Enterprise-tech VADs were caught off-guard by disruptions and rapid digitalization during the pandemic years. How are they holding up now?
Disruptions during the COVID-19 pandemic clearly demonstrated the importance of establishing a resilient supply chains and having extensive logistical reach in corporate (cloud) infrastructures.
However, years ago, the advent of Software-as-a-Service and public cloud was a calamity in the world of traditional distributors: broadline distributors were being edged out by direct sales, and value-added distributors (VADs) saw the very source of their value-add decimated as revenue from traditional infrastructure started flowing to public cloud.
So, how are distributors in enterprise-technology ecosystems transforming to remain relevant in the post-COVID phase? DigiconAsia.net delved further into the topic with Mark Tan, Vice President and Country General Manager, Tech Data Singapore to find out.
DigiconAsia: In the age of most people having access to information at their fingertips, how has the role of distributors in technology ecosystems evolved?
Mark Tan (MT): VADs still sit at the center of the tech ecosystems. Over the last decade, technology has improved to meet the complicated business needs of end users. As a result, channel customers require partners with the scale, scope, and relationships to integrate hardware, software, and services into a unified business model.
VADs play a larger role in resolving end user issues by being responsible for designing, integrating complementary components, providing technical support and training, extending market reach through established networks, and delivering solutions to customers.
VADs also support the many physical and virtual elements offered through transactional subscription based models.
Over the years, distributors have come to play a more strategic and multi-faceted role in the supply chain. They have been embracing supply chain integration and using technology to increase efficiency, coordination, and data-driven decision-making, allowing them to respond to market demands faster.
As the market shifts products to service-based sales and delivery models, distributors are increasing their service, design, sales and support resources to boost their sell-through and sell-out capabilities, as well as value propositions. Resources such as marketing and partner management have also been added. Nowadays, they actively participate in market development, working with partners to explore new possibilities to broaden their reach.
DigiconAsia: There is a common view that distributors mostly fail to understand the way end customers work with channel partners, and mostly work only on billings…
MT: Reliable distributors play a critical role in solving three key concerns that channel partners face:
accelerating the IT ecosystem to increase agility, growth, and revenue
simplifying supply chain complications
streamlining go-to-market strategies
To do this successfully, distributors must have a good understanding of the way end customers work with channel partners. They should enable all types of businesses to leverage technology to achieve actual business outcomes, beginning at the manufacturing level with world-class vendors, then directly with channel partners, all the way until the final product is delivered to the end customer.
So, nowadays, we must have channel partners and end-users foremost in mind always. Overall, the technology ecosystem is as complex as it is critical, requiring specialized expertise from various stakeholders such as vendors, distributors, and resellers —are of whom are interconnected through channel partnerships.
Despite rapid technological changes posing significant business challenges, partners still view the ecosystem as a stabilizing force amid disruption. They rely on the channel not only as a resource to vet and scale new technologies, but also to obtain guidance and business solutions.
The ecosystems in the Asia Pacific and Japan region are recognizing the transformative potential of high-growth technologies, and are strategically expanding their portfolios to align with the escalating demands for advanced solutions. Many are planning to offer AI/ML solutions within the next 24 months.
When ecosystem partners are appropriately focused on delivering accurate data, useful analytics and secure storage, their customers will be able to take advantage of the potential of high-growth technologies.
DigiconAsia: How can distributors maintain a consistent and unified hybrid cloud experience for customers, to help them in their growth?
Mark Tan (MT): Maintaining a consistent and unified hybrid-cloud experience for customers involves a combination of strategic planning, technological investments, and effective management. This includes:
collaborating with leading technology providers to offer a comprehensive solutions portfolio that caters to different business.
ensuring compatibility and interoperability across different cloud environments.
implementing a seamless integration strategy that supports various cloud environments.
At the same time, providing comprehensive training programs and establishing a robust support system is crucial to enable customers to effectively navigate their hybrid cloud model.
Distributors also need to be aware of the benefits of having a complete lifecycle roadmap of hybrid-cloud strategy — from development to application modernization to operations. Adopting this approach essentially provides organizations with a systematic and well-coordinated plan across the planning, implementation, management, and optimization stages. Having this roadmap in place enhances operational efficiency, scalability, and overall business agility.
By aligning hybrid-cloud strategy with business objectives, organizations will find it easier to identify and mitigate risks, and ensure the security and compliance of their hybrid cloud environments.
Finally, a structured framework has to be established to encourage continuous improvement and adaptation to emerging technologies so that a culture of experimentation and innovation is fostered within the organization to speed adaption to changing market dynamics while optimizing costs over time.
DigiconAsia thanks Mark for contributing his insights on the changing roles of VADs in the enterprise-tech world.