How Can Distributors Serve Cloud Providers?

GTDC SUMMIT — Rumors of the death of distribution have been have been greatly exaggerated — or maybe not. The days of pick, pack and ship are certainly a thing of the past, being overshadowed by distribution-services capability, or, think of it as distribution as a service. And, one of the top issues tech distributors are grappling with today is how to better service cloud providers.

“How Can Distributors Better Service Cloud Providers?” was the main breakout session on day one of the Global Technology Distribution Council (GTDC) Summit, being held this week in San Francisco. With technology consumption shifting rapidly toward service models like cloud and managed services, both distributors and emerging services vendors are trying to figure out how to work together to grow their businesses via the expansive channel ecosystem.

Distribution has a lot to offer emerging vendors, i.e. scale in reach for partners; lower channel entry cost; customer credit and financing; global reach; vertical expertise; multivendor ecosystems; sales and tech training; customer demand generation services; and design and migration services, etc. On the other hand, emerging vendors are the future of tech with solutions such as cloud, mobility, SD-WAN, IoT, etc., and distribution needs that they have.

A panel of five cloud distribution leaders – Steve Robinson, vice president, global cloud solutions with Arrow Electronics; Peter DiMarco, vice president, VAR sales and cloud, with D&H; Jason Bystrak, executive director, Ingram Micro Cloud; Rob Moyer, vice president, software and cloud services with Synnex Corp.; and Stacy Nethercoat, vice president, Tech Data Cloud – participated in a roundtable discussion that addressed the challenges, benefits and myths in this emerging space.

More specifically, panelists addressed questions such as: What is the value of distribution for emerging services vendors? What do you believe are the top myths vendors may have about distribution (model, services, capabilities)? What are the real/perceived roadblocks in partnering with emerging services vendors? What are best practices – what has worked and what has not worked – in partnerships with emerging services vendors?

Why is this important to channel partners? The distributor-vendor relationship is all about reaching the partner and the quality of that relationship directly impacts the channel.

Take, for example, micro segmentation of the channel.

“As an industry we have a tendency to broad brush the channel, which is a mistake,” said Arrow’s Robinson. “We need to look at … what is your cloud solution in terms of the best form and fit to a channel partner? So, we look at VARs, hybrid VARs, hosters, CSPs, and, the newest term TSPs, or total solution providers,” he added, versus slinging a solution on the marketplace.

At the same time, there’s a perception out there that all distributors are the same. Not so, said Ingram Micro’s Bystrak.

“If you vet out your distributors, you’ll see that they make investments in different areas — whether it be the ownership of IP, software to run your business [or] investments made in specific markets. You need to take the time to …

… see what they do differently and leverage that,” he said.

A real problem for distributors taking on emerging vendors is a lack of readiness, not only for distribution, but for the overall channel.

“There are service providers that are just not ready. They don’t have the resources; they may not even have a selling model, and that creates challenges for us to help a service provider build their business,” said D&H’s DeMarco.

Similarly, there’s often a lack of focus and commitment to the distributor relationship.

“The question is, do they have someone devoted to this every day or is it just someone’s part-time job?” queried Synnex’s Moyer.

Clearly, distribution panelists have developed best practices from which emerging vendors could benefit. A strategic one is carefully vetting emerging vendors and not getting to yes too quickly.

“This is about alignment. Aligning what our objectives are, what our roles and responsibilities are, and insuring that the investments are supporting the aspirations in terms of the business that you want to build. It’s crucial that the emerging vendor have a channel strategy, and commitment and adoption within the organization to supporting that,” said Tech Data’s Nethercoat.