Distributor Cloud Initiatives: Do They Help Or Hinder?

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As much of the focus of the IT industry moves toward the cloud, distributors who once drew their profits from pick-pack-and-ship services, along with logistics and finance, are finding themselves hard-pressed to carve out a new role for themselves in an environment that is becoming less dependent on customer premise equipment. While many distributors are attempting to get out in front of the transition through various channe-enablement strategies and sometimes their own cloud services, some VARs, integrators and MSPs are beginning to wonder whether such efforts will be helpful to them or competitive to them.

According to some partners, the answer to that question depends largely on strategy and the portion of the market that the partner serves. Many of the distributor efforts tend to be geared toward the small market and, arguably, portions of the midmarket.

"There's no doubt about it," said Paul Cronin, senior vice president of Atrion Networking, a Warwick, R.I.-based integrator. "Distributors are trying to come downstream to the partners that don't have the capability, or the resources, to invest in developing their own offers. So after I've made the investments necessary to deliver full value to my clients, I end up looking like the high-priced guy. But it's not really an apples-to-apples comparison because I've built more value into mine, and can deliver it on my own.


[Related: Avnet To Acquire Cloud Automation Integrator, Seamless Technologies]

"It's kind of a confusing game right now," he continued. "It's a situation where you've got channel partners, suppliers and distributors competing in a single landscape without clear rules of engagement. You might get faster adoption, but it causes a lot more confusion."

Cronin compares the situation to the carrier model, except instead of selling circuits, full solutions are often on the table. While the current strategies are mostly aimed at the lower end of the market, Cronin intends to closely watch developments, hoping that the strategies do not cut into his opportunities with larger customers.

A recent example of a distributor's attempt to shore up its cloud position involves Avnet's announced agreement to acquire Seamless Technologies -- a move that is expected to substantially extend the automation capabilities of the distributor's services division, and, by extension, the distributor's network of channel partners.

"I understand why they're doing it," said Bob Cagnazzi, CEO of BlueWater Communications Group, a New York-based integrator. "But like a lot of things that distributors do, they don't always apply very well to the partners who can make those investments on their own. We're not going to go to Avnet for those types of services. We build those kinds capabilities ourselves ..."

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