Channel Chief Roundtable: We're Relying On Distribution More Than Ever


As cloud and new technologies shake up the channel, the role of distribution is growing as a trusted adviser to the partners, channel chiefs and solution providers told CRN.

"We see value in the distributor probably greater than we ever have," Frank Rauch, vice president of Americas partner organization at VMware, said in a roundtable discussion with CRN.

The channel chiefs said they all do a significant portion of their business through distributors. Hewlett-Packard Vice President of Worldwide Channels and Alliances, Enterprise Group Jesse Chavez said that 70 percent of the company's indirect revenue comes from distributors. IBM North American Channel Chief Tami Duncan didn't reveal the company's percentage of business through distribution, but said it depended "heavily" on distributors.

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Dell's Vice President of Channel Sales Frank Vitagliano said that while his company doesn't do quite as high a percentage of partner business through distribution, he said that the distribution business has been growing "dramatically" for Dell.

"We're finding from a capability standpoint, there's just nobody that can do it as well as they can," Vitagliano said. "We're in the process of ramping it up."

Where distributors are really showing their value for resellers is with what Ashok Thakur, owner of Hicksville, N.Y.-based Computer Consultants Network, called the "Three Ps': price, program and personnel. That value is even more apparent with cloud, which Thakur called "the biggest mess we've ever seen." Distributors have the infrastructure and logistics to handle the complicated marketplace and make it manageable for resellers like him, he said.

Edison Peres, senior vice president of worldwide channels at Cisco, said at the CRN roundtable that one of the biggest values for the distributor in the cloud world will be as the cloud aggregator, especially as solution providers look to pick up multiple applications from a variety of vendors. 

"I think that they're going to play a nice role at being able to aggregate those different cloud offerings into a package that makes sense for the reseller as well as for the end user," Peres said.

To that end, HP's Chavez said that distributors need to ramp up the value-add that they are able to bring to the conversation, whether it be through aggregation or another means.

"I think that's the value that a distributor will bring, that aggregation, so that solution providers can take those different components based on the markets that they're serving and bringing that all together so that it's seamless for their particular customer," Chavez said.

Some distributors also are building portals that help enable the cloud aggregation, so whether it is a VMware hybrid cloud or other companies, it is opening the conversation for aggregation, VMware's Rauch said.

Peres said that he didn't anticipate many distributors spending a lot of money becoming the providers themselves, but he did think they would take existing infrastructure and leverage it toward a cloud environment.

IBM's Duncan said that one of the biggest things she is seeing in distribution is building out its own Infrastructure-as-a-Service. At the beginning of April, Ingram Micro did just that with the launch of a collection of hosted services at its Ingram Micro Cloud Summit 2014, including Ingram Micro Hosted Exchange, Ingram Micro Virtual Private Server and Ingram Micro Web Hosting.

In the roundtable discussion held prior to the Ingram launch, Duncan said that the distributor having that infrastructure conversation is a good thing for IBM.

"If a client comes in and asks for a particular quote, I would love to have my distributor be able to prompt that partner. To say, 'Have you thought about offering this as Infrastructure-as-a-Service, as opposed to a straight-up hardware purchase?' Have you had the conversation of capex and opex, because we're not going to catch all those things," Duncan said.

"The distributor is going to be the first point they go to. They can be a huge game-changer for us in giving those suggestions and helping move that market." 

NEXT: Distributor Marketplace Reach Still A 'Critical' Piece For Vendors