Distributors Achieving Value-Added Positions with DX?

wholesale distribution

In the fast-moving ICT market distributors are not immune from the pressures of aligning their business to meet the challenges posed by Digital Transformation. In this report we look at how they are reacting to these and other market forces.

In the last ten years distributors have had to cope with one of their biggest challenges – in a world of shrinking CPE based sales how do they transition to the new cloud deployment model that is now dominating user narratives?
At the same time– market changes rarely happen in series but in a continuing set of parallel trends and developments – boardrooms today are progressively addressing the need to implement Digital Transformations (DX) in order to compete and remain relevant.

Do distributors have the skill sets themselves to help channel partners put solutions together for users?

Andy Dow, Group Marketing Director for Tech Data UK&I, “I think we are in a truly unique position to enable and support our partners in all the key areas that are needed for digital transformation – software-defined and hybrid technologies in the data centre, cloud-based services, our growing security practice, and on emerging technologies, such as IoT and analytics as well. We have tremendous technical and professional services resource in all these areas.”

Wayne_Mason_Westcon_ EMEA_Head_of_Vendor_Management

Wayne Mason, EMEA Head of Vendor Management at Westcon-Comstor, asserts that if you don’t possess rich and varied skills to support partners then value is not a lot more than a good price and being able to deliver.
“At Westcon-Comstor we view ourselves as a solutions enabler and an equal partner in the tripartite arrangement of partner, distributor and vendor. Layered onto a base value of product, credit and logistics services are skills and services that add real value to partners and projects. Tackling complex requirements involving UCC, networking, datacentre and security, is a team job. It involves people not only highly skilled and experienced in multiple vendors’ technologies, but in other value-add areas like project management, finance, professional services, staging and provisioning, support, maintenance and renewals. All geared towards ensuring partners can go deeper and wider in accounts, earn decent margins and get an ongoing income stream by delivering best value solutions and service throughout a project’s life-cycle.

As an example, the Westcon team of pre-sales consultants and service engineers number more than 300, holding in excess of 2,000 technical certifications. Such pooled knowledge and experience means partners can be helped with scenarios ranging from say, incorporating hosted voice over mobile, to high-level scoping of UC, security and networking in SDN or SD-WAN opportunities. Partners needn’t restrict themselves, they can take confidence knowing we have their back in pretty much any situation and can call in additional expertise from vendors if needed.”
Julien Parven, Marketing Director at Daisy Distribution says this largely depends upon the formation of the distributor.
“If they are specialist to the point of being one dimensional, then probably not. But through adoption of the broader skillsets and recognition of the background of its partners a successful distributor should be capable of adaption and evolution.

At Daisy there is a range of ways partners can engage and create solutions for partners – some are self-sufficient and already leading the digital transformation journey, so for these it is about support and empowerment, making things simple to sell, quick to deploy and swift to bill. However, there are others that need developing and therefore we have developed our Partner Academy to satisfy this. And for those without the capability or resource to compete, Daisy’s team of specialists can sell on the partners’ behalf. It is about understanding the needs of your partner base and using what resources you have to support them.”

Darren Garland, Managing Director of ProVu believes that to be a successful Value-Added Distributor you must have the technical capabilities to manipulate your product set to produce a range of solutions.

“At ProVu we have a technically strong team who work hard to ensure every product we sell is tried and tested before being launched, this gives us a great knowledge of our products. Our Pre-Sales team frequently assist our Channel Partners to help them put the ideal solutions together for their customers. But it doesn’t stop there – they are then able to support our Channel Partners with remote installation and Post-Sales Support.

Nowadays, Channel Partners won’t be aware of all of the options that are open to them because of the huge variety of choices that are out there. It is essential that Distributors have this trusted advisor status to be able to support and advise their Channel Partners in every way they can.
Without this, distributors run the risk of losing custom and also falling behind in understanding what additional products they should be looking to distribute next.”

“Distributors definitely have the skills sets to help put solutions together”. says Paul Burn at Nimans.
“Skills sets is a very broad subject but we have the expertise and supplier relationships in place to ensure no challenge is too big or too small.”
Steve Harris, EVP of Nuvias UC, “The answer is the same for distributors and channel partners alike in that some have invested in this area, and have seen the market shift, and others have business models deeply entrenched into legacy hardware and logistics. There is still a requirement for both today but the innovative and high growth companies that are investing today will have strong recurring revenue businesses and be better positioned when the market shift continues its evolution. Distributors are very pragmatic today, are more frequently working with specialist third parties and ultimately emphasising on being solution led with multiple vendors. This trend will continue as user expectations become more sophisticated and demanding.”

How are distributor portfolios changing to reflect current market trends?

According to Wayne Mason at Westcon-Comstor, as technologies emerge, vendor portfolios, services and support for partners evolves.
“For instance, ‘as a service’ and cloud is more mainstream, convergence of some sort is always with us, remote zero touch provisioning, estate management and device control is a reality. Whatever the scenario, we invest and develop tools and applications to help partners ride the waves.

But it’s not just restricted to supporting opportunities. Programmes like our Accelerate VIP initiative help partners committed to entering new markets create demand and opportunities, and gives cutting-edge new vendors a platform for growth by being positioned as a complementary solution element to vendors like Avaya, Microsoft and Polycom. And when ready, partners raise their customer value by upskilling their teams. The Westcon Academy sees thousands of students a year acquire valuable technical skills and the ability to add their own value.”

Darren Garland at ProVu says that for some time now they have seen a shift in working habits with a rise of flexible, remote working.
“This has seen us broaden our product offering and add items such as softphone and software licenses along with headsets to our portfolio. The real change for us lies with the ongoing development of our services and systems. We are seeing more and more companies integrating their systems with ours and consequently an increase in the demand for bespoke API features.

Nevertheless, the more traditional products such as deskphones still remain the core of our business.”
Steve Harris at Nuvias UC believes that successful distributors are very analytical with managing their portfolios and monitor trends very closely as even small movements can affect commercial performance at large scale.

“Plus, there is a lot of M&A activity in the vendor space that can affect portfolios significantly over a very short timeframe. Because of this, there is an increased focus on new technologies, areas that will eventually replace existing revenue streams and there are often initiatives within distributors to seek out and on-board these new players early on in their growth cycle with a view on scale in the medium and long term. A further change is the amplified attention on ecosystems and alignment where there are large vendor players who dominate a sector, as well as a number of smaller players who fill gaps and enhance their offering. A good example of this is Microsoft with Skype for Business and Teams.”

What role is mobile solutions playing in Unified Communications?

Julien Parven at Daisy Distribution says, ‘Mobile is critical to this UC evolution’.
“Having control over a customer’s estate affords the right to open up other conversations that lead to a unified communications solution.
Think about it – the mobile business gives the ability to talk about the fixed lines and calls, they naturally interact and tools exist to be able to marry the services, allowing you to offer things like our Daisy Duo solutions which offers free calls back and forth within a customer’s estate. The fixed line business then opens up the conversation about connectivity (voice and data traffic) and Wi-Fi. Now that the customer has the basis of a unified communications solution, they need a platform.

Do they go on premise or cloud-based? For the majority of organisations today, is there really a question of which? If a system is in place it needs to be maintained, however if it’s a cloud solution then the natural extension is to start to talk about the desktop and mobilising that into the cloud. All of which brings the conversation to the hardware the desktop solutions need to operate, and therefore a supply chain services opportunity – and so the opportunities continue to unravel. From an opening conversation about mobile services, an entire UC solution has been deployed.”
Darren Garland at ProVu believes that mobile solutions are definitely being more widely adopted in the UC world.
“The use of softphones and the ability to blend mobile and fixed communications together to produce a seamless user experience has definitely advanced in more recent years.

At ProVu we do not see mobile being the death of the traditional desk phone but rather another tool to offer a connectivity option to the end user.”
Andy Dow at Tech Data UK&I, believes that mobile technologies will continue to be at the heart of digital transformation and the way people collaborate, interact and work.

“We are moving to a higher plane on interaction now and it’s mobile technology that’s enabling that change.”
Paul Burn at Nimans is certain that mobile is one of the main driving forces in UC and the arrival of 5G will be a game changer further down the line.
“The type of speeds and bandwidth being talked about could potentially see businesses replace fixed data networks. eSIMS will gain much more traction etc. It’s probably 2020 before things really start to happen but realistically we all have to start planning for now. The impact will be huge.”

According to Steve Harris at Nuvias UC, Unified Communications is evolving rapidly and the need for users to have a truly mobile experience is growing and is now demanded by most enterprises and small businesses.
“Previous focus was around delivering advanced features to the desktop and then introducing dial plans to then re-route calls to a mobile phone for basic voice features, but this isn’t enough today. Users want their mobile devices which will include laptops, tablets and mobile phones to all form part of an integrated solution and to have the same advanced experience as the desktop. Another key growth area is that users want a full collaboration experience, even when mobile, and not to be required in a meeting room or at their desk to share files or communicate via video. Mobile data speeds and advances in phone and tablet hardware make this possible today and users now see mobile collaboration as a key component of their unified communications experience.”

Paul Burn, Head of Category Sales, Nimans

Paul Burn, Head of Category
Sales, Nimans

How do distributors position themselves to retain their partners and gain new ones?

Wayne Mason at Westcon-Comstor, reminds us, ‘You know the old adage of you’re only as good as your last sale’.
“In a service driven world, it’s never truer. You have to constantly innovate and be forever relevant to your partners. That’s why at Westcon we innovate to enable, by delivering value-add services and applications that wrap around core hardware propositions, and deliver choice to partners. A good example is in the world of IP phone provisioning and device management. We can provide at our logistics and service centre or through our ForgeServe service. From one desk a partner can perform zero touch provisioning, estate management and real-time device change control for their customers. By making their customers’ budgets go further they remain very relevant to their customer, and through enabling increased capabilities and margins we remain very relevant to our partners.”

Julien Parven

In the same vein of back to basics, Julien Parven, at Daisy Distribution, says ‘Regardless of the distributor, the game-changer has always been, and still remains to be, about adding value’.
“From training to marketing; a skilled distribution sales team supported by product and solution specialists; assisted sales or selling on behalf of the partner; distributors are having to evolve and innovate to ensure that the reason for a partner to join remains strong at all times. Using your scale and experience to guide them through pivotal industry change such as digital transformation is invaluable.”
Keeping it simple is the recommendation of Paul Burn at Nimans.

“Retaining partners is all about not over complicating things and making sure we deliver what we say we will and when. Technology evolves and so does Nimans. The market is not the same as it was in the early eighties when we were formed but we’ve proved we can innovate and will continue to do so. If we didn’t we wouldn’t be here now. Back then the market of 2017 would have looked very scary but we’re here now and it isn’t. The future is the same.”

“It’s important to be relevant to all channel partners and a comprehensive product and services portfolio is an obvious starting point,” concludes Steve Harris at Nuvias UC.

“The more products and services that can be fulfilled from a trusted existing distributor means channel partners are less likely to go looking for another supplier. At the same time, it is often overlooked that the distributor still needs to be highly skilled and specialised at the same time otherwise a simple broad line approach will not deliver the value the channel partner needs, and therefore will not retain the partner despite having a comprehensive portfolio. Furthermore, being simple to do business with, both in terms of business ethics and behaviour plus automated systems for transactions, is also underestimated and this is an area that applies to both retention of partners and on-boarding new partners too.

 

Ed Says…

Steve Harris made a further point that there is a significant amount of change within the distribution space and that the retention of channel partners is a key theme and initiative for all distributors. It was significant, I believe, that in all the feedback received from a wide range of distributors that there was very little, if any, mention of price or price erosion in the market. Perhaps the investments distributors are having to make in the DX market are too significant to lose and that value add is really happening.

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David Dungay

Editor - Comms Business Magazine