There is no doubt that the B2B technology sector is transforming rapidly. The surge in digital marketplaces and the shift towards subscription-based, everything-as-a-service (XaaS) models are revolutionising how businesses acquire, manage, and use technology.
Areas such as cybersecurity, networking, and infrastructure are all undergoing platformisation. Why? In today's environment, enterprise customers are increasingly expecting products and solutions from various software vendors to integrate and interact effortlessly through API-driven platforms tailored to adapt to their evolving needs.
As the platform, SaaS, and subscription-based economy flourish, it's essential to rethink the role of a crucial yet often overlooked segment of the tech industry: IT distribution.
Beyond Logistics and Financing
Distributors date back to the early days of the tech industry. While we aren't talking about the start of the Industrial Revolution here, the 1980s and 1990s were when distributors primarily focused on product logistics and supply chain management.
IT vendors needed their “disties” for their "free" warehousing space for large hardware. Vendors saved money this way; distributors offered partners support via cash flow through credit and financing agreements, which became what was then called “bank and barn” operations.
Distributors would argue (rightly so) that they have always been more than a rudimentary warehouse and bank. Partnering with a distributor and their network of resellers, system integrators, and other channel partners unlocks new channels for IT vendors to promote adopting their products and services.
How? By simplifying go-to-market strategies and providing increased scalability and agility, a distributor helps emerging vendors expand into new markets and allows established companies like Cisco and NetApp to increase their market share.
However, perceptions remain, and it is difficult to shed the “pick, pack, and ship” label given to distributors. That needs to change.
The Misreported End of Distribution
Doomsayers have been predicting the end of the distribution for decades, fuelled partly by the rapid rise of cloud hyperscalers and the shift to platform- and subscription-based models.
In reality, distribution has never been more critical or influential within the tech ecosystem.
Distributors' central role in the supply chain—bridging vendors with resellers, systems integrators, and managed service providers (MSPs)—gives them a uniquely valuable and comprehensive perspective on industry dynamics. Which is especially needed as business itself becomes more complex.
This vantage point allows distributors to assist partners throughout the supply chain in navigating the significant changes in how end-user enterprises consume technology.
Evolving Distribution
The term "distribution" no longer captures the essence of what we, as distributors, do today. If you unpack our role, we are facilitators, enablers, and orchestrators.
With the advent of cloud computing, edge computing, AI, and IoT, we, as distributors, have had to evolve into solutions providers, enabling business users to access a diverse range of multi-vendor products and portfolios.
We guide partners through complex digital transformations and help integrate advanced technologies into business operations. We also expedite the adoption of new software across borders and provide data-driven insights that help our tech vendors and resellers make better decisions and discover new growth opportunities.
Additionally, our education and enablement services play a crucial, often underappreciated role in addressing skills shortages and promoting knowledge sharing.
In fact, according to the Global Technology Distribution Council (GTDC), distributors act as “force multipliers” for innovation, with our value and strategic significance on the rise. The GTDC's recent Innovation Enablement Guide highlights that from AI and machine learning (ML) to IoT and 5G, vendors and tech resellers rely on value-added distributors to demystify which emerging technologies will generate revenue and attract business customers.
And this is the crux of the evolution of distribution.
A Critical Juncture
If the tech sector were a house, we would be the foundations. Like an almost invisible engine driving the tech sector, accelerating innovation and adoption.
The shift from mere logistics and financing to orchestration and facilitation holds substantial implications for businesses worldwide. The evolving role of IT distributors is pivotal in the widespread adoption of transformative technologies. Specifically, it’s time to rethink distribution for the platform and XaaS economy era.
Strategic Positioning
How do we change this perception effectively? The key lies in how we communicate and the conversations we, as distributors, have with software vendors and IT channel partners. These need to shift from transactional to strategic, functional to inspirational - fostering connections at every level across the supply chain.
Partners collaborating with distributors must also engage more deeply to unlock the partnership's potential fully. Include your distributor in digital transformation initiatives and look at how you can integrate some of your IT systems and processes with ours.
To build brand equity and enhance the value of distributors among supply chain partners, we must demonstrate our strategic importance to people outside of our direct orbit – including industry analysts, end-users, business commentators, and the financial and investor communities. Only once this is achieved will we be able to showcase the actual value of distribution.
