The Changing Role of Distribution
I reported a few weeks ago on an initiative by Synnex to team with customer solution providers on federal opportunities, offering integration, engineering or any other services that might be required in the bid. The company refers to it as outsourcing, but really this is a standard subcontracting relationship. And a year ago, Ingram Micro announced plans to bid on state and local contracts but then pass all work over to its customers -- the theory being that Ingram would act as facilitator, solution providers as the sales and services team that works the opportunity.
So the question is, are these distributors entering their customers' territory? They say no, that the intention is not to compete with customers, but rather help them win opportunities. Some solution providers I've spoken with, however, worry. Even Barb Miller, director of Tech Data's government and technical services divisions, sees it as risky, and says she has no intention of going in that direction.
My thinking is that if Synnex and Ingram play these initiatives right, they could end up being the best services available through distribution. In the former's case, solution providers will have access to an immediate team member who can provide whatever supplemental services are needed to land the deal, and theoretically at a lower cost given the barter scenario.
And in the case of the latter, solution providers can hand off the contracting piece that eats up so much time and resources to a huge company with deep pockets and focus on the customer.
In other markets, there would be little reason for distribution to play a direct role in winning opportunities. But in government, contracts are won and lost on a unique value add that sets a bid apart, and on the ability to respond flawlessly to a request for proposal. Solution providers -- particularly small ones -- often have a hard time managing to meet all of the requirements on their own, so why not turn to their distributor? In the public sector market, the role of distribution goes way beyond pick, pack and ship anyway.
That said, success rides on whether Synnex and Ingram keep their priorities straight. If the cost associated with the services offers no advantage beyond putting money in the distributors' pockets, the channel won't waste any time crying foul.