Running your business News
The Role Of Distribution: Evolving For A Changing IT Landscape
Joseph F. Kovar
A panel of distributors moderated by the head of the Global Technology Distribution Council (GTDC) said distributors are more focused than ever on helping solution providers architect solutions that meet clients' fast-changing requirements.
Distribution is in a state of continuous evolution as distributors look to bring bleeding edge technologies and services to a channel partner community hungry for new ways to help clients tackle a wide range of issues.
Executives from several of the IT industry's top distributors told an audience of MSPs at the recent NexGen 2019 conference that innovation is the top priority in a business which has long gone beyond its traditional product focus.
NexGen is produced by The Channel Company, CRN’s parent company.
Frank Vitagliano (left, in photo), CEO of the Global Technology Distribution Council (GTDC), used NexGen to moderate a panel of three distribution executives in what he said was one of the first, if not the first, times that the GTDC did a presentation in front of an MSP audience.
Vitagliano started the discussion by introducing the GTDC as a trade association comprised of 21 of the world's largest distributors, with three of the biggest--Ingram Micro, Synnex, and Tech Data--on stage to talk about the evolving importance of distribution.
Vitagliano said he himself saw the value of distribution when he served as the channel chief of three vendors, including IBM, Dell, and Juniper Networks.
"During that time, I was a great partner of distribution," he said. "I believed in it. They helped me get product to market very, very successfully."
However, it was only after Vitagliano became CEO of a regional solution provider, Houston-based Computex Technology Solutions, that he really began to really understand the value that distribution provided.
"It was a different type of value," he said. "It was not a value of, ‘how do I move product.’ It was a value of, ‘how do I grow my business?’ And ‘how do I get help doing that?’ And I really got to understand that."
When asked by Vitagliano to describe the value of distribution and how it is changing, Stacy Nethercoat (right, in photo), vice president of cloud solutions for Tech Data's Americas business, said that people have been predicting the end of distribution for years.
"I've been in distribution over 20 years, and it's kind of funny to be in a constant state of defending it," Nethercoat said. "But nonetheless, it's been really a sea change, certainly in my area. A lot of people talk about cloud as somewhat new, and the reality is it's a decade old."
However, Nethercoat said, the last two to three years has seen significant changes in terms of the investments that Tech Data is making around not only the cloud but also IoT, security, analytics, and mobility, as well as in terms of digitizing its own core business.
"We recognize that your customers are demanding more from you and you're going to demand more from us, both in terms of unique capabilities or offers that you can take to market, but also to help make sure that all of you are very profitable," she said.
To remain profitable, distributors have to be constantly looking at ways to enhance their offerings and optimize the cost of those offerings, Nethercoat said.
"I think what's really cool is the different types of conversations we're having with partners nowadays where we're going deeper," she said. "And I'll say it's a more complex relationship with our partners around partner-to-partner scenarios or IP sharing, or co-developing solutions. And so I think it's super exciting that we are in a position to support and impact your businesses in a way that if we go back a decade or more ago, I think we were more behind the scenes."
Distribution is in the midst of an evolution, said Rob Moyer (second from right, in photo), senior vice president of Synnex's Stellr cloud and mobility business, which until May was known as CloudSolv.
"We've always augmented capacity for vendors and partners," Moyer said. "It's just that what is needed has changed. So you see more partner-to-partner engagements. You see us getting closer to the end-user because we're bringing more technical skills to the party."
Furthermore, Moyer said, distributors collectively have deeper pocketbooks than MSPs with which they can place their bets.
"We see the trend lines earlier," he said. "And our job is to help our partners navigate all this change. We don't always get it right. But one of the things I find interesting is, sometimes I feel that we're defending our space. But the other times I'm going, ‘You don't understand our space,’ because so many people already left it."
Moyer said distributors are evolving across multiple fronts, whether it's end-user support, technical support, how they sell, or the skillsets needed to win.
"I think all of us have made big investments," he said. "And specific to us, I look at the technical side. Developers are more important than ever. And there's a simple rule: You follow developers and they'll tell you where the business is going."
Distributors are the key support for helping solution providers do business, said Tim Ament (second from left, in photo), senior vice president of advanced solutions at Ingram Micro.
"We like to tell our customers that work with us and our vendors, if you're looking for new opportunities and you think there's not a way to solve it, don't say no," Ament said. "Come to us, because more times than not, we have a capability that will help enable you to solve whatever your end-user customer is looking for."
Ingram Micro has grown through both organic means and via 32 acquisitions since 2012, and has invested over $500 million in its cloud capabilities to create solutions and the ability for partners to sell and provision those solutions, Ament said.
"Because of the scale that we have, we're trying to get ahead of where the market's going and take that risk because we can, and then bring our partners along, and then ultimately you gain that scale and continue to grow your business," he said.
Vitagliano said that distributors all have some services they provide that many solution providers did not know they provided, and invited the panelists to discuss those.
Ament said that, in a traditional sales conversation, a sales rep would talk about everything the distributor does and hope something sticks to the wall.
"But I encourage you to have a conversation and make sure we know what you're trying to accomplish," he said. "And then we can map those capabilities we have to help you accomplish your goals. And usually, we end up at a much faster cadence towards getting a result."
Ament said Ingram Micro has made significant investments in such new areas as IoT. "IoT is very nebulous, but it's about the edge technologies," he said. "It's about solutions that really deliver true business outcomes. And we're trying to go out there and build those solutions so that you can take them to market and sell them."
Ingram Micro has also invested heavily in its professional and training services as a way to augment partner capabilities, Ament said. These include helping partners work together to solve a client issue, work across multiple geographies, and wrap security around every solution, he said.
Distribution technical capabilities are evolving from the focus of the last 20 years on sales engineering to the new focus on developers, Moyer said.
"So we are sending developers in the field to help with end-users on proofs of concept and really bringing the solutions together so they can scale at the same time they are writing IP that can be reused horizontally," he said.
Moyer cited IoT as an example.
"Everybody in our traditional channel understands the network," he said. "They understand the basics of software. But it's bringing them together, whether it's using containers, whether it's locking down camera protocols and bringing that data back. Sometimes it's just having that engineer at the edge helping our partners really articulate a better, more cost-effective way to lock down edge devices."
Solution providers often remember the distributors as they were a decade ago, and as distributors have grown, partners often find it difficult to navigate around the changes, Nethercoat said.
She cited Tech Data's Cloud Solutions Factory as an example of where her company has invested in new capabilities that, despite all the distributor's press releases around it, partners may still not understand.
"On the cloud side, we've developed what we call click-to-run solutions that are available in our StreamOne cloud platform," she said. "Those are pre-architected solutions. [For example,] Veeam Cloud Connect on Azure is a click-to-run solution available in the platform today. By going in and answering a series of questions, pushing the button, we will automatically deploy that Veeam Cloud Connect solution into Azure, and you're off and running. You bring your own software licenses to that solution."
While some partners would prefer to do such a solution on their own, Nethercoat said that Tech Data, by offering the IP to its partners, can take some of the technical burden from partners who may not have the required capabilities or capacities.
She also noted that Tech Data has its own professional services team to help partners in the field.
Distribution has been changing the conversation with partners in significant ways over the last couple years regarding what they bring to the table, said Ben M. Johnson, CEO of Liberty Technology, a Griffin, Ga.-based solution provider.
"I see them catching up with a lot of hot areas like application development," Johnson told CRN. "They seem closer than even a year ago in being in-line with the people here at this conference. I'm seeing positive movement. They're listening to us."