Could Distributors Be Shut Out Of The Managed Services World?
But technology can and does change things as well, and that&'s as true in distribution as it is in anything else.
Let&'s face it, there was a time when the only way to distribute software was on a floppy disk. Heck, there were at one time dozens of software-only distributors that had warehouses jammed with shrink-wrapped boxes containing an untold number of applications, not to mention network operating systems.
The Internet, of course, changed all that. Today, the preferred method of software distribution involves no disks, merely an Internet or network connection. Costs have been taken out, and the ability to upgrade multiple PCs on a scheduled basis with little or no human intervention is an efficiency driver.
The most talked-about trend these days is managed services. The topic is so hot that at a recent CMP Channel Group XChange event almost every panel discussion we held somehow turned into a managed services discussion, whether that was the intended subject or not.
The concept is a viable business model, and it will be an increasingly bigger go-to-market strategy next year.
Almost every solution provider I know has jumped in, some with both feet. Others are dabbling slowly or trying to figure out what the best offering and model will be. If you aren&'t thinking about managed services today, chances are you will be by this time next year. I think it&'s inevitable that solution providers will either have a managed service offering, or they risk being shut out of a significant portion of the customer set.
So where does distribution play? Over the long term, this could be a disruptive phenomenon for distributors that ignore it.
While distributors do lots of things in this market, the thing they do most often and that their entire ecosystem is built around is selling and moving hardware products efficiently across a very wide area. In short, distributors enable vendors, especially hardware suppliers, to reach a market competitively.
They are so good at it that much of what Dell sells actually is delivered by Tech Data because it can do so more efficiently.
Managed services, which can take a multitude of forms, are a play that distribution must figure out, more because of the long-term possibilities than any short-term gain.
As more solution providers make a market in managed services that are largely software-based, such as remote backup and security, the next generation of managed services will increasingly include wider swaths of hardware. If an SMB customer signs on and gets comfortable with an annuity-type payment for a software-centric managed service, will it be open to letting its managed service provider handle its hardware requirements in the future?
That&'s a very strong possibility. Offering hardware as a managed service, you might say, amounts to nothing more than leasing. There is some truth to that. But because this is all tied together, it ultimately is more of an outsourcing play.
Over time, I believe the concept of managed services will morph into the broader notion of outsourced IT. Distributors are best-equipped to enable this for a number of reasons, one of which is their credit capabilities. But there is no guarantee they won&'t be displaced, either. To ensure they aren&'t, they need to be in this space as it develops, and that means now.
Make something happen. I can be reached at (781) 839-1202 or via e-mail at [email protected].