Supply chain snags and the talent gap, what challenges are distributors facing?

Ten UK distribution leaders reveal what struggles their businesses are currently grappling with

Supply chain snags and the talent gap, what challenges are distributors facing?

After an unprecedented past few years of fresh challenges entering the scene with the Covid pandemic, inflation, and war in Ukraine, channel distributors are still trying to overcome these obstacles.

Vendors and resellers alike say the war on talent rages on while supply chain pressures seem to be easing, but what challenges are some of the UK's top disties currently dealing with?

CRN finds out below…

This is the third article in a series of features exploring distribution in the channel. Read the first article on top vendor frustrations here and the second on the rise of value-added distribution here.

David Watts, managing director, TD SYNNEX UK&I

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"The economy is probably the vast majority of anybody's answer. The endpoint market, mostly mobile phones, PC products, and tablets continues to be massively down and that's only a proportion of our business.

"If you mostly do that in distribution, you've probably had quite a hard time. The market's been sort of 15 per cent to 20 per cent down through the channel, according to CONTEXT data.

"If we look at the infrastructure cloud security software market, that's been nicely up.

"But by the end of Q2 it was pretty much getting into flat year-on-year territory with that endpoint market not recovering. That's what we saw by the end of Q2, which is tough and certainly is tougher than a lot of people predicted.

"I think we thought the end of last year was going to be difficult, and by this point we'd be in a nice recovery in the channel but certainly sales continues to be down year-on-year. And that infrastructure cloud security software market is not supporting in the way that it was."

Read on to find out what the likes of Westcoast, Exertis, Ingram Micro and QBS Software are battling with...

Supply chain snags and the talent gap, what challenges are distributors facing?

Ten UK distribution leaders reveal what struggles their businesses are currently grappling with

Matthew Sanderson, SVP UK & Ireland, Ingram Micro

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"Understanding the market as it rapidly evolves and, in tandem, developing solutions and services that partners can utilise and gain value from.

"The expectation in the channel is also shifting. As we all come to expect the same great experience we receive in the B2C world, our approach to customer experience is evolving.

"Becoming platform orientated and working from a model of constant improvement is how Ingram Micro is centring."

Next up: 'Challenges create opportunities. You have to think differently. You can't just do what you always did...'

Supply chain snags and the talent gap, what challenges are distributors facing?

Ten UK distribution leaders reveal what struggles their businesses are currently grappling with

Alex Tatham, executive director, Westcoast

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"We've come off a pandemic period where most people did very well because the world needed technology. It needed it fast, it needed it quickly and in volume.

"As a result, there will have been a lot of upgrades to a lot of systems.

"I'd say the PC market is going to struggle this year. I think that's well documented already. And I'm certain that's because everyone has invested in new PCs and of course, the cost of living crisis isn't going to help either. Particularly for consumer products there's a challenge right now.

"But there are always bright spots in all of these things. Whether it's unified comms, whether it's networking, in particular, has had a good last six months and will no doubt have a really good second six months.

"There are challenges and opportunities, but with every challenge, there are more that create opportunities because it means you have to think differently. You can't just do what you always did because you won't get what you always got, you're going to get less of it.

"What's important is that you've got to be able to use your sales muscle to make sure you are diversifying your business and of course, creating new opportunities and new sectors for your business.

"Distribution has always done that. One of the joys of distribution is that it's so darn efficient that it creates what I describe as gravity.

"Yeah, that sucks in other channels because actually distribution could do it probably more efficiently than those other channels.

"Whether it's voice or mobile phones, you can see there is a sort of attraction towards distributions and large IT distributors, largely because of the vast money involved."

Keep reading for Westcon-Comstor, Infinigate UK, Pax8 and more...

Supply chain snags and the talent gap, what challenges are distributors facing?

Ten UK distribution leaders reveal what struggles their businesses are currently grappling with

Tim Griffin, CEO, Exertis UK

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"I wouldn't necessarily differentiate ourselves from any other distributor. I think in many respects, certainly in Q2 many of the challenges will be consistent for the industry as a whole and probably for a longer time frame.

"The economic cycle is causing some challenges in terms of absolute demand. If you look at the market you'll see it's certainly got some hard compares in terms of its year over years.

"That economic cycle is clearly one, and how that plays out for inflation and the cost of capital is another.

"We've generally seen the supply chain improve significantly since Covid, but it's not perfect yet and so remains a challenge.

"And then there's talent, and it becomes a little circular here in terms of the nature of the evolution of distribution and the increasing nature and diversity of services that we offer means that you're going to need specialists in those spaces."

On page 4: 'It comes with a heavy investment that I think not all organisations can make...'

