Key Questions Emerge from Distribution's Evolution

What should solution providers expect from IT distributors, and what should they do to maximize related partnerships?

By Tim Curran

More than 30 years ago when the IT distribution industry began to take shape, the needs were very different. Pick, pack and ship was the mantra. Warehouse shelves were stuffed with stuff. The supply chain links clasped tighter with each year that passed.

Promotional incentives came and went at a dizzying pace. Restrictions forced solution providers to choose primary and secondary sources for certain products. Changing distributors could only be done during designated periods.

As open sourcing became prevalent, the landscape started to change. The so-called “aggregator” model faded into extinction. E-business roots took hold. Services evolved. Instead of moving boxes, distributors provided solutions – and more than just product-based solutions. They created partner ecosystems, vertical market programs, demand-generation activities, advanced technical support options, managed services programs, unique credit offerings and much more.

In short, distributors became a different type of channel partner, with deeper resources and considerably stronger partnerships.

The world changed – and so did distributors.

Then, in the late 90s, the IT distribution model came under intense pressure from what was presumed to be the future: the direct model.

The truth is that the direct model was never really anything new. Distributors essentially came into existence because direct selling was insufficient for reaching and effectively serving mass markets. Times haven’t changed all that much when you think of it from this perspective.

Distributors are more specialized nowadays. They possess greater market and solution knowledge. Systems are vastly more sophisticated. And, most importantly, they’re amply equipped to serve the channel. The direct model still exists, of course, but the obsession about it has moved on, just as distribution has moved on from the days when logistics and inventory management largely defined success.

Sure, getting product to the right place at the right time remains crucial. Today’s profile of IT distributors, however, goes well beyond this fundamental capability. Distributors now help solution providers and vendors win, not just fulfill, more business. The roles and core competencies are more strategic, the methodologies and practices more advanced, and the focus areas more targeted.

 

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