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The Global Technology Distribution Council (GTDC) has revealed a snapshot of how Covid-19 has affected distributors, and it is clear that those that had already taken steps to have a cloud and SaaS (software-as-a-service) portfolio saw demand for those technologies surge in the last few months.
The channel organisation has produced its Thriving in the new normal report, based on interviews conducted between March and June.
The key trends that emerged included rapid year-on-year growth in cloud that extended to the small and medium-sized enterprise (SME) customer base as they started to look for solutions to support staff working from home during the pandemic.
The GTDC report found numerous examples of distributors that were able to meet the changing demands from customers because of decisions made in recent years to expand cloud, increase support options and embrace digital technology.
“This report provides sharp focus on how distributors, their vendor partnerships and digital services are evolving in the cloud era,” said GTDC CEO Frank Vitagliano. “The insights are especially timely in that all the interviews and analysis occurred as new virtual directions took off with utmost urgency this year.
“Distributors responded swiftly and deftly in a manner that underscores both traditional reliability and advantages, as well as progressive new business models in full force.”
The expectation is that the investments and decisions made by customers in recent weeks to embrace digital will mark a shift in the way many users operate. Stacy Nethercoat, senior vice-president, cloud solutions Americas at Tech Data, was quoted in the GTDC report pointing out that the coronavirus had accelerated existing market trends.
“Businesses have been increasingly moving workloads to the cloud for the last several years, but today’s sudden and dramatic shift to digital environments is unanticipated and unprecedented,” she said. “I expect we’re only going to see more of that in the near future, and that revenues from IT sales into cloud environments will continue to outpace sales into traditional IT environments.”
Distribution playing to its strengths
The GTDC report highlighted several trends that support the argument in favour of distribution’s role:
- SMEs have been investing heavily in digital innovation, which bodes well for distributors, vendors and solution providers as the channel serves this market with unsurpassed proficiency.
- IT/ICT professionals and line-of-business leaders need each other like never before – these bonds are poised to strengthen in the months and years ahead.
- Tech innovators cannot thrive alone – and are looking to engage the channel at earlier stages of maturity compared to the past, paving the way for new advances in partnerships and service levels to customers.
- Business solutions are more complex than ever, and no one manages that complexity better than distributors. They are breaking into promising new industry dimensions beyond the cloud, including IoT, XaaS, mobility, security, analytics and machine learning.