Is The End Near For Closed Distribution?

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Avnet's John Paget predicted that the end of the closed distribution model as it exists today is coming, and will be replaced with a hybrid model that emphasizes partnering with solution providers to market to customers.

Paget, president of Avnet Technology Solutions, made the remark during his keynote at the Phoenix-based distributor's annual partner summit, held this week in Scottsdale, Ariz.

Under the closed distribution model, some vendors force solution providers to choose an exclusive distribution partner for specific particular products. Solution providers typically must sign a contract with a distributor on a yearly basis with few opportunities to change distributors outside the yearly contract time.

Paget, president of Avnet Technology Solutions, said during his keynote that the closed distribution model is peculiar to the U.S.

"In Europe, by law, it's an open source distribution model," he said. "The closed distribution model is in the past. It's merging into what we call the solutions distribution model."

That solutions distribution model includes a mix of intellectual property, product sets, financing, and application marketing, Paget said. "With solutions marketing, we market to the end-user community to generate pull for vendor partners for you," he told the solution providers. "I don't think it's really important for us to market to you. You know who we are."

Jeff Bawol, senior vice president and general manager for enterprise software and storage solutions at Avnet Technology Solutions, said that Paget is looking at the distribution model from a global point of view.

Next: Hybrid Distribution Systems On The Horizon

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