Will it survive? Should it exist? How are they managing to operate on almost zero margin? And how can they add more value to the channel? These may be seemingly impossible questions to answer, but they are questions that are continually directed at broadline and niche distribution heads.
The fact that one element of our industry is so continually scrutinised is a worry in itself. Surely, if a sector was stable and successful, the question of its future survival would never be raised.
But let’s not kick a sector when it’s down. While the rest of the industry continues to examine the very need for distribution, the distributors are working hard to ensure that they become as necessary to their resellers and vendors as possible.
Of course, this means that resellers and vendors are lapping up the extra attention and encouraging as much negotiation on deals as they can. This is certainly true of Microsoft, which last week announced further delays to revealing its new distribution strategy.
The software giant has coerced its distributors into jumping not just through hoops but, from what some sources tell me, rings of fire. And why not? Winning a distribution contract with Microsoft will undoubtedly cause a surge in reseller numbers, so the winning distributor is likely to find its pockets are fuller because of it.
And yet the winners won’t be downing champagne or smoking cigars. The contracts are likely to have stringent terms and conditions. Also, training, education and qualifying for Microsoft competencies will be arduous, time consuming and costly.
Unfortunately, it is not just Microsoft that this applies to. Distributors have to make their choices as to which vendors’ programmes are actually viable and profitable for them in the long run, after all of the restrictions, provisos and cash-draining incentive schemes have been scrutinised.
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