New EMEA distribution alliance (The Technology Channels Allianc

  • Distribution faces an increasingly challenging landscape with SaaS delivery and VARS ****** towards a service based model. Their recent announcements and activities demonstrate a recognition of the need to change and adapt; to find a niche and a pivotal role in our fast-changing IT industry. Their traditional model, to facilitate transactions and provide slick logistics, has morphed (although these two requirements haven’t gone away), but now they offer value in new and innovative ways. They have always been a great source of new technologies but now they offer them through online Marketplaces. And devices are still required but are now a commodity and sold as such. And most practices have developed a greater skills base to support service-led selling. The larger distributors have made these changes, but the smaller, regional VAD’s have a bigger challenge as their customers, the VARs, are themselves ****** towards a service-based model (with less money in deployment), and so effectively eating their lunch!

    There has been much discussion around the move that VARS have had to make in their entire business structure to support a consulting and service-based model, rather than a project-delivery income and margin business. Hardware product margins are commodity, software product margins have become the remit of the vendor, so for the most part the consulting, pre-sales scoping, post sales management and the support have become the whole pie that needs dividing up amongst the supply chain. And nature dictates that the bigger players wield the most power – so small VARS and regional distributors are having a tough time fighting their corner.

    The new EMEA version of the GTDC, the TCA, is attempting to bring cohesion to EMEA distribution in the form of a social charter and a charitable foundation that excludes no worthy EMEA distributor in a bond of “knowledge share” – with events, research and case studies that help their members work more successfully with vendors and each other. Personally, I think this is a worthwhile and encouraging initiative as distribution absolutely has a place in the value chain but some (less influential regional VADs), may need a steer around best practice of how to work with large, powerful and dominant vendors. Seeing distribution club together to support each other and provide leverage can only help the industry and prevent large vendors push discriminating business practices.

    And so, to the smaller VARS, they too need to form alliances, be that buying groups or syndicates of VARS with complimentary skills. Small VARS can no longer work in isolation serving the needs of their local customers alone; they need multiple vendor partnerships (to be able to offer the variety of cloud solutions that customers can access and see online) and also strategically they need to form partnerships with each other to be able to offer the range of services required by the client. Our research substantiates this and hence one of the many reasons we built Channeliser, to help IT companies, of all shapes and sizes, find each other and form partnerships.

    Reference to Channelweb article.