Distribution Executives Forge Tighter Links

It doesn't seem that long ago that distribution executives spent a great deal of time and money worrying about Dell and the changing channel habits of key vendor partners such as Hewlett-Packard. But times have changed.

There's a new era in IT distribution, and it has less to do with beating Dell onto the UPS truck and more with building the processes that allow managed services, vertical market solutions and new technologies to solve the most complex business problems.

These are the areas of focus now under scrutiny by the top two-tier partners in the world.

CRN editors recently gathered seven executive members of the Global Technology Distribution Council to talk about the future of IT distribution: how they'll get there and what the changes mean for solution providers. The conversation marked a dramatic turn from previous gatherings as the executives enthused about new investments, new partnerships and new opportunities.

Participating in the discussion were Pete Coleman, executive vice president of the computer systems division at Agilysys; Fred Cuen, president of Avnet Technology Solutions; Jim Illson, COO and president of the Americas at Bell Microproducts; Ken Lamneck, president of the Americas at Tech Data; Anna McDermott, CEO of Access Distribution; John Paget, president of the Technology Solutions Division at Synnex; and Greg Spierkel, CEO of Ingram Micro. Here are excerpts from the conversation.

MANAGED SERVICES
Distributors, like solution providers, have spent the past couple of years examining the managed services market. More specifically, what role can they play in that market? Can they add value, and how do they build that business? The companies have taken diverse tracks to get there, from building their own MSP infrastructures to partnering with third parties, with the hope of becoming a differentiator in the market.

FRED CUEN: We became involved in the managed services play for two reasons. One is we were approached by the manufacturers to participate in this area. What was more interesting was the partners thought that this would be a great place for them. The market was saying we would like an opportunity to acquire managed services vs. a platform, and we were able to create that environment. We've created a pretty interesting business from zero to about $20 million over a 24-month period.

I really think what all this boils down to is everybody is saying what are we going to focus on? What are we going to be experts on? If you want to be a generalist, that was OK when there was a lot of money around. But as things start to tighten up, if you don't have expertise and don't deal with complexity, I think you're not in the right place.

JOHN PAGET: We filed a patent on something called Printsolv, which is an application that allows us to read all of the intelligence on the output device on a network. We can read meters, toner levels, alarms and so forth, then transmit that information through the firewall with no security issue. What that has allowed resellers to do, then, is to do fleet management in a very different manner. And also, it allows them to do leasing on a cost-per-scan, cost-per-print basis, and data VARs didn't do that very well. Copier VARs did that well because they had a lot of feet on the street.

When we think about managed services, there's a whole market here that data VARs certainly want to be in because the market's moving, but you have to create a tool. In many cases, I think managed services is a concept of creating tools, enabling people to figure out how to do that, and then the tough job is to take this heterogeneous type of tool to an industry that likes to be vertical, like Xerox and [HP] and so on.

KEN LAMNECK: What is important is the creation of the tool because what we have to all figure out is how do you monetize it? It's taken a lot of effort. We spend lots of time saying that's great, who's going to pay for that? How am I going to make money on that? Who's going to benefit? Today, our focus is on listening to our resellers and saying what do you really need and what do you need us to do? We're spending lots of time understanding that piece, but the monetization is the part where we start to struggle when we figure out how that is all going to play.