A few years back, the Spanish “Tiki-taka” style of football overwhelmed the competition. Teams like FC Bayern München and Borussia Dortmund had to focus on classic strategies (strong defense, hard work, endurance, patience) combined with creative and innovative ways (analysis, technical finesse, strategy, team play) to find a recipe against the flawless short passing and tenacious ball possession of the Spaniards. Lessons to success and in the end to outshine the competition: observe, anticipate, analyze, take your bet, plan, get the buy in, execute.
So, how could Distribution business in IT be viewed in the light of the above?
Recent history has impacted the way in which IT strategies are being defined. Today, the influence from outside, driven by cloud and mobile applications is tremendously high. Requirements from within the core business of companies are changing rapidly. This also seriously affects how the tools and resources to adopt are being sourced. And of course who is supposed to be a trusted advisor.
In IT, distribution has traditionally been this advisor. No matter if your business is reselling, system integration, service provider or vendor – at a certain point you touch base with the distribution, either directly or indirectly.
Distribution itself has undergone a strategic change, necessitated by new technologies, new ways to consume products and solutions, converged solution stacks and new vendor strategies. Another reason was their classic VAR base’s move towards service-based solutions. As a result, distributors created new terms such as Value Added Distributor, Solution Distributor, or Cloud Broker, to name a few.
What is behind this branding? Is there mainstream still? How is value-add defined?
This is the base and core of a distribution model: market development for vendors and business services to its customers through education, marketing, financial and logistic support; and of course; stimulation and compensation for successful growth of business.
My take: the real added value delivered by a distributor is it´s ability to have a strategic and committed differentiation for its customer and its vendor base. Innovative distributors that are able to think ahead can outgrow markets, enter new territories, be more profitable and attract more customers.
Let´s take the predicted hyper growth on cloud and service-based business as an example: The mainstream is unchanged. It is either about developing new and additional business in a white space area, or enabling competitive win overs. Both will result in additional market share for everybody involved.
The added value is to provide a program, tools and resources in addition that result in more success for the supply chain. Why not consult service providers through and with partners about pricing, packaging and go to market scenarios, probably in cooperation with the technology vendor stack to maximize resources and funds. Provide technical infrastructure through and with partners to ISVs and link it to their VAR and SI base. The bottom line is providing a broader reach to additional end users.
Consequently, vendors will have to realign and reorganize the way they manage their partners and pathways. The future of channel organizations might be around capabilities, industries, verticals and specializations rather then managing distribution, VARs, SPs and SIs. Compensation, billing and licensing models will have to be adjusted.
NetApp has always been all-out committed to its partners and pathways and will continue to leverage the potential synergies that are rising today. The recently launched Distribution Evolution Cloud Computing program for example specifically addresses the big opportunity for distribution, as well as cloud and service providers. Your turn!