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tehrlich

Disruption in distribution

Posted by tehrlich in Ehrlich on Air on Jan 7, 2013 6:18:51 AM

Talking to different partners it becomes obvious that current disruptions in the channel are still ongoing and that especially for distributors a lot is at stake. But the situation is not hopeless although some of them might feel that way nowadays.

 

In my opinion there’s a unique opportunity for them to become the match maker between existing VAR ecosystems and service providers that struggle to leverage indirect sales channels. VARs may in turn increase profits with a holistic, blended portfolio of high value on and off premise data management and service offerings. Adding for example high-margin Cloud consulting and other service offerings, will provide VARs with short, medium and long term revenue relevance, cash flow and profitability both inside and outside the datacenter.

 

As a distributor you might ask, what are the options to drive new opportunities with VARs and SPs? Well, there are several as I see it:

 

 

Develop business alliances and potential for your VAR base

As distributor you have the ability to help VARs building strategy and alliances in the SP business. How do I identify potential business? How do I position? What are differences on financial models and licensing terms? Add on services to help monitor SLAs while ensuring capitalization on migration and consulting.

 

 

Create market opportunities for Service Providers leveraging niche players

Some VARs have an unfair share of market or wallet with a client and need to look for growth options. Adding in service and Cloud business keeps them the trusted advisor with extended reach into the customer business. As a distributor you can enable white labeled or “product resale” by sourcing from a SP and convey via the VAR to the end user.

 

 

Provide a Cloud brokerage platform

If you have access to multiple Cloud and SPs, you might think about building a brokerage platform based on partners’ services. An online portal that allows easy access to a multitude of services could be marketed by the VAR to its client base. With the proper line up in terms of licensing, financial models and clearly defined services, pricing and SLA, a VAR could become a Service Provider at full stake.

 

 

Build a channel ready strategy and access for Service Providers

You have the skills, knowledge and existing customer base to help Service Providers building channel ready services. From a packaging and design, as well as channel incentive models to generate and develop new business up to financial handling and rebate and kick back solutions.

 

 

Enable VARs and Service Providers with packaged tech- and business solutions

There are VARs that plan to move to SP business and distribution can support to develop infrastructure and provide ready-stacked solutions such as FlexPod, ExpressPod and Amazon Web Services (AWS) to them. Leveraging your distributor portfolio based on software, security or management solutions opens more routes to capitalize on and engage closely with SP and Cloud providers. Also, you could invest into a Cloud infrastructure yourself and provide it to potential or existing SPs to help them get to market faster, be efficient on cost, have a central point of support and remain scalable and profitable.

 

 

Provide end-to-end business coverage for market models

I am sure, as a distributor you have the resources and knowledge on how to manage channels. Providing additional services and new routes to market will allow you to take control and steer the business development for and with the vendor. By managing the SP and Cloud Providers with regards to quality and educational set up and monitoring, you will have a holistic view of the business and can create value for all parties involved.

 

 

Finally, let’s talk about the role manufacturer play in this setup. They need to work with distributers to create a compelling extension to their VAR program. This should for example include incentives and capabilities that highlight the VAR’s value to clients. I believe distributors have an increasingly pivotal role as match maker between service providers who need a channel to market and channels that require cloud services to retain and grow relevance and profitability.

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