the vendor relationship should not be underestimated at a time when the sheer volume of applications and products on the market has grown at an exponential rate. Here the advice the distributor can provide channels is invaluable.
Let’s see what the distributors themselves have to say about this.
How are distributors helping resellers drive new business models and extract more value out of deals?
According to David Watts, Manging Director at Tech Data UK and Ireland, the role of distribution is definitely changing very significantly.
“Tech Data is now very much an enabler for resellers as they transform their businesses for the third -platform or digital era. A lot of changes are taking place at different levels right now.
End-user customers are shifting from a pure on-premises approach to IT, to cloud-based and hybrid. Mobility is being fully embraced and organisations and business processes are being remodelled around digital.
Emerging technologies such as machine learning, AI, analytics and IoT are making it possible to do things that simply could not be done before. All this is generating a lot of data, which has to be managed efficiently and securely.”
Hanspeter Eiselt, VP of Marketing at Nuvias believes value-added distributors can help resellers keep pace with evolving business requirements and with scoping opportunities, targeting the right deals and offering the most complete and tailored solution, supported by ancillary services.
“VADs should provide the expertise, both business and technical, to help analyse specific business requirements, bearing in mind legacy environments, regulatory compliance, technology trends and future-proofing. Architecting made-to-measure, composite solutions and helping customers maintain them is something resellers, especially small and medium-sized ones appreciate help with.
Integration with existing IT environments is increasingly necessary and requires deep expertise.
Configuration and maintenance are additional services that can help resellers offer a more complete service and extend their opportunity for long-term business. The XaaS IT consumption model is gaining ground and demands a wide range of services on tap, which need to be supported by robust resources and infrastructure. This is where VADs come into their own to provide the support network for channel partners.”
Tom Maxwell, Head of Dealer Sales at Nimans, says his company always look to help their resellers cross-sell.
“Whether that’s in terms of attachment rates by adding complementary products to existing core solutions or by introducing new technologies such as security and CCTV – which enables them to deploy additional IP services. A natural progression of voice, data and IP becomes a seamless fit.
We find resellers are continually reviewing their portfolios as technology continues to evolve. Gone are the days of putting a phone system on the wall and plugging in ISDN or analogue lines. It’s much more sophisticated than that especially around the cloud. It’s about delivering an overall solution rather than just a product sale and we’re here to help in many different ways. Whether selling cloud-based, hybrid or traditional on-premise platforms; resellers need to facilitate them all.”
Daren Garland, Managing Director of ProVu, “We work closely with our partners to address their needs, over the years this has led us to develop many initiatives and programmes designed to help resellers extract more value out of deals.”
Do distributors have the skill sets themselves to help channel partners put solutions together for users?
Will Morey at Pragma says as the unified communications and collaboration market becomes more of a buyer’s market, it is crucial for distributors to better understand the needs of their end-users and develop user-centric solutions.
“Those who’ve anticipated these changes have developed the required skills and gained access to insights to help their channel partners put tailored solutions together for end-users. The rest, however, is divided. On one side of the spectrum we have distributors who are unaware of these changes and on the other, we have distributors who are becoming more aware of this shift and trying hard to hone their skills so they can develop tailored solutions for their partners’ customers.
To sum it up, we believe that these skills are vital for distributors, and while all distributors don’t possess these capabilities, they will need to catch up if they are to remain competitive.”
According to David Watts at Tech Data, resellers can’t be expected to take all of this on-board and meet the increasingly diverse needs of their customers without some support.
“They need to decide where they are today, where they want to be in the future, and then map out a pathway to achieving their goals. We see our role as enabling them and supporting them on that journey, providing the information and learning resources they need to develop their own knowledge, and filling the gaps with expertise and services where that’s required, along the way.
Tech Data has been developing the resources to do this for some time now and these form a key part of our Trusted Advisor ethos. Tech Data’s Practice Builder programmes, for example, provide a framework for resellers to develop their capabilities in key areas such as cloud, analytics and IoT, and security – and we also offer structured support in key vertical markets, such as healthcare and manufacturing. We bring our partners all of the technologies and expertise needed to formulate solutions and take them to their end-user customers.”
Hanspeter Eiselt at Nuvias says it is the business model for VADs to add value to their channel partners’ businesses by completing their offering with expert advice and consultancy to help them scope, integrate and tailor technology solutions for business.
“As an example, Nuvias has expert Practices by technology area, from cybersecurity to advanced networking and unified communications. We also have a configuration centre to help tune and customise solutions for business.”
Tom Maxwell at Nimans confirms that distributors are a key conduit between vendors and resellers and their knowledge and skill sets are crucial.
“Not only do we have to hold all the accreditations, the highest levels of internal expertise ensure our customers always receive the best advice.
It’s about value and assurance so that when a reseller comes to us with an opportunity we can provide guidance and authority. We have our own in-house training academy combined with technical and pre-sales skills sets to ensure we can help a reseller at every stage of the sales process. This is complemented by highly experienced desk-based Account Managers.”
How are distributor portfolios changing to reflect current market trends?
Will Morey says distributors are evolving their portfolios by introducing new products their partners can easily scale, customise and deploy across their customers’ businesses.
“The focus is on offering greater flexibility to meet the varying needs of customers, and enabling the better use of big data, AI and IoT technologies, all while ensuring greater collaboration, business efficiency and seamless consumer experiences.
We see a massive drive among distributors to differentiate their product offering by introducing new value additions to both their partners and end-users. These come in the form of plug-ins and attachments that help users make the most of the latest technologies, and new cross-sell opportunities to help partners make the transition from being a supplier to a strategic partner to their customers.”
Hanspeter Eiselt at Nuvias says that from AI to DevOps, the trend is to inject intelligence and automation and integrate processes and tools to enable business efficiency.
“The Nuvias portfolio is certainly being shaped with these trends in mind. From AI-enabled Wi-Fi with Mist, to SaaS with Riverbed and software-defined networks integrating security with Versa, the Nuvias portfolio looks for leading-edge vendors whose technology can be integrated into a composite business solution.”
Tom Maxwell says that Nimans portfolio is always changing.
“There are new products and new trends continually coming to market and we like to lead from the front, based on four decades of industry expertise.
The cloud is playing a much more prominent role and the architecture of the solution has radically changed. End points need to reflect this and diversify too. We evolve with the market, drive change and encourage adoption of complementary technologies or alternative technologies that can deliver the same overall solution.”
What should partners consider before going with a particular distributor?
John Carter, Managing Director at DMSL says the only question a reseller needs to consider when they decide whether to work with a distributor is: ‘Can they help me do good business?’
“The longer version would be ‘Can they help me win deals and make a profit? And deliver what my customer actually wants, so that they are happy and will keep them coming back to us in the future?’
How involved the distributor becomes in deals depends on a number of factors – the kind of service or solution being delivered; the skills that the reseller has; and how much support the customer will need during the installation and on an on-going basis. But most distributors can’t really do very much or any of that.
That’s real value for a reseller as it leads to them doing real business. It’s simple and does not pretend to be anything other than what it is – an effective way for generating new business. It’s worked well for us for more than 15 years. It has, frankly, been a surprise to us that other channel companies that have been doing little more than buying products in volume and shipping them on at a small margin (also a very simple model of course, but one that adds little real value), have not started to change their approach sooner. For some, it might be too late. I strongly suspect that we will see a few of them disappear in 2020.
Will Morey at Pragma says that in addition to considering the range of products on offer, or the logistics, reseller partners should consider the level of support offered by their distribution partners.
“The time it takes them to introduce new solutions to meet consumer needs, profit opportunities, commitment to the channel, the support provided on the technical, sales and marketing fronts and their dedication to making the partnership a collaborative experience where resellers get a say in the product strategy and new product development. It’s also important to evaluate whether there is vendor-reseller competition with that distributor.
Distributor-reseller partnerships shouldn’t be one-sided or merely transactional. Reseller partners need to look for mutually beneficial partnerships where they are constantly engaged.”
“There are some basic fundamentals resellers need to consider such as around logistics capabilities,” says Tom Maxwell at Nimans.
“Many say they can deliver next day but how reliable are they? Do they have stock and fulfilment? Can they do white label and drop-ship multiple orders? Can orders be placed until 6.30pm and most of all can they help resellers grow through credit terms and leasing opportunities?
Serving the customer has been our mantra since Nimans was formed in the early eighties. We are here to help resellers grow their businesses. If they grow then we grow too.”
“One key thing to remember is that it’s not always about price,” says Daren Garland, Managing Director of ProVu.
“Instead, partners need to think about the value of the whole service in delivering an end-to-end solution. We’d advise partners to look for a distributor who can add value to your business not just in the products they supply, but also in the services they provide around them. Before selecting a distribution partner, it’s important to be confident that they understand your business, if your distributor understands what it is you are trying to achieve, they will be more likely to develop the services you require and ultimately support the growth of your company.”
The role of the distributor is changing, some would say slowly but we would say that distributors are essentially keeping pace with the channel at the very least. Many resellers were early and big time adopters of cloud based services and many are still earning a living from selling predominantly CPE
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