Value-added distribution is normally the first port of call for any overseas vendor looking to break into the UK with disruptive new technology.
But like a Torquay B&B in high season, have some VADs effectively placed a "no vacancy" sign over their doors as they focus their resources on the successful franchises they have built up, or retrench back to their core business?
According to Adam Davison, director of products at Cloud Distribution, start-up vendors looking to take their first steps in the UK currently have few places to turn.
"The VADs out there are adding value to the vendors they have taken to market but unfortunately they are full and any new vendor coming along has a challenge," he said.
This could be particularly critical given the new wave of technology surfaing in areas such as cloud, BYOD and software-defined networking (see panel, bottom).
Davison (pictured below), who joined the distributor last month following stints at start-up vendors including Expand Networks, Meraki and Exinda, argued that the clutch of VADs that were formed in the noughties no longer have the bandwidth to take on new technologies, branding them victims of their own success.
"The resource and marketing gets sucked into their original vendors that have got big and need their numbers done," he said, adding that this had caused him "consistent frustration" during his vendor career.
"From a vendor perspective, I think there is a need for an evangelistic, next-generation, innovative distributor to help them create a market from scratch," he said
On the face of it, Davison has a point. After all, it has been about five years since the likes of Cohort Technologies and VADition - now Exclusive Networks - burst on to the scene. And many of their key vendor partners have matured into lucrative franchises demanding substantial manpower, for instance Palo Alto and Fortinet in the case of
VADition, and PGP - now owned by Symantec - in the case of Cohort.
At the same time, there are signs that the bleak economy has forced some of the larger, more established VADs to place fewer bets on emerging technologies in favour of fortifying market share with their top vendor franchises.
According to Stuart Reay, who ran distributor Arc before it was acquired by Exclusive Networks in 2009, this has left a vacuum in the distribution sector.
"From the outside looking in, vendors are finding it very tough to find appropriate distributors in the UK," said Reay, who has been out of the industry since he left Exclusive two years ago.
"I have been contacted by seven vendors desperate to know if I am coming back because they have nowhere to go."
Paul Judd, who recently founded security and networking distributor Heatherside, agreed: "Salesmen will always sell whatever they think is easiest to sell. I think there is a gap at the level of introducing shiny new products that need to be evangelised and have a market built for them."
Change of focus
Unsurprisingly, this is not a picture recognised by all established VADs.
Computerlinks director Dave Ellis said the distributor, which now turns over more than £150m in the UK, formed a new technologies unit in 2010 to ensure it could give sufficient focus to emerging, disruptive technologies.
The business unit now has about 15 dedicated staff and carries about nine vendors, including mobility platform vendor Globo, software-defined networking specialist Arista and datacentre management outfit Raritan.
"What Cloud Distribution said pays credence to what we did two to three years ago," he said.
"We want to leverage the footprint we have in the wider business as a lot of these technologies work well with the core vendors, but we felt they needed a dedicated level of push. We may have fallen into the trap of becoming less entrepreneurial if we had not done this."
Ellis said Computerlinks will continue to throw its muscle behind new technologies due to the higher margins and cross-sell opportunities on offer for resellers.
"It would be a dangerous game to refocus on the 80 per cent of business that comes from 20 per cent of your vendors and customer," he said. "From an end-user perspective, if resellers are providing them with a view of the whole market, they will be viewed as a strategic partner.
"There have been a number of distributors that have retrenched and almost gone the other way, which is surprising given there is a lot going on in the market."
Barrie Desmond, group marketing director at Exclusive Networks, accused some of the newer VADs of lacking an identity or sufficient market knowledge.
"There are a lot of people out there stating the obvious," he said. "There are disruptive technologies looking for market acceleration - that is obvious. What is not obvious to a lot of people shooting from the hip is that you have to have the contacts and the know-how and the investment in heavy-duty resources to make that happen if you are to act as a true proxy for those vendors."
Desmond added that the vendors recognised that everything that Exclusive Networks does must tally with its vision around very specific concepts such as the "smarter social enterprise".
"If you look at some of these newer VADs, they are not lighting up the world with strong propositions," he said.
Ian Kilpatrick, chairman of Wick Hill, agreed that the market is already served well by the current crop of VADs.
"The death of new product distribution has been greatly exaggerated - there are a reasonable number of small VADs out there. But there is a strong case that a lot of vendors who come to distribution should not be in distribution in the current state of their development.
"Distribution is cheaper than direct sales but they would be better served first doing some early sales engagement with a couple of resellers and then going to distribution once they can show they have a working business model."
IT channel consultant Bruce Hockin agreed that emerging VADs must pick an area on which to focus.
"They must be known for excellence in a particular area, and be the best in that space," he said.
Technologies of tomorrow
Where the VADs are placing their bets in 2013?
Sales of software-defined networking - where control is decoupled from hardware and given to a new layer of software - are set to mushroom from $360m (£225m) this year to $3.7bn by 2016, according to IDC. This growth potential convinced Juniper to shell out a whopping $176m on newborn SDN outfit Contrail Systems in January, on the heels of VMware's $1.26bn acquisition of Nicira last summer. Dave Ellis, director of new technologies at Computerlinks, said: "SDN appears to offer real benefits for end users in terms of flexibility and business agility. It should be able to reduce management costs and overheads."
Ian Kilpatrick, chairman of Wick Hill, said the imminent arrival of wireless networking standard 802.11ac would be a "game changer" for the channel. Although sales of devices with the specification - to be ratified this year - are not set to reach full swing until 2015, 802.11ac will in theory enable multi-station WLAN throughput of at least 1Gbit per second. "This will lead to a significant shift in businesses moving to a true wireless environment as you will be able to deliver WAN-quality performance over wireless," said Kilpatrick. "Instead of people having wireless in the office, the office will be wireless."
Health and fitness technology
Devices that measure patients' exercise, consumption of tablets or blood pressure will take off in 2013, according to Widget chairman Mark Needham. Widget already works with fitness tracking vendor Fitbit and Needham predicted that health fitness technology would become a category that many retailers will form over the next year. "I have friends who are doctors, and they say one of the biggest problems right now is patient compliance," he said. "It is certainly a channel opportunity on the retail side or for anyone who sells into medical."
Flash array is the buzzphrase currently taking the storage channel by storm as advances in solid-state storage technology enable emerging vendors to challenge the age-old economics of storage. Take Whiptail, a flash array start-up which has just received $31m in funding and claims to have grown revenue fourfold last year.
Channel consultant Bruce Hockin said: "Over the next three years the enterprise market will witness a seismic shift as flash technology matures from a tier 0/1, optimisation play to a bulk storage alternative. Vendors focusing on building all-flash arrays will emerge as serious alternatives to established players in their traditional markets."
The big data market is set to swell by seven times the rate of the overall ICT market over the coming years, according to IDC, and will hit $23.8bn by 2016. But Chris Patton, sales director at VAD CDG, picked out data transparency as a related sector that is set for frenetic growth, pointing to the recent IPO of Splunk as a testament to its potential. "It is about getting insights into your business at a machine level but also from the huge amounts of data the business creates," he said. "It's going to be massive and it should be an area resellers are embracing as there is a lot of opportunity out there."
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