Supply chain snags and the talent gap, what challenges are distributors facing?

Ten UK distribution leaders reveal what struggles their businesses are currently grappling with

Rakesh Parbhoo, global CTO & SVP MEA, Westcon-Comstor

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"I think supply chain is still up there as a significant challenge when it comes to physical goods. People always require physical goods even if the majority is moving to software.

"It's getting better but it certainly has not returned to pre-pandemic levels. It's still a significant challenge for both distributors and ultimately customers to give their products the ability to to quickly scale up the new systems and the new tools that are required in this new world is a big challenge.

"It comes with a heavy investment that I think not all organisations can make and it involves a set of expertise that are not always easy to find who really understand the channel and where the opportunities are for automations integrations."

Supply chain snags and the talent gap, what challenges are distributors facing?

Ten UK distribution leaders reveal what struggles their businesses are currently grappling with

Justin Griffiths, MD, Infinigate UK

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"I think the biggest challenge for the last 12-18 months has been supply chain problems but I do believe they are slowly healing themselves and that's becoming less of a problem.

"But of course, that can always come and go.

"But I think a lot of people are facing a fork in the road conversation which is the area of direction that you want to place your bets in.

"Often you can place big bets in areas where they just may not come into fruition.

"I would say if you're a distributor today, you clearly have to make sure you have software and SASE front of mind.

"And a platform and technology to be able to support the way that digitisation is happening with how customers want to interact with you, both human and through a platform I think is very important."

Still to come: Distology, Pax8 and Arrow and QBS Software...

Supply chain snags and the talent gap, what challenges are distributors facing?

Ten UK distribution leaders reveal what struggles their businesses are currently grappling with

Dave Stevinson, CEO, QBS Software

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"Different distributors are facing different challenges is the most important thing to say.

"But with new competition coming on board as new entrants into the market, there's going to be a rise in micro distributors nibbling away.

"There's global disruption with things like inflation and the war in Ukraine which is a challenge for any business and distribution is not immune to that.

"There's having a really compelling, sustainable message. I think too many distributors haven't given enough attention to this, and I believe that will become more and more important as more and more large enterprises push the complete supply chain to have a credible, sustainable narrative."

Supply chain snags and the talent gap, what challenges are distributors facing?

Ten UK distribution leaders reveal what struggles their businesses are currently grappling with

Pax8

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Debby Clement, VP of talent

"Talent is one. I think it's adaptation because it feels like some people are a lot slower to adapt and they're holding on to old hierarchies."

Aaron Watts, VP of Sales

"Objectively, if you think about Pax8, it has been in the UK and EMEA for two and a half years. We've not been as established as many of the providers in the UK in Europe, and yet what we see and what we hear both from our own reports and that from from third parties is that we are making a real name for ourselves and shipped in pretty significant market share our way.

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Aaron Watts, VP of Sales EMEA

"I think that does speak to how a lot of these other distributors are able to adapt to be focused on that kind of digital first cloud-first approach and the very different way in which digital services distributes to the engagement with partners.

"The other thing I would speak to which links to adaptability is just the sheer explosion of technology vendors.

"Tens of thousands, if not hundreds of thousands of ISPs, all of whom we've got something to bring to the market, our role, as is the role of every other kind of distributor/marketplace to identify those that have a viable product.

"Those that have a viable go-to-market and make a rationalisation and determination on which of those that we are going to be supporting, whilst also then being able to support our teams, internal teams, and our partners with the knowledge to be able to add value around these hundreds of different ISPs."

Supply chain snags and the talent gap, what challenges are distributors facing?

Ten UK distribution leaders reveal what struggles their businesses are currently grappling with

Lance Williams, chief product officer, Distology

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"The biggest challenge in the past quarter has been direct business between vendors and resellers and in fact, in some instances, vendors and customers, and that is damaging, as we all know.

"The other is we have felt the presence of the AWS marketplace, and that's in business that shouldn't be available to the marketplace.

"So renewals, and renewals are important parts of any business whether vendor, reseller or distributor, we all know reap.

"Renewables are there and refund renewals are far easier to convert the new businesses."

Supply chain snags and the talent gap, what challenges are distributors facing?

Ten UK distribution leaders reveal what struggles their businesses are currently grappling with

Nick Bannister, VP sales of enterprise computing solutions business for UK&I and ANZ, Arrow

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"No one is immune to the current global economic conditions.

"Last year we introduced Arrow Smart Terms to help our channel partners to protect and help manage their working capital.

"We also offer a range of value-added services that help to drive innovation and growth.

"This can take the form of support such as training, or go-to-market strategies, or access to highly sought-after expertise and rare skillsets."