DISTRIBUTION
Distribution Faces up to
Changing Markets
Getting the logistics right – having all
In the past, when CPE products ruled the channel, the role of the distributor was easy to see and understand.
Now, given the onward march of the cloud as the basis for application deployment, the distributor has new
challenges to face
the pieces in the right place at the
right time for the reseller, remains
a given for a distributor serving a
channel base that still shift a lot of CPE but
today, logistics is just the table stakes in a
market where products and applications can
be obtained by a download from a web site.
ere are however many similarities
between distribution of CPE and SaaS based
solutions.
e similarities between CPE are similar
but dierent in that the multitude of
SaaS applications, which to all extent and
purposes basically do the same job, is vast
and growing daily. Sure, there is no stocking
issue here but consider the support; before
we get to the issue of customisations, how
does each SaaS application actually work and
integrate with existing business applications?
For the distributor, understanding each
product market and selecting a winning
portfolio of products to support is central to
their ongoing success.
Of course, there is hierarchy of
applications here just as there is/was with
old CPE solutions such as a PBX where the
vendor had a list of ‘approved’ third party
applications it was happy to recognise as
being compatible with their essentially
proprietary piece of kit. In these instances,
the distributor tended to play safe and stick
to the approved list of applications to sell for
bolt-on.
Management consultancy rm McKinsey
say they have identied a combination of
market trends and internal challenges that
threaten revenue growth and protability in
wholesale distribution.
Many channel players may have noticed
that vendors are aiming to build relationships
directly with users and the rise of new digital
technologies makes it easier than ever for
manufacturers to pursue the idea at scale.
e shift from CPE to Cloud
Likewise, customer expectations are
rising; McKinsey says that professional
buyers who shop on Amazon now expect
digitally enabled services such as customised
reporting, multichannel ordering, and full
visibility into distributors’ inventory. To
illustrate the mix within the distribution
channel right now McKinsey adds that
customers expect to make 30 percent more of
their purchases from distributors via online
means.
Driving New Business
e key issue for many resellers however is
how can distributors help them drive new
business models and extract more value out
of deals.
Trade in deals are not often highlighted
in the channel but Distributor Extertis
launched a new scheme at the end of 2019; a
corporate trade-in programme that resellers
can take advantage of for their customers’
smartphones, tablets and laptops. Exertis
says trade-in programmes have become
increasingly popular driven by the higher,
initial cost of top of the range devices,
the residual value that premium products
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retain, the desire for consumers and business
to be using the latest technology, and
the recognition that sustainability is an
important issue for businesses.
Distributor Tech Data says, “Wherever
a partner is now on their journey – and
whatever their destination, we have the
capability to support them every step of the
way. We do this in three main ways: providing
solutions that bring together multiple
vendors and technologies that they can take
to market; giving them access to learning
resources so they can become enabled to
create and deliver solutions themselves; and
we provide skills where they are needed
to support the delivery of those solutions
– either because the reseller has not yet
developed them, or because they don’t have
enough resources to meet demand. Whether
they are just starting out, or on the way to
building their teams and services, and only
need help for a period, we are here to help.
Or it may be that they want to concentrate
their own resources on areas that are not core
to their own business and are happy for us to
perform that work on their behalf.”
www.commsbusiness.co.uk Channel Profiles 2020 | 47
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