Distribution is what binds vendors and resellers together. But the picture for many distributors is rapidly changing as the the old three-tier model undergoes a major reshaping.
ARN Deputy Editor, Hafizah Osman, spoke to Westcon-Comstor Asia-Pacific executive vice-president, Wendy O’Keeffe, about what the current distributor space looks like and areas distributors can benefit from.
What are some key elements required of a distributor?
The bottom line is, we as distributors need to provide a compelling go-to-market for our vendors and a compelling supply chain for our resellers. In that, there are a couple of key areas that we need to be good at.
From a vendor perspective, it is to have relevant channels – channels that allow us to market their products and provide them with exposure. We have to provide specialisation, so things like technical specialisation and the know-how of vendor technology.
So disties need to understand that well, in addition to understanding vendors’ solutions and programs. Some of them can be complex and hard to consume, so our role is to help our partners understand the technology and for us to provide a level of specialisation around it.
We also have to do logistics, and that is one of the core elements, whether that be services, software or hardware.
Basically, it’s all about looking into services that support a reseller’s needs and we need to have the right inventory. Financing for the channel is also another area disties can look into.
In terms of partner relations, what do distributors need to do?
It has always been our role to keep customers educated so they can adapt to the market and thrive. Technology continues to be increasingly complex and navigating through a multitude of vendors can be time consuming so, it’s our role to simplify that as much as possible. We need to constantly be thinking about how to create more opportunity or lead generation.
If your lifecycle of products is in its infancy and quite complex, you need quality partners. That means they need to have a lot of technical expertise and profession in what they’re doing as the product moves into a consumed environment. But if a product has reached its maximum selling volume, you need to have wider and deeper channels.
What will the distributor space look like for the rest of 2016?
From a market perspective, we’re going to see a lot more global distributors within the Asia-Pacific region. That means most of these global distributors have the opportunity and cash flow to invest in tools and systems. As a result of that, we’ll see a lot more sophistication in offerings and enabling products to extend their geographical reach.
2016 will also see distributors becoming more sophisticated with their Cloud platforms, and that is important in being a capability-based distributor versus just offering products, software and services distribution.
What sort of new markets can distribution move into?
The Internet of Things is a new and different route to market. It is a big opportunity and many businesses are already having conversations about this.
So from a market perspective, it’s going to drive a lot of different go-to-markets for not only vendors but also resellers. It’s a completely different channel. Also, in terms of verticals, disties will have a bit more specialisation in specific fields.
Distributors will start to align well within verticals such as government, education, or medical. This will be a trend from a distribution perspective in the coming years.
Going forward, we see three key areas for distributors to focus on, centred around having relevant channels, logistics as a core element as well as financing for the channel.