Diving Below the Surface of the Disty Report

Earlier this year, the VARBusiness State of Distribution report once again handicapped the disty movers and shakers, and the results produced--well--no real surprises.

The fact is, the top 25 distributors may jockey for position a bit, but their relative place in the disty universe remains fairly fixed, as does their value proposition, their list of services and even their vendor bill of fare.

If there's anyplace in VARBusiness' research where the usual suspects remain fairly status quo, it's in the State of Distribution. As one VAR recently phrased it, the report works best because there's a certain comfort in knowing that, for all the changes that roil the industry, there are still some things you can take to the bank. Things like Ingram Micro and Tech Data selling a whole lot of technology.

But hidden below the State of Distribution radar are some interesting, if often ignored, distributors that provide VARs innovative solutions, cutting-edge services and access to emerging technologies. To round out our year here at VARBusiness, we'll dedicate the distribution section for the next three issues to introducing you to some of these up-and-comers. Call it our Distributors To Watch report. If you already know where to go to get what you need, perhaps you'll find a new place to get something you didn't even know you wanted.

Coast Solutions Group (CSG) provides a great example of a small specialty distributor that is making a name for itself in its niche. Based in Irvine, Calif., CSG saw an 18-percent jump in annual wholesale revenue. Not bad for a company that doesn't sell stuff but rather services. The privately held company lists Microsoft services, deployment and VMware services and staffing as its top offerings, and it's grown from 10 employees last year to 20 this year. Its revenue performance was good enough to push the small firm up one spot to No. 31 on the State of Distribution ranking.

CSG has about 100 solution providers enrolled in its membership program, which provides VARs with presales and technical support, service-development training and project-management assistance. The company has another 1,100 IT service providers as part of its extended network. The combination of CSG's VAR network and an impressive services repertoire has it feeling optimistic about 2007.

"CSG will continue to differentiate itself by focusing on the service-delivery side of the distribution business," says Paul Freeman, president of CSG. "With more than 1,200 service-delivery partners and thousands of independent technical resources, as well as presales technical support and almost 100 packaged SMB services, our focus will be on accelerating our customers into the service-delivery space with low risk, high return and high customer satisfaction."

Also on the list of distributors to keep an eye on is Norcross, Ga.-based Eastern Data, the smaller distribution arm of a larger solution provider by the same name. Eastern hovered around the lower end of the VARBusiness Distribution survey this year, landing at No. 30. The distribution portion of the VARBusiness 500 company has been making strides in upping both its online sales, which rose from 20 percent to 25 percent of total sales since last year. That's helping Eastern Data work bigger than its single warehouse and 45 employees would normally suggest.

"Eastern Data is excited about being a company to watch in 2007," says Cami Parks, general manager at Eastern Data. "For years, we've combined an exceptional product line with personalized customer service, and the market had been very receptive to our formula. As we continue to develop our sales force, product offerings and vendor relations, we expect 2007 to be a solid year for growth."