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GTDC: Role of distribution growing as channel braces for IoT wave

The Global Technology Distribution Council is tipping IoT to be the next big thing and expects more collaboration between vendors and disties

Vendors are appreciating the insights that distributon partners can offer and making it more of a two-way relationship as look to the future.

Research from the Global Technology Distribution Council (GTDC) indicated that the days of vendors simply telling distributors what to do were coming to an end.

According to the The Distribution Landscape and Disruption Trends and Challenges to 2022 report there appears to be greater levels of collaboration between vendors and their channel partners and many want to increase that going forward.

“The distributor knows the vendors and works on the solution and knows how to glue it together. [We are] in the middle with knowledge and can pull down the education and training," said Peter van den Berg, general manager of the GTDC in EMEA.

The GTDC research found that the majority of vendors, 60%, saw more of their business going through two-tier distribution in the next three to five years with value-added players getting the bulk of that business.

Not only do vendors expect more business to go through distribution but there is an expectation that more of their product and service portfolios will also go via that level of the channel.

Performance rather than cost is one of the key considerations for those choosing to work with a distributor and those that want to remain market leaders will need to invest in making sure they can help vendors tap into growth areas.

Other themes that emerged from the research included the need for the distributor to provide digital skills and maintain speed and flexibility.

Despite all of the hype about AI the next big thing to hit the channel is going to be IoT and distribution needs to be in a position to help integrate solutions for the SME market.

Challenges

There are clear rewards for those distributors that can align more closely with vendors but there are some challenges identified by the GTDC.

Talent management and moving towards a more services led model are issues right across the channel and also cause some head scratching in distribution.

The journey that that tier of the channel is on is to move away from just being a specialist at holding physical inventory and move towards becoming a "repository of skills and know how", according to the report.

The data that distributors gain working with vendors and resellers is also going to become a useful tool with the need for more analysis of that information to not only improve the business but share back with vendors. 

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