The Role of Distributors Is Disrupting the Channel Industry

By Tim Britt

Tim Britt

With the year in full swing, the changing role of distributors will become a growing source of discussion for the distribution-heavy channel industry — especially in the technology sector. Since the way we work has completely changed, more people are looking for better technologies to enhance our digital journeys.

For many white-collar workers, for example, the flexible, hybrid working experience has become the norm. Many of us are still becoming used to the dual purpose of our household workspaces now that the kitchen table has become the conference room, the break room and a paint-stained studio for the kids. So, it’s no wonder that there is a rising demand for technology that can accommodate our life changes.

But, with the growth in customers buying technical solutions, technology companies are recognising that this rising demand also means evaluating the way they sell their product — with this, the channel industry will have to adapt to new ways of selling.

In 2022, many tech companies are increasingly choosing to interact and bill customers through a select number of partners, instead of using direct translation models. The benefit of this is that it can help build stronger, more seamless relationships with their customers as well as create more personalised customer journeys. Companies looking for the best route to market from vendor to customer will have to modify strategies and partnerships to ensure they’re delivering real benefits to their customers as the market changes this year.

Distributors and the Domino Effect

Correctly managing and understanding the role of how each channel partner contributes to business success is key to making these partnerships work — and no role is perhaps more pertinent than that of the distributor.

Distributors have become an anchor for the channel partner model to work, especially in an industry seeing such huge growth. Changes in the role of one group of channel partners will affect the strategy of other groups wanting to prepare for market volatility. With differences in capacity in recent months because of supply chain issues, understanding this domino effect is important in understanding why the shifting role of distributors promises to be one of the channel’s biggest disruptors.

Business models are changing immensely. This year we’re seeing the integration of new business priorities for many companies and, as such, various parts of the channel have had to adjust to these new prerogatives, especially with the growing adoption of as-a-service solutions. Today, some distributors’ largest suppliers have made the shift to as-a-service already, an acceleration which can be attributed to the advent of fast-paced digital transformation during COVID-19, a shift that shows no signs of slowing down.

Stepping Up SaaS: From ‘Maybe’ to ‘Must’

With the SaaS market continuing to grow by 18% each year, the morphing role of distributor relationships is more important than ever. Distributors don’t just provide an advanced transaction marketplace for software-as-a-service (SaaS) vendors but also provide value-added services around new resellers, recruitment, enablement and knowledge-based services. Many SaaS services rely on their trusted distributors, choosing to leverage them as a core part of a successful business strategy.

This means that in 2022, distributors need to start thinking about their offerings as a whole, rather than the one aspect that brings in the most revenue. For example, they need to think about how they provide support for their level two and level three vendors — this is where partners need support the most because it helps build a sense of loyalty amongst customers.

Now, with so many players currently in the market, distributors need to create value with integrated services to stand out. This year, understanding the role of the distributor and how to leverage it is fast becoming a commodity item, rather than a luxury.

Tim Britt, the head of channel EMEA at Dropbox, is experienced in building and developing high-performance sales teams and partner programs across Europe, the Middle East and South Africa. He has more than 16 years of experience in the technology sector, working for global organisations such as IBM, Polycom and Cybereason, where he has gained experience selling complex solutions across SMB and enterprise markets and knowledge of how to manage global transformation projects. You may follow him on LinkedIn or @Dropbox on Twitter.