Johannesburg, 13 Dec 2019
You had to have been under a rock to miss the shifts happening in the technology channel. Cloud models have prompted the entire industry to revisit products, services and customer engagements.
The change can be attributed to the cloud, but that is a catch-all for many changes in the market. Software-defined, virtualisation, micro-services, agile development, XaaS – these are impacting the market in a number of ways, prompting the channel to adapt. Vendors have been more outspoken about this message, not least because they cannot operate their new solutions through the older channel models.
Much of that dialogue has been directed at solution providers and systems integrators further downstream. But distributors are also under pressure to evolve, prompting some soul searching on how they fit into this new market.
“From a distribution perspective, we always just saw the channel as vendor, distributor and then our partners,” said Willie Jansen van Rensburg, Channel Business Development Manager: Advanced Technologies at Axiz. “We didn’t always pay that much attention to what was happening in the end-customer space. We were more led and guided by our partners. But the end-customer now procures and consumes technology differently. So we must ask how we transform ourselves into the future to adapt to these changes.”
New market
A significant part of the changes involve this renewed focus on the end-customer, with the expectation of end-to-end delivery for maximum effectiveness. Vendors have more complex solution stacks, which can be applied in different ways to a more diverse end-user market. The channel between the two has to act in an involved and strategic capacity, or the dots are not connected properly.
“Multiple vendors in our portfolio are asking us different questions. They are placing different demands on us and aligning different strategies with us and how we act through the channel. It’s the whole capex vs opex models. Consumption versus on-prem. There are more ways to create and procure technology.”
Partners and vendors are placing additional requirements on distributors and the roles they can play. The different technologies and solutions provided by vendors not only need matching with customers, but the channel has to build the skills and experience to work with these solutions. This outcome is a little problematic because the vendor solutions have been very successful.
“The last several quarters have been impacted more and more by consumption-based models. Some of these vendor services are growing in double- and triple-digit numbers. But they are outrunning the channel.”
There is the risk of bottlenecks in the channel as it struggles to match vendor requirements. Many partners, particularly those working directly with the end-customers, need help to make sense of the new stacks and their requirements. This is a timely space for distributors that can evolve.
An end-to-end partner
The complex (particularly software-defined) solution stacks bring a cost component with them in terms of resources and people. Support, proofs of concept, pre- and post-sales, certifications and skills development are needed to take the vendor strategies to the end-customer and data centre markets.
Distributors need to break with many old habits or, as Jansen van Rensburg put it, how to act not to be a distributor. The recruit-enable-grow approach of distribution, as well as pipelines for training, events and many other business services, is entirely valid. But these are not value-adds – they are part of the standard expectation.
“You have to go beyond representing a product from just a licensing perspective and teach people how the licensing works,” Jansen van Rensburg explained. “You’ve got to become a trusted advisor, sitting with the partner and the vendor to meet the end-customer, from where the opportunity starts right through to it being installed and supported afterwards.”
Traditional distribution companies aren’t part of the value chain from inception to delivery and beyond. But isn’t that role played by other parts of the channel as well? Not exactly. A distributor that adapts to an end-to-end perspective plays a supportive role to other partners. It’s able to facilitate essential services such as certification, marketing, skills access, proofs of concept, and alignment with many different vendors. The more mature distributors have also established curated cloud services and application development that support their partners’ deployments.
In other words, the right distributor is a valuable end-to-end collaborator. It has reach and experience in the channel that can be put to good use for the market’s newfound versatility and choice. But the change doesn’t happen overnight, Jansen van Rensburg concluded: “There is definitely a massive requirement. You have to build and develop and redevelop your portfolio and platforms to cater for collaboration. You can collaborate with everyone, from SMEs to large integrators. It all depends on what you’ve done internally to do more than traditional distribution.”
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