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GTDC’s Frank Vitagliano: IT Distribution Consolidates, But Still Key To Channel Success

‘I think the vendors will benefit from stronger distributors and ones that make significant investments because the vendors will take advantage of those. I think the solution providers and the MSPs will benefit. And then finally the end-user customer will benefit. So I view it as very positive,’ says GTDC CEO Frank Vitagliano.

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How has distribution done over the last year in the face of the COVID-19 coronavirus pandemic and other changes?

There is a really important point that I think people have to really understand and give the distributors credit here. We all know how significant the last year has been in terms of changing everybody’s lives and changing frankly, everybody’s way of doing business. It was incredible how quickly distributors mobilized their people and processes to take a leadership role in what’s gone on in the last year. So they started by moving thousands of inside sales and support people to work from home like every other business had to do. They had traditionally had huge rooms supporting their customers, and essentially overnight they went from that to work from home. So that was a big transition.

The second really significant piece was, there was a number of areas of their businesses that they couldn’t do that, that didn’t lend themselves to work from home. Obviously I’m talking about warehousing and logistics. And that had to get handled very quickly. The first issue was obviously ensuring the safety of their people, and they quickly were able to figure that out. And as a result, the IT supply chain continued to move pretty seamlessly. Initially some of it had to do with, there was inventory in the channel, as distribution has always had, and always will. There was some degree of inventory in the channel, whether it was 30 days, whether it was 40 days, but there was some degree that was able to fill the gap initially.

What happened then?

The distributors started to leverage their longstanding relationships with the vendor community to quickly ensure that we could get access to inventory globally. And whether it was a smaller distributor like Esprinet in Italy or whether it was a big global distributor, like Ingram, Tech Data, Arrow, or Synnex, those folks quickly began working with the vendors. And inventory flowed. And not only did inventory flow, but then distribution started doing what they always do. Because you’d expect them to manage the inventory piece, assuming that we could get around any shortages that were caused by either manufacturing or product shortages or component shortages. But then they started putting unique services in. They did training work from home process and procedures for their customers. They put bundles together that enabled people to quickly deploy work from home. And probably most importantly, they were a consistent source of stability from a financing standpoint, with flexible creative financing programs that really worked and honestly provided a sense of comfort and a sense of stability to a lot of small solution providers and MSPs that honestly potentially had cashflow problems in front of them. And the distributors stepped up and really helped them.



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