“Born in the cloud” companies don’t fit the traditional reseller model. Many have been founded by former employees of managed services businesses or by the owners themselves, folks who have sold or closed their old practices. By combining the latest advances in virtual technologies with a strong entrepreneurial spirit, they now have the ability to create leaner organizations that can be profitable from day one.
The wealth of cloud and managed service tools available directly from vendors coupled with a reduced interest in hardware and traditional software sales has left many wondering what the role of distribution will be in the future. That concern was voiced at several recent channel events in keynote presentations as well as in private discussions with a few rather successful solution providers. One of the most commonly asked questions is if their distribution partners will be able to continue offering the same level of support in the future. Will they still have access to the marketing development funds (MDF) and presale engineers to close more business?
While I can’t offer any guarantees, chances are those services will not only continue, they could increase over time. While the IT channel isn’t the fastest at adopting change, distributors have been quick to acknowledge the value of managed services and the cloud. Most developed strategies and the infrastructure to help their partners streamline client onboarding and many support processes. Others include a comprehensive suite of servers, storage, networks, virtualization and security that solution providers can use to build private, public or hybrid clouds for their customers.
The list early adopters of these programs includes, but isn’t limited to:
- Avnet The distributor’s CloudReady program brings together a host of vendor and custom resources that solution providers can use to create or expand their virtual portfolios.
- Ingram Micro After introducing many of its partners to managed services with the Seismic Platform and Virtual Services Warehouse in 2006, the VAD launched the Ingram Micro Cloud earlier this year.
- SYNNEX The distributor’s CloudSolv program gives its resellers a host of options and a greater capacity to offer virtual services, automate backend processes and manage licenses.
- Tech Data The VAD’s TDCloud offering is complemented by the TDCloud Academy, an education program designed to give partners the expertise they need to build successful practices.
The New IT Provider
Whether on their own or supported by affiliated vendor communities, distributors continue to focus on the things they do well. In recent years, their priorities have changed to include managed and cloud services, but they still develop and deliver the other solution, support and financial resources their partners use to grow their businesses. Their programs continue to help new providers get their practices off the ground, with a host of options for those looking to plug gaps in their portfolios.
While distributors still derive a significant amount of their revenue “moving boxes,” most have a firm grasp on the shifting IT landscape. Just like solution providers, they remain focused on the needs of their customers (their partners, in this case) and either have to adapt to the new business climate or risk their financial stability.
With so many new IT services companies “born in the cloud,” will IT distributors be able to provide enough value to recruit those providers to their partner programs? In fact, some providers and vendors believe their position has never been stronger. Previously, industry experts suggested the cloud and managed would be the death knell for distributors, or at least would lead to significant consolidation. Those expectations haven’t materialized. Most VADs are reporting record sales and partnership numbers, boosted in part by the same offerings experts predicted would lead to their downfall.
Today’s Value-Add
Today’s IT distributors offer much more than the order fulfillment and delivery services they’ve perfected over the years. The value-add has grown to meet the evolving needs of their partners, including:
- Traditional software/hardware The benefits haven’t changed significantly over the past few years, with the exception of predictive and diagnostic reporting
- Cloud As mentioned previously, a number of distributors currently offer a variety of programs to help their partners develop viable cloud businesses. That includes everything from education and business tools needed to get started with this quickly evolving solution delivery method to a myriad of options for hosting and client billing.
- Peer collaboration Several distributors provide forums for select partners to meet and discuss opportunities and challenges in their channel businesses. Each member must be committed to sharing best practices, ideas and internal metrics with peers. Group rules and benefits vary depending on the sponsoring distributor, but each partner is expected to contribute equally to the conversation.
- Support services From marketing and lead generation programs to financing and vertical market expertise, VADs continue to develop programs that their partners need. Some even offer supplementary staffing, help desk support, and pre- and post-sales engineering support.
Many distributors leverage their own internal resources as well as those of the vendors they represent to help solution providers close new clients or ensure implementation projects go as planned. Even those who manage a “born in the cloud” company can benefit from that type of support.
It’s a good time to ask your distribution team what they’re doing to support channel transformation. And don’t forget to turn the table and ask if your company is as focused on the future as they are.
Brian Sherman is principal consultant at Tech Success Communications, an IT channel business development and marketing firm. He served previously as chief editor at Business Solutions magazine and senior director of industry alliances with Autotask. Contact Brian at Bsherman@techsuccesscommunications.com.
