Security Market Shows Why Distributors Must Do More than Logistics — or Risk Irrelevance
We think of distributors, like my company, as the bridge between technology vendors and the VARs, SIs, MSPs, consultants and other partner types out there selling to end customers. Our value prop has been delivering financial and logistical services that help streamline sales operations to ensure customers’ needs are met.
Pick and ship is still important. But I’d argue that in today’s fast-paced world, where software is king and more and more solutions are delivered as subscriptions, partners need to ask: Are financing and logistics still the biggest problems that distributors can solve for my company? The short answer is usually “no.” For distributors to thrive in the new channel, we’re going to have to do more. Think vet startups and new tech, helping to tackle the talent shortage and more.
Fortunately, the vantage point of a distributor, as the bridge between vendors and resellers, gives us a unique perspective on the market. We can see both the big picture and dig into the details, which means we have much more to bring to the supply chain than operational efficiencies.
To illustrate what I mean, let’s look at the security market, which is big and getting bigger.
Attacks continue to increase in number and sophistication — 2017 was another banner year for damaging cyberattacks worldwide. In the first half of 2017, 1.9 billion data records were lost or stolen, says one report. Companies know they need to invest to protect their data, making security a nearly $138 billion market in 2017, according to analysts. Spending is on track to reach almost $232 billion by 2022, with an 11 percent compound annual growth rate (CAGR). Venture capitalists have noticed, and there is a constant barrage of new cybersecurity companies and products. They join literally hundreds of existing suppliers operating in dozens of different security categories; Gartner breaks the market into five segments, each of which contains multiple subsegments.
It’s incredibly complex and high-stakes. It’s also easy to see why customers, who are focused on their businesses, find it difficult to digest all the information coming from all the different companies on all the different cybersecurity issues they need to worry about. And make no mistake, suppliers – especially SaaS suppliers – are reaching out directly to your customers.
Then there’s the well-documented shortage of expertise out there, for both customers and partners. Unfilled cybersecurity positions are predicted to reach 3.5 million by 2021.
Customers will turn to their trusted advisers to help them make sense of it all. But here’s the thing: If you are also overwhelmed by these market conditions, customers will start to wonder why they need you.
This is where distributors and master agents must step up and help. Otherwise, we can’t blame you, the partner, for asking why you need us and the two-tier model overall.
Make sure the distributors you work with are actively cutting through the clutter to identify emerging opportunities and then providing the technologies, tools and services you need to capture that business. Specifically, evaluate distributors on three key capabilities that facilitate a simplified sales cycle.
Education to Lay the Foundation
Sure, a distributor can provide education materials that help partners and end customers understand what the real security issues are and the different ways in which they can be solved. This is table stakes given their vantage point. Look also for an ability to evaluate the viability of up-and-coming companies — to play the role of a lookout for the market, giving partners the heads-up on what startups they should be paying attention to and how new technologies can help their customers address their cybersecurity needs.
Distributors can spot early indicators of trends. They can make you aware of the proven and emerging cybersecurity technologies you need in their portfolios to meet customer demands, today and in the future.
Through training, certifications and general education courses, distributors can help partners address the skills shortage by building their competency and proficiency; ultimately, this will help technology vendors generate awareness and acceptance for their latest offerings, while accelerating the adoption of advanced capabilities that will strengthen all of our security stances.
Engagement to Accelerate Adoption
A distributor can provide the real-world, first-hand experiences partners and customers need to understand how new technologies really work. Make sure your distis offer labs, test drives and virtual sandbox services that can win customers over at various points in the sales process. A distributor can create one environment that can be used by hundreds of partners to prove concepts, test configurations and demonstrate capabilities. Don’t reinvent the demo wheel.
First-hand experiences offer a frictionless way for customers to see what a new technology can really do and envision how it can be used to solve their problems. They can also work to vet new technologies, which is difficult and expensive for individual partners.
Enablement to Ensure Success
Given the shortage of cybersecurity (and other) talent facing most organizations, it’s not uncommon for sales to be stalled simply because the partner or customer doesn’t have the staff to get a service up and running. Distributors need to offer enablement that not only ensures a smooth, seamless sale, but also smooth, effective ongoing deployments. I’m talking going beyond sales logistics to include presales and post-sales services that support the appropriate identification and scoping of an opportunity, as well as design, implementation and configuration.
Look for a distributor with enough scale to ensure customers are up and running with a clean, best-practice deployment, freeing you to focus your resources on developing differentiated services and intellectual property that generate new recurring revenue streams. Sometimes that means holding a vendor to account. Make sure your disti is willing to go to bat.
The goal of the distribution tier has always been to remove barriers to the sales process, so vendors and resellers can both focus on what they do best. While this objective hasn’t changed, the capabilities a distributor needs to fulfill this mission are evolving and expanding.
What do you as a partner need from your distributors but aren’t getting? Tell me in comments.
Pradeep Aswani is the CEO and founder of Cloud Harmonics Inc., the pioneer of holistic distribution, which provides the Education, Engagement and Enablement capabilities that technology and channel partners need to accelerate the adoption, ramp and sales of next-generation cybersecurity, software-defined networking and cloud technologies.