The path of IT distribution has followed some twists and turns in recent years and the well-understood two-tier system is continuing to evolve. This is driven in part by the fact that Web 2.0 technologies now in the cloud have less complex sales cycles and more easy-to-install offerings.
When it comes to their go-to-market strategies, IT vendors have a choice: channel, direct or a hybrid model. As technologies have become less complex, and therefore easier to sell, there is a line of thought that says let's go direct and keep all the profits ourselves.
Alternatively, we are seeing an increasing number of vendors that wish to hedge their bets and keep a foot in both camps. They have their own direct approach as well as partnering with a distributor. This way, they've covered all their bases, right?
I can see the logic of the hedge-your-bets approach. And for vendors that have had a less than positive channel experience I can understand the appeal. Tales of big brands dominating mind share with marketing muscle and deep pockets are not uncommon.
However, there is a lot to be said for choosing one option - the channel model - and sticking with it.
There's a well-known phrase: "There are only two options regarding commitment; you're either in or you're out. There's no such thing as life in between." And I think that rings true here. Why?
Like most things in life, the more you put in, the more you will probably get out. From the distributor's point of view, my preference of course is for my vendors to opt solely for the channel route.
After all, why should I invest my team's resources, time and effort promoting a vendor, if they are going the direct route too - effectively cannibalising, and in some cases under-cutting, my efforts?
That said, I recognise that for vendors to commit 100 per cent to the channel, distributors and resellers need to bring something extra to the table, something that a vendor cannot do without the channel's help.
This is especially pertinent for lesser known but innovative technology providers that are trying to enter the UK market but struggle to be heard above the hype pushed out by "competitive" brands.
This is where real value-add distribution comes into play, and lots of column inches have been dedicated to the topic. Is the term just another marketing catchphrase? Does it actually mean anything at all? I would say yes, VAD does stand for something.
It stands for the level of service that will ultimately persuade vendors to opt for the channel model. But not all distributors are equal so you want to be sure you are doing business with a real value-adding partner.
How close-knit is the distributor's ecosystem? Are there proven, positive and productive relationships between the distributor and its resellers and end users?
Look for evidence, including the presence of strong account managers with a solid track record in closing business and for regular networking forums that bring together the distributor's community to share experiences and strengthen relationships.
How extensive is the partner base? Your business is unique. You need to be sure that your chosen channel partner has sufficient breadth and depth of choice to meet specific needs.
This includes looking at your vertical expertise or technology offering - do you need someone who understands security, for example? Make sure that your chosen distributor can match you to business partners that understand your requirements, and can address them.
Are there any services on offer to help sales? Companies are generally more successful if they are supported throughout the sales process. Perhaps there is a tailored vendor support launch pack, pre-sales and technical training, a virtual marketing team or an end-user demand generation platform. If there are no additional services, look elsewhere.
I am passionate about maintaining the value in distribution and I firmly believe that vendors will be more successful if they are supported and rewarded through strong channel partnerships and enabled with the right tools.
But make a decision and stick with it. Take the direct route or go through the channel - but don't hedge your bets. That's a a diluted approach that doesn't work. If that is your chosen strategy, at best your business will not realise its full ambitions, and at worst it will fail completely.
The choice is yours.
Adam Davison is director of Cloud Distribution
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