So says Rob Matthews, MD of the IT supply chain division at JSE-listed Siltek Limited who points to research conducted by the US-based publication Computer Reseller News among leading American distributors to back his view.
"The CRN Distributor Census revealed that the distribution channel continues to grow faster than the total market: US distribution revenue rose some 20% in 1998. Indeed, Jim Manton, president and chief operating officer of one of the US's larger distributors, Pinacor Inc, has predicted that distributors will continue to grow at twice the rate of the overall IT market," he adds.
Matthews attributes this to the changing role of distributors in the IT supply chain arena.
"Distributors around the world are taking on more responsibilities for OEMs and resellers and are fulfilling a market need which other companies in the IT supply chain can fulfill," he explains.
"For example, distributors are well-placed to add value in the enterprise solutions arena, as well as in the growing demand for white box integration and configure-to-order systems in partnership with vendors," he says
Matthews believes that through the development of the bleeding-edge IT infrastructures required to cope with the logistic demands of distribution, distributors are also best equipped to provide the backbone for the emerging electronic-commerce channel. Indeed, he says, far from threatening distributors, e-commerce will provide distributors with new opportunities.
"As Web-based sales drive down front-end prices, there's an increasing need for sophisticated logistics and delivery functions. In addition, the trend in the IT supply chain of vendors actively competing with distributors and resellers in an attempt to gain additional margin will be counter-productive.
"This confusion of roles is a short-term strategy which can't be sustained without vendors having to invest significant sums in new infrastructure which distributors and resellers already have in place, in order to provide the value-added services increasingly demanded by end-users.
"The new IT supply chain is about balancing competitive pricing with value-added services. Distributors, with their economies of scale can ameliorate operating and logistical costs across their entire product range. And with their infrastructure geared to handle the logistics involved in distribution, they can provide the channel with more than just box delivery," Matthews concludes.
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