Despite the global financial crisis and a mature market, new ‘kid on the block’, Vadis Systems, recently jumped into the distribution game in order to address the emerging cloud phenomenon and the opportunities in the channel. Since opening up shop in 2009, the start-up distributor has scored a host of significant partnership deals. From ThinkGrid to NetLeverage to Acer and MailGuard, the distributor now has 13 vendors on the books. Vadis sales director and CEO, Gerry Tucker, caught up with JENNIFER O'BRIEN to discuss the changing role of distribution, its brave move into the market, along with opportunities for the channel.
ARN: What are your top areas of focus?
Gerry Tucker (GT): Cloud is a rapidly growing section of the marketplace. We’re seeing two distinct growth areas in the market: the SMB (the sub-50 to 75 seat level) and then the mid to larger enterprise level, where there seems to be two distinct strategies being deployed in terms of the cloud. If you look at large enterprise, a third is much more around private cloud. In the SMB space we’re seeing clients look to move much more of their infrastructure in a single step into the cloud. In the mid-tier level, it’s much more focused - it’s around virtual server infrastructure. It’s maybe around their Exchange. It is picking pieces of their operations so they can move in. Companies are looking for better technology, looking for access to enterprise-grade technology, but they are looking for it in a business model that meets more of their Opex environment. So they are looking for partners who can deliver that, either through managed services or outsourcing services.
On the infrastructure side, we’re seeing growth in networking. In storage, the big growth areas are disaster recovery and backup. We’re working with the channel to help them provide a broader solution across all three areas so it’s not just a storage solution, but a storage solution, plus security, virtualisation and cloud.
ARN: What were the reasons for hatching Vadis?
GT: We looked at the marketplace and could see that there were several points of disruption happening. Things like cloud were changing things. Managed services were changing how end users wanted to make use of technology. It was changing how the reseller market would need to address some of that marketplace. Obviously when we opened up shop, it was around the time of the GFC as well. So there was a focus on how can we do things better with less. How can we do them more flexibly? At the same time, vendors were looking to get more value out of their distribution partners. And so the concept of value added distribution – hence the name Vadis -- of a full service distribution business that was looking to get out there and drive business aggressively for both our vendors and resellers was one of the prime drivers for us. We could see that the economic situation and the technical situation were causing several points of disruption -- and that’s usually a good place to start looking for opportunities.
ARN: There’s a concern amongst resellers about the distributor’s role in the cloud? Where does Vadis fit into the equation?
GT: In the cloud, like anything, there are many different aspects to it. There’s a commodity end to the cloud as well that will continue to evolve. At the commodity end it will be very much a volume business. That’s mostly going to be at the smaller (10 seat/SOHO type environment) where people are coming in and saying they want one or two mailboxes. With the traditional distribution/volume type business I’m not sure there’s a great deal of value to be added by a distributor other than writing credit. There’s no fulfillment in terms of stock handling because it’s all in the cloud.
As you move up into the higher end, the SMB/SME space, there’s definitely a need for solution-based offerings. Clients are coming to their partners and trying to identify: ‘Here’s my requirements can you put together a solution for me? Can you architect that for me? The Vadis strategy is to help people identify what those solutions should actually be and facilitate the partner’s ability to do that. We look for vendors -- whether in the cloud, security or infrastructure – and have a strong channel focus, and understand how the channel operates. Things like the cloud and the managed services market are changing the nature of distribution. Having said that, it’s also important to understand that there’s still going to be a portion of the marketplace that wants on-premise solutions for some time. Our strategy is to be able to offer both to the marketplace. We don’t believe everybody should go cloud. We think there’s definitely value in doing it, but we also think it’s going to be very much a hybrid approach.
ARN: What’s it like being that new kid on the block?
GT: It has its challenges. I think, like any new business, you have to establish credibility. You have to establish who you are, what you are, and what you’re bringing to the equation. Having said that, I think there’s a lot of interest in terms of what we’re doing. Both from the end user, the channel and the vendor side we’ve been really very pleasantly surprised by the level of engagement. There are these areas of disruption over the last 18 months to two years that we’ve had a lot of people focus on, and ask, ‘How can I do things better? What does this mean for me?'