A recent survey-based report by the Global Technology Distribution Council (GTDC) reveals that distributors are optimistic about the year ahead, and are forging inroads into new technology markets via updated services and solutions.
“Distributors are moving toward a 'platform'-based approach in the coming year, leveraging new integration capabilities to provide larger solutions. Whether it’s security, cloud, hyper-convergence or other platform-based technology, vendors want their products and services to be easier to use and integrate with other products and provide a seamless solution for end users.”
That’s according to Tim Curran, GTDC CEO. The organization’s 2018 Tech Distribution Outlook report was independently produced for the GTDC, includes detailed perspectives from distribution leaders and vendor IT channel executives as well as aggregated survey responses from more than 50 top technology companies worldwide.
Tim states in his report intro that “Cloud has become entwined into almost every other facet of technology, and so has security, data center, etc. Indeed, the notion of siloed technology is now a memory — and vendors will count more on distributors to ensure that their products are bundled into new platform-based solutions.”
The report groups major themes for 2018 under various headings:
A perpetual theme in the tech distribution channel, where would any industry report be without a mention of cloud. According to Reyna Thompson, Vice President, CONVERGESolv Secure Networking Group, SYNNEX, adoption will continue to grow exponentially as skepticism and fear of managing cloud and hybrid infrastructures evaporates. The report states that cloud has become connecting tissue for IT, with more integration between historically separate solutions thanks to advances in public, private and hybrid cloud solutions.
Datacenter / Hyper-Convergence
Hyper-convergence is still a big opportunity for the channel, with more vendors — and solution providers — developing new use cases and solutions to accelerate adoption in the marketplace. Julie Hens, Vice President of Global Distribution Sales for Cisco Systems states that it’s the fastest growing segment in data center IT, with customers wanting solutions that tie together computing power, storage and networks that are simple to manage and operate.
Jim Wittry, General Manager of Channels/Alliances for CloudGenera agrees, mentioning in the report that “hyper-convergence will be a key growth area for the foreseeable future, for a good five or six years.”
The GTDC report states that the Internet of Things is the next big wave, requiring distributors to act as super integrators across IT, telecom and consumer electronics, and that the End-user demand for access to information anywhere, anytime is fueling growth in cloud, networking, security, IoT and more.
In addition, Jacqueline Woods, Chief Marketing Officer of Global Business Partners for IBM thinks that "distributors will be bringing together many types of companies that interconnect with each other and that are not naturally or traditionally well-connected from a technology perspective."
Today’s mobile needs incorporate almost every other technology category, including security, cloud, IoT and more. Vendors and distributors expect that to continue in 2018, as more enterprises embrace mobile solutions.
Professional Audio / Video
According to the report, demand is accelerating as a result of the growth in digital signage, physical surveillance and HD video into commercial markets.
Possibly the hottest buzzword within the tech industry at the moment, cyber-security has grown into a massive, rapidly changing sub-industry which continues to have serious implications on corporations and individuals around the globe. A recent GTDC survey reveals that 75% of distributors cite security as the most active category for new vendor partnerships, evidence that new solutions continue to proliferate the market and that the vendors recognize distribution is an effective route to market to reach SMBs.
With video surveillance and intelligent transportation systems being two especially crucial areas for security right now, Erick Foy, Director of AMS Distribution Channel Sales for Symantec, mentioned that "distribution is stepping up as a major force in the channel to help drive an integrated security platform value proposition", while Julie Hens at Cisco believes that "threat intelligence, machine learning and automated responses on the network are critical."
More than 70% of vendors expect their revenue through distribution to increase by a double-digit percentage in 2018, up from 55% the year before - indicative of accelerated adoption of digital technologies. Tim Curran, GTDC CEO mentions that "Vendors and solution providers don’t have the reach, scale or capabilities to serve the SMB and SME markets on their own, and distribution has long proven to be the most efficient route to market.”
One of the things which GTDC’s survey revealed is that many distributors now have groups or business units for specific industries, and the investments will continue into 2018 as those industries look to invest in newer digital technologies.
Paolo Castellacci, President of Computer Gross Italia believes that vendors like distributors being more solution-centric, especially with partners working with innovative technologies such as big data and analytics, IoT and cloud.
And Michael Urban, Corporate Vice President of Strategy, Transformation and Global Vendor Management for Tech Data adds that "The most successful distributors are becoming vertically-oriented.” Indeed, the GTDC report mentions that digital technologies continue to transform the way business is conducted and IT is sold, with increased emphasis on multi-vendor solutions that solve specific industry challenges.
Vendors say there’s plenty of new business to target in 2018, but that new solutions, services and ways of thinking will be required.It’s safe to say then that while IT vendors anticipate doing more business with distributors in 2018, they also have higher expectations of what they want distributors to deliver.
As the report states, from cloud to vertical markets, vendors say there’s plenty of new business to target in 2018, but that new solutions, services and ways of thinking will be required to capitalize on the opportunity. It’s up to distributors to strategize, implement and manage the necessary changes required in order to thrive.
* Download the full Global Technology Distribution Council (GTDC) report titled 2018 Tech Distribution Outlook: Where the Industry is Headed from the Perspective of Channel Leaders Worldwide.