The Changing Landscape of Distribution

“The technology distribution landscape is quickly evolving, and it’s becoming harder to steer the ship with so many challenges facing our distributors,” said Annette Taber, vice president of industry strategies for CompTIA to a full house gathered for the opening panel discussion at the 2016 Vendor Summit that took place earlier this month at CompTIA ChannelCon in Hollywood, Florida.

The first question Taber posed to the panel: “What unique message about your business model makes your organization better?”

Jason Bystrak, executive director of cloud, North America for Ingram Micro responded first by stating that a traditional distributor like Ingram Micro has relationships with legacy vendors – many of whom are transitioning to the cloud – as well as the more aggressive, born-in-the-cloud vendors, which can result helping partners take a more balanced approach to growing their businesses.

He added, “You also need to be able to align with your vendors so you know where they are coming from, and how they can transform your operational platform pieces. For example, vendors need to work with someone that has the right investments and standardized technology to convert APIs into the proper format and operationalize it.”

Steve Robinson, vice president, global cloud solutions for cloud services at Arrow Electronics added that as an industry, distributors should be promoting thought leadership around their back-end suppliers. “My view is that we need to collapse down that marketing reality. As a distributor we are cross-vendor and cross-channel, and so I like to tell partners that we’ll be their R&D arm,” he said. “The fact is they don’t always have the capital investment to achieve this.”

Robinson also said that distributors need to address that “trusted advisory” role they play in selecting best-of-breed hybrid cloud, cloud and on-premise solutions and that when they are able to do this, the value-add will be readily apparent to partners.

Distributors do play a trusted advisory role, said Crash Lowe with Waterdog Technologies, who added, “I don’t think that a service provider needs to try to find one distributor that does everything. I think it is a smart move to diversify and have bigger distributors that are strong in hardware, and then pick smaller distributors that specialize in other areas.”

He added that there is some security to diversifying among multiple distributors, and that solution providers should also keep an eye on who will be able to give them the best margins and best support.

The conversation moved on to business trends. Ryan Walsh, senior vice president of partner solutions for Pax8, led by sharing with the audience that the dialog needs to be changed from a product specification discussion to a problem and solution discussion.

 “Distribution models have to adapt accordingly and supply this information to solution providers, who simply don’t have the time – they’ve learned the nuances of the product, but they need assistance in teeing up the discussion and getting information from marketing and sales so that they are having meaningful conversations with the right people,” he said.

Walsh added that partners also need a distributor that can lift the burden associate with cloud services through integration and automation. And finally, distributors can complete the cycle by providing partners with the ability to control their billing.

The conversation then turned to what distributors can do to help the vendor community better align themselves with new technologies.

Walsh started the discussion by stating that there are a lot of things that distributors can do. “You really have to accept the fact that channel partners want to maintain that trusted relationship and therefore you need to have that solution dialog, which means you must have that integration conversation,” he said. “Before that conversation, one area that we are finding we are working with vendors quite a bit on is in having meaningful conversations around sales compensation – a big area where they can support their cause by ensuring that partners aren’t at a disadvantage when moving to the cloud.”

“Compensation is an important conversation to have at the solution provider level as well,” said Lowe, who added that even on the engineering level, the move to the cloud can be seen as a threat to job security, and distributors can help coach their solution providers on how to have these conversations across all levels within their organizations.

Walsh added that content is also key to having these conversations and that marketing needs to be able to provide materials that support these conversations and also identify the problem, how it is being solved by the solution, the target market, and any potential integration issues, etc.

At the mention of integration, Taber jumped in asking “What are distributors doing to help their partners solve the issues associated with integration?”

Bystrak said, “Vendors certainly have the right APIs in place to support integration, but we have found that even so, the integration of standard products takes a lot of work, so we are becoming involved earlier in product planning and the development of product roadmaps. It’s not good enough to call us up a month in advance to let us know that a new product is coming, we need to be involved much earlier in the process to ensure that everything is in place to support a smooth integration.”

The final question posed to the panel of distribution experts by Taber was “What is the most critical element of transition and how can vendors help?”

Lowe stated that in his experience working on the solution provider side, prior to joining Waterdog, MDFs are not always the best way to help drive sales. “Most often, they were tied to a certain product, and not always a product that our clients wanted,” he said. “Their should be more dialog with solution providers going upstream and telling vendors and distributors what they are seeing in the marketplace, what products and solutions their customers need, and then working with the vendor to develop programs and best practices to sell those solutions.”

Walsh added that Pax8 is experiencing success in providing on-demand marketing tools to its vendors. “We work with our vendors to develop content around products of interest, problems that need to be solved, etc.,” he said. “Nurturing our partners and putting content into our channels has been very effective.”

Lowe agreed with Walsh’s assessment and added that partners are often great with the technology, but not always good at marketing, and by creating pre-packaged materials that are relevant to their partners’ audiences, distributors can help “streamline the sales process and gives them something of value and a reason to always be touching their clients,” he said.

Click here to learn more about CompTIA’s Vendor Advisory Council.

Suzanne Collier is with WhiteFox Marketing Inc.