Distributor Council Report: Good Growth Ahead

Looks like another year of double-digit revenue growth ahead for vendors moving product through distribution, according to the second annual Tech Distribution Outlook Report from the Global Technology Distribution Council (GTDC). The 2018 report provides a view of where the industry is headed from the perspective of channel leaders, worldwide.

In 2018, 70 percent of vendors surveyed for the report expect to realize double-digit growth, compared to 55 percent last year. GTDC notes that this increase is indicative of healthier economies but is also due to accelerated adoption of digital technologies that increase business productivity and efficiency.

The report looked at cloud, data center/hyperconvergence, IoT, mobility, professional audio/video, security, services, vendor relationships and vertical markets. The commissioned 2018 Tech Distribution Report was done by CommCentric Solutions, and included responses from more than a dozen distribution and vendor channel executives, and more than 50 vendor leaders.

GTDC’s Tim Curran

“All of the report findings essentially confirm the fast-evolving value that distributors continue to deliver — well beyond point-to-point products and services that essentially defined the industry’s earlier years,” said Tim Curran, CEO of GTDC. “Comprehensive multivendor solutions are now undeniably imperative. Vendor partners ‘get this’ and are finding dynamic new ways to work with distributors in addressing increasingly complex channel and end-customer requirements. We expect 2018 to be a pivotal year.”

At the core of many IT offerings – security, data center, mobility, IoT, etc. – cloud ranked No. 1 in terms of where distributors expect to make the most progress in 2018. This year, cloud-related services also ranked second among distributor offerings that vendors expect to grow the most in 2018. No. 1 was partner recruitment.

Security, IoT and data center focus areas rated at the top for channel progress this year.

Hyperconverged infrastructure is viewed as a big opportunity for the channel, while IoT continues to take shape in the channel with distributors signing IoT-focused vendors and also launching dedicated IoT business units. According to the report, IoT is the next big wave and will require distributors to act as super integrators across IT, telecom, and consumer electronics.

Seventy-five percent of distributors cited security as the most active category for new vendor partnerships, which means that security will continue to be a growth area for the channel. Security needs have broadened beyond the network, as cloud becomes an intrinsic solution driver and security risks soar, say the report authors.

The report also cited mobility as incorporating many technology categories, i.e. security, cloud, IoT, etc. Vendors and distributors expect more companies to embrace mobile solutions in 2018, with an increasing number of small and medium-size companies realizing productivity and efficiency gains, as new management capabilities come into play.

Services have been a growth area for distributors for several years, and will continue to be a growth driver — particularly, cloud services. In a 2018 Insights survey, channel vendor executives expect cloud-related services to be among the highest growing services this year, sandwiched between partner recruitment (No. 1) and partner enablement (No. 3).