GTDC CEO On AI, Marketplaces And The Future Of Distribution
‘There's been a number of distributors that have created practices in the AI area to help consolidate best practices but also to help build them out,’ says Global Technology Distribution Council CEO Frank Vitagliano.
Frank Vitagliano said the future of IT distribution has a strong focus on platforms, services and AI.
Those components will play a crucial role in streamlining processes and automating workflows, but distributors must invest in new technologies and services to keep up with the ever-evolving needs of their customers.
“There's been a number of distributors that have created practices in the AI area to help consolidate best practices but also to help build them out,” Vitagliano, CEO of the Global Technology Distribution Council, told CRN. “There's a huge amount of services opportunities out there that the solution providers are going to have with their end users. The end users are willing to pay for that expertise because they don't know how to build it out. The distributors have to figure that out, and have started to figure out, how to support that enablement.”
He said distributors are bringing services and capabilities to support the introduction and the acceleration of AI all to improve the customer experience and enhanced productivity.
As distributors continue to play a crucial role in the industry, they must evolve to meet the changing needs of customers and vendors.
“Every one of the distributors are in tune with what's happening from a technology standpoint, but what they're also trying to do is figure out, as they build out these platforms, how do they continue to make them effective?” said Vitagliano. “There's going to be massive enhancements and I think it'll all be around productivity and workflow process and ultimately, there'll be huge customer experience advantages.”
CRN sat down with Vitagliano at the Global Technology Distribution Council summit in Oceanside, Calif., last week to discuss AI, marketplaces and the role of distribution going forward.
Where do you see distribution in the next five years?
I think the future is all tied to the platforms that are being developed. They're not just marketplaces, they could be marketplaces but they’re platforms for transacting business end to end. That's really important because in addition to just transacting business, it’s going to automate processes. That's going to continue. What people underestimate is the amount of workflow activities that are involved in the work that distributors do. I see the platforms really streamlining those activities.
The second factor is the services that distributors are creating. They're really important because in the past it was all about distributors providing a warehouse for hardware, that’s not that case anymore. That’s going to continue to evolve. The third part will be the inclusion of AI and how AI helps with automating a lot of those processes and workflows. And we have no idea, at this point, what that’s going to look like.
How are distributors using AI to improve services to their customers?
They're starting to build that into their platforms. They've been making major investments the last five, six, seven years but there's just so much there that we don't even know what questions to ask yet. Every one of the distributors are in tune with what's happening from a technology standpoint, but what they're also trying to do is figure out, as they build out these platforms, how do they continue to make them effective? There's going to be massive enhancements and I think it'll all be around productivity and workflow process and ultimately, there'll be huge customer experience advantages.
You said in a keynote that distribution is projected to gain momentum through 2025. What contributes to that momentum?
It starts with the basics. Their customers really value the core foundational things that they do. It’s credit. It's being able to move product through the supply chain, it’s technical support, it's finding and supporting partners and new opportunities. Those core capabilities have been in place for 25, 30 years, so they've been building those out. What's happened along the way is as the marketplace evolved, the distributed capabilities had to. But a funny thing happened. [Through the] pandemic, they reverted back and the core basics became really important again. I think that really solidified the distributor’s place in the ecosystem. Now what's been happening is, we're kind of past the supply chain issues that resulted from it but now we're into a period where what is the next evolution? What's the next turn of the crank? And that's the platform piece. I fundamentally believe that the core capabilities that distributors have had in place, for 30, 40 years, are taken for granted a lot because they're just there. They work and they work at scale.
How do you think the relationship between vendors and distributors will change over the next five years?
I think the marketplaces and the platforms will have a big impact on that. Vendors have traditionally relied on a number of distributor relationships, depending on the market, and the product set. What I think is going to happen is the players that do the best job in building out and implementing their platforms will grab significantly more share. The partners will become stickier with a certain set of distributors. What's going to happen is platforms are going to lock customers in so that they're going to turn it from a transaction into a relationship. The differentiator will be execution. Who can go execute it the best way, implement it and implement it effectively.
Do you think all distribution is leading towards a digital marketplace?
I think everybody's going to have a digital marketplace pretty soon if they don’t have one already. The idea is to make the experience better and make the experience like a B2C (business-to-consumer) experience. But we're in a B2B environment and it’s more complex. I think we're still sorting out, from a go to market standpoint, how that's going to play out because I do think everybody will have a marketplace. I think the question will become how to effectively support B2C business in that environment. It's not all figured out. The distributors have a point of view on that, in that point of view is tied to their platforms. The idea is to tie the suppliers into it. We're not there yet but we're not far from it either. That's going to be a big deal as we go forward.
What is your overall message to the channel about the ever-evolving role of distribution?
If you look at what's transpired over the last 30 to 40 years, the distributors have been in place and continuously evolved their products and their services. Not only have they continued to evolve that but they've continued to invest in what’s coming around the corner. All the work that they’re doing, all this stuff that's related to implementing the changes that are required, implementing the investments, they're still taking care of the customers.