CompTIA: Distributors Still Relevant in Cloud Age
While cloud computing has allowed for the increased ease-of-access to software for both professional users and consumers alike, it has also had an unforeseen consequence for traditional distributors—the ability for suppliers to eliminate VARs from the channel entirely by sending products directly to the customer.
Cloud computing has allowed for easier access to software and services for users, but it also has had an unforeseen consequence for traditional distributors: the ability for suppliers to eliminate VARs from the channel entirely by sending products directly to the customer.
“Unlike traditional IT products with clearly defined architectures and feature sets, cloud computing technology is by design more virtual and decentralized in nature,” said Carolyn April, director, industry analysis, CompTIA, author of the white paper, “The Role of IT Distribution in a Cloud World.” “From a distributor’s point of view, this makes the technology more difficult to move through a supply chain—to ‘pick, pack and ship.’”
The shortening of the supply chain is not unlike the struggles many traditional media organizations have faced since the advent of digital news—the conundrum of how to remain valuable to customers in the wake of increasingly easy-to-obtain products distributed via the internet. And while many media organizations continue to struggle with how to remain relevant in today’s oversaturated news market, IT distributors have a much clearer idea of how to generate revenue in light of digitally delivered software.
According to CompTIA’s latest white paper, distributors can utilize cloud computing to remain an essential force in the cloud market. Suggestions include acquiring companies to strengthen cloud business relationships and creating new logistical capabilities built specifically for cloud resellers and providers.
Cloud service customers will need distributors who can aggregate technologies from multiple vendors both physically and virtually to “deliver secure and reliable solutions to meet customers’ business, technology and regulatory needs,” April said.
“It really is an extension of the type of services they already provide,” she noted. “It’s very difficult for a small channel firm to have a good sense of what’s available and what is quality and what is not quality. … That puts them in a risky position to make recommendations to their customers to which cloud solution to use.”
CompTIA’s research has also found that more than half of the channel partners surveyed plan to use distributor cloud services for technical support for cloud solutions, which would help them to remain an integral part of the supply chain in spite of distributors’ increased access to the customer base. By positioning themselves as experts on cloud computing, VARs can prove that they are irreplaceable in the supply chain as sources of knowledge on new products and services. However, channel partners will have to remember that they will still need to balance new services with their original sources of revenue.
“There’s going to be challenges for distribution because as they transition to becoming middlemen for cloud services there are new competitors that they have to deal with on the telecom side in particular,” April said. “There’s also the challenge of keeping their legacy stream of revenue coming in.”
Channel partners surveyed in the study also said they plan to use distributor cloud services to aggregate cloud services and provide hosting services for their customers. Distributors aren’t letting any grass grow under their feet, either; Ingram Micro’s (IM) last week announced that it will be selling Microsoft’s (MSFT) Office 365 suite in Australia later this month.
