Dent - Technology Distribution Channels: Understanding and Managing Channels to Market

This ebook published in 2014 by

Kogan Page Limited

2nd Floor, 45 Gee Street

London EC1V 3RS

United Kingdom

www.koganpage.com

Julian Dent, 2014

E-ISBN 9780749472184

With love to my wife, Jan, and to our children, Laura and Ian

Contents

By Tim Curran, CEO of The Global Technology Distribution Council

W hen asked to share my views of this must-read for anyone in technology distribution and channels, it immediately made me think of a recent related experience.

I had just finished presenting at the annual Microsoft Partner Summit when one of the executives in the audience (from Microsoft) came up to express his appreciation for what he had learned. He said he had no idea about the breadth and depth of technology distribution all that distributors do today. Before departing he said, You need a new name.

His point was that distribution doesnt connote all that this industry does while driving $130 billion in global IT product and service sales. The reality is a lot of people dont know how deep the value runs today. The term distribution does conjure images of box moving. And theres a reason. Three decades ago that was the role. Distributors emerged because vendors realized they needed many more feet on the street what is commonly now referred to as the channel across the world.

Technology vendors knew 30 years ago that they needed distribution as much as distributors needed them and todays solution providers. These diverse business models come together in extraordinary ways. Distributors, with their historically behind-the-scenes profiles, have emerged as central forces in the global supply chain. The value greatly exceeds the early days of pick, pack and ship.

Knowing how best to tap the resources and vast service offerings of tech distributors, however, involves more than meets the eye. As their industry organization (Global Technology Distribution Council), we know this reality first-hand. And we know this book does too. Its the best insight youll find about how to get distribution right if youre a technology vendor regardless of whether your sales are in the millions or billions. Take the time to read it all. Youll be glad you did.

To maximize partnerships with distributors, you need to think like they do. You need to know what they evaluate and assess with utmost scrutiny. The drivers are dynamic and not always fully understood by vendor partners, whether youre new or experienced in the channel.

Distributors typically bring vendors on board in different ways, of course, particularly because the business models are so diverse. Some are more specialized. Others focus on having the broadest range of solutions possible, across hundreds of product categories. Certain distributors support the design, development and production of solutions, from componentry to finished goods, based on exacting customer standards.

How you work with distributors will not always be the same. This book tells you what you need to know from all perspectives. Youll gain deeper understanding and appreciation for the metrics that make partnerships tick or slip. Avoid the pitfalls that frequently occur when only certain factors are considered, how what may seem like sufficient ROI misses the mark because of multiple other factors, inefficiencies or miscalculations have wiped out any shred of profitability.

Without the right background and understanding, its easy to misread the metrics or not look at them properly. The types of questions you ask, where you focus most time and energy, can be off target. You may still get the results you want, but that may be more luck than strategy and you may be leaving a lot more value behind.

I sincerely believe Technology Distribution Channels will help ensure you get the most out of your technology distribution partnerships. Ive been in the industry as long as the author, and I can tell you that he has delivered the definitive answer. Dont just read it. Keep it handy as a reference to remind you of what will make a difference in the details. Its 30 years of expertise bound for your benefit.

Whats in a name?

Distributors contribute on all fronts: Reseller training, channel- and end-user focused marketing, financial services, pre-sales consulting, custom system configuration, solution deployment, integration services, software licensing, product life cycle management, vendor programme development and much more.

You may have noticed I didnt mention pick, pack and ship. They still do that too, but those are fundamentals getting the right stuff to the right places at the right time. Very important, Im sure youd agree, especially when small, midsize and large enterprises all depend on such timeliness, easily taken for granted. On the other hand, these supply-chain basics are far from what defines the new era of technology distribution.

The power of comprehensive solutions cannot be denied. Distributors are that central source to the channel delivering all this marketplace needs to excel. Were talking about value-added resellers (VARs), solution providers, integrators, independent software vendors (ISVs), direct marketers, cloud specialists, managed service specialists and many other business models under this broad channel umbrella.

When you look at all the different markets and hundreds of thousands of people in this vast ecosystem, you can easily overlook a few keys to success. That includes new opportunities in the cloud, for example, or other sea trends from mobility to big data and everything in between. Technology Distribution Channels puts the odds in your favor wherever you look to do business.

Not exactly Shades of Grey sex appeal

True, distribution may not be the sexiest word in the technology world, but it means value thats worth fully grasping whether you currently sell through distributors or want to explore the possibilities. Get to know what technology distributors are really all about. Delve into the details here. Explore related certification and accreditation training. Apply the principles and practices in your partnerships daily.

As youre reading this book or engaging distributors, and you happen to think of a more exciting name that better captures all that they do, Id be happy to hear from you. After all, the name has been the same for decades, yet the value has continuously increased year after year!

Tim Curran
CEO, Global Technology Distribution Council

T his edition of Technology Distribution Channels has been written especially for those readers who work in this incredibly fast-changing sector, or those who wish to learn from the way the technology sector moves products and services to market. Although the technologies involved in the information, communications and technology sectors evolve at an extraordinary pace, the core business principles of getting them to market remain remarkably consistent. Customer demand needs to be stimulated and serviced, supply chains need to be responsive and efficient, and margins need to cover the costs of doing business.

What makes these sectors unique and worthy of a special edition? Several factors come to mind immediately:

• The very short life cycles of the products (sometimes just a few months), which put the onus on distribution channels to flush out older products and gear up to create and meet demand for the new ones extremely efficiently.