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Two sides to every story

Two sides to every story

Every good debate needs two sides to the story and that is definitely the case when we talk about service-based distribution. The concept is the latest development of value-added distribution; something that has been hijacked by marketing departments during recent years to such an extent that it has become difficult to define. Some companies will tell you they are a value-added distributor because they have a delivery truck, a line of credit and a website - not quite how the term was intended to be used.

Genuine value-added distribution definitely has a place in the market. For me, these companies can be defined as those with staff that can offer detailed advice about the implementation of technically difficult products. Furthermore, they can relate these products to those of complementary offerings and help resellers get the best out of the solutions they are designing for customers.

There is undoubtedly reseller demand for these pre-sales consulting services in the market and there are a handful of distributors doing a good job of providing them. From a vendor point of view, it offers a level of reassurance that the benefits of complicated technologies can be effectively communicated by a larger pool of resellers. So everybody wins.

Or do they? While levelling the playing field will always win a popularity vote, it is not going to be welcomed by larger or more specialised integrators anytime soon. These companies have invested heavily in developing those skills internally so it is hardly surprising. Why should they spend tens of thousands of dollars training staff to deliver these solutions when a smaller reseller can service the same opportunity by leaning on the resources of a distributor? That question is even more pertinent when you consider that the distributor's resources might well be 'funded heads' whose salaries are paid by major vendors.

Of course, you can't please all of the people all of the time so distributors should not be criticised for providing services that are in demand. But the provision of managed services on behalf of resellers changes the game again and effectively brings distributors into competition with companies they would normally consider their customers. Where, if anywhere, should a line be drawn in the sand and not crossed?

Distributors like Firewall Systems and Uptime Distribution will argue that the managed services they are providing enable resellers to close deals they would otherwise be forced to walk away from. But, some integrators will argue that those distributors are winning dollars they shouldn't even be competing for.

In reality, it is a free market and time will tell whether enough resellers see value in these managed services for them to become well established as an acceptable channel model. While I can understand the frustrations of larger integrators that want to keep the cream for themselves, my gut feeling is that they will dominate the solutions space anyway because they have a broader and deeper knowledge than any vendor or distributor can hope to build. If smaller resellers can swing off the coat tails of distributors to land occasional bigger deals, all well and good. It is breaks like this that help skilled smaller companies achieve the growth their dedication deserves.


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