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 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.
