When times are changing, one of the toughest things to do is express how roles have altered, especially if those roles have been well-established for a very long time.
That’s where I think we are in terms of the channel right now. In the age of cloud and virtualisation there is a profound redefining of roles occurring, particularly when it comes to expressing what the role of the distributor is today and what it will look like over the next three-to-five years.
Every day, I’m faced with taking people on a journey that attempts to explain this change.
Specifically, the journey is about expressing the new role of the distributor and what it means to the channel. This journey should be straightforward. It should chart how distributors have moved from specialising in logistics plus offering some services to full service and solution providers. For a long time a distributor has possessed many resources, mainly expert, knowledge-based resources, that it has kept to itself, not selfishly but because that was simply what distributors did. But now in the wake of the GFC and the rise of cloud and virtualisation, the cutting-edge distributor is sharing these resources and matching them with real needs in the channel.
I wish I could report that this explanatory journey ends up with the faces of our channel partners lighting up with understanding and exclamations of “eureka” filling the room. Sometimes it does, but all too often it doesn’t.
Instead of instant understanding, I often encounter resistance and doubt. Something doesn’t resonate and this is understandable.
For starters, the channel is characterised by relationships that exist in well-defined territory. As a result, one of the first things a reseller thinks when a distributor approaches them to offer services aimed ultimately at the end user is that the distributor might be an interloper, threatening that relationship by cutting out the reseller. It takes time and a level of trust for the reseller to accept that this is not what a distributor is doing or ever wants to do. After all, the distributor sits in the middle of the channel and only benefits by supporting both ends, the vendors and the resellers. Distributor-delivered services are about creating more opportunities for the channel to be even more efficient and productive. They are about helping the resellers be more profitable and further improve their relationships with their customers.
But the bigger question is one of perception. As the comedian Rodney Dangerfield once said, and I paraphrase, distributors “don’t get no respect". Distributors are still seen as logistics specialists when, in fact, the cutting edge distributor today is a solutions architect. Physical distribution is still an integral part of what we do – services have become a much larger part as we look for ways to continue to build our relevance to the channel.
So what are these services? They range from integration and deployment to third-party procurement and logistics and they are all built around a common theme: what does a reseller need and how can a distributor best deliver it.
Actually, the best way to understand distributor services might be this: in the world of the cloud, the distributor has become a cloud of fully customisable expertise and resources that the reseller and vendor can plug into, drawing as much or as little service as they need, when they need it. For example, most resellers have better things to do with their engineers and tech personnel than risk burn-out by allocating those people to staging equipment. Instead, the reseller can “plug into” our integration service so this work is done before the equipment is delivered helping resellers to meet project deadlines and freeing up their expert engineers to concentrate on high-end implementation tasks.
The same holds true for deployment. The distributor can supply those fundamental technical personnel on site and save resellers overtime costs, staff churn, and valuable engineering time. When I meet with a reseller on services, I don’t provide a standard rate card because for our services to be relevant to the reseller I have to understand their business and exactly what level of service they need from us so we can determine the most appropriate cost model. This kind of “plugging in” is about matching our expertise and resources to a reseller’s very specific needs. Some resellers would like the deployment managed entirely for them, others might want to simply supplement their existing tech personnel – or reach – during the deployment, pairing a portion of our team with theirs.
The same is true for third-party procurement and third-party logistics. One of a distributor’s core strengths is being able to procure the right equipment at the right price and in a timely fashion. But it is the resellers who are often left to scramble to collect the “bits and pieces” for their customers. Again, distributor services means plugging into a distributor’s expertise, tapping the ability to get those bits and pieces that will make up a turnkey solution.
The transition from a 'sales' to 'service' continium
This is a service continuum, not a sales continuum – the distributor service “cloud” is there to tap as a reseller needs in order to drive opportunity and profit far beyond a single deal. Third-party logistics really illustrates this point. Today, many resellers not only need to worry about installation, they have to be able to credibly show they can remove equipment and dispose of it. The rise of e-waste requirements and reverse logistics legislation means that resellers can be on the hook for monitoring what they install and how they dispose of it after removal.
The reseller that plugs into the distributor will find the distributor not only knows how to deliver equipment in a way that ensures the equipment is in the best shape when it arrives, but can also keep the necessary records about the installation and then at the end-of-life make sure it is disposed of correctly, and that security is always ensured. If there is one lesson here, it’s this: the distributor of today and tomorrow needs to be measured by a service standard – its “plugability”. Increasingly the channel will expect this and soon the question will change from 'why are you talking to me about services, aren’t you just a distributor?' to 'I thought you said you were a distributor, why aren’t you talking to me about services that supplement my business?'
Col Rennie is the technical service director for Westcon Group Australia