Distribution 2016 Predictions from the Experts: Part Two

The Player: Gavin Miller, VP of Marketing, Avnet

Anyone who’s looking to predict where distribution is headed will have an advantage if they understand where it’s been. As science historian James Burke said, “Why should we look to the past in order to prepare for the future? Because there is nowhere else to look.”

If anyone can speak to evolution in distribution within technology, it’s Avnet (AVT). Started 95 years ago in the radio components business, the distribution giant has adjusted to the advent of television, personal computers and the Internet. Gavin Miller, vice president of Marketing at Avnet, says the company has learned how to react to disruptive innovations and understand the motivations behind customers’ business decisions. That’s what the company is doing now to try to predict where the distribution market is headed.

When it comes to 2016 trends, Miller says the whole channel needs to take note of how quickly the marketplace is adopting to what he calls a “third platform,” a term coined by IDC to distinguish the current IT environment of cloud computing, mobile technologies, social media and big data from earlier eras. “I think what is becoming more clear over the last 12-18 months is that [change is] accelerating faster than probably any of us or the analysts thought it was,” he said.

His point is that unlike the past, when technology developed slowly enough for providers to incorporate new offerings and become one-stop shops for customers, new technology is being adopted at rates that are outpacing the channel’s ability to keep up. Partners that sell cloud computing, mobile, big data analytics and the Internet of Things (IoT) have too much to learn at once to be effective generalists. Channel companies are starting to see that they need to specialize in order to succeed.

That’s generating some realignment within the channel as companies form partner-to-partner alliances to provide the fullest solution possible to their customers. And distribution is just beginning to see the benefit in helping to facilitate those alliances.

“I’d say they’re on a very strategic basis versus a broad, programmatic basis at this point,” says Miller. “It’s still very much about the relationship and trust, so you’ve got to be very selective about that process.”

As specializations emerge, distributors will need to find different routes to market, Miller predicts. The “emerging channel” is made up of independent software vendors, system integrators, shared service providers and other non-traditional routes to market that Miller says are critical to meeting supplier demands for new revenue.

“It’s all about customer acquisition. If we’re not providing growth for our suppliers, then we’re becoming irrelevant to those suppliers. And that’s the worst thing you can be in this day and age,” he said. Distributors have always had a customer acquisition inroad to suppliers because they’re what enable new, hot technologies to scale. That opportunity is only growing in the software-defined solutions marketplace, and Miller says line card expansion is a big focus for 2016. 

“The people that are going to win in the market are those that can be agile,” Miller predicts. “As the channel, collectively, we need to be as agile or more agile than customers.” The upside to new, fast-moving technology is that it also enables businesses to pivot to meet growing needs. Miller advises channel partners to study the analytics and closely watch trend lines to find where you can provide unique, specialized value.