Distribution CEO Panel: Don't See Our Services Push As A Threat

Despite some saying that distribution's push into services would cannibalize vendor or solution provider services offerings, a panel of top distribution executives said that was a myth. In fact, they said the reality is quite the opposite.

Top executives from Ingram Micro, Tech Data, Synnex, ScanSource and Avnet took the stage at the Global Technology Distribution Council (GTDC) U.S. Vendor Summit in San Jose, Calif., on Wednesday. In a panel moderated by GTDC CEO Tim Curran, the executive agreed that there was enough services opportunity to go around, and that their offerings were complementary and additive to their partner offerings to end users.

Tech Data CEO Bob Dutkowsky said that he sees distribution's role as the exact opposite of cannibalizing vendor and solution provider services. Rather, he said that he sees distribution's role to spread out and deploy resources to fill in any gaps left in the market, which requires working with both vendors and resellers.

[Related: HP CEO Whitman At GTDC Summit: We Succeed Because Of The 'Power Of Many']

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"As we've innovated as partners, the real value is in mapping the total value spectrum so there's no gaps and no overlaps ... if you take a look at the raw tonnage, the size of the overall services market, of the total multi-trillion dollar market, half of it is services. There's plenty of room to continue to evolve these models overall," Dutkowsky said.

While distribution has been known in the past for its ability to pick, pack and ship technology effectively and efficiently, Dutkowsky said that distribution's origin really lies in services. That is especially true, he said, in the technology industry of volatility and change today.

"It's time to step back and fundamentally understand that, at the end of the day, we are a services business. We're not in the [intellectual property] business, so services are our nature. At the end of the day, that's where we derive our fundamental value," Dutkowsky said.

Synnex CEO Kevin Murai agreed, saying that he sees the services capabilities of distribution as a "huge complement" to what vendors provide.

First, he said that as services get deployed from resellers, those VARs often don't have the scale needed to invest in deep professional services. That's where distribution can fit in, he said, and work hand in hand with the reseller. Second, he said that a typical solution provider doesn't work exclusively with a single vendor, which is an opportunity for distribution to step in and provide multivendor services.

"That’s where the distributor has real value-add, and that’s where it extends beyond what a single vendor can do," Murai said.

However, as the lines continue to blur with services, Ingram President and COO Paul Read said that the need arises for greater communication and coordination between vendors and distributors so they don't step on each other's toes. He said that distribution has proven itself in the past to be flexible and adaptive to vendors' prescriptive needs, and this industry shift will be no exception.

"As the services opportunities continue to evolve, don’t be shy about being prescriptive," Read said, addressing the vendors in the audience. "We're really good at adjusting to that and filling in those voids."

ScanSource CEO Mike Baur agreed, especially as distribution looks to broaden its portfolio with new vendors. He said it is important for vendors to share those goals and strategies for partner growth so that the distributor can tailor its outreach to partners in a way that benefits all sides of the equation.

To that end, communication is key, Avnet CEO Rick Hamada said. For vendors, that means keeping the distributors up to date with business and technology road maps. For the reseller side, Hamada said it is up to the distributors to make sure they are communicating so they can best position themselves to fill reseller needs.

"The time for really good collaboration, there's never been a higher premium on that in my opinion," Hamada said.

PUBLISHED SEPT. 11, 2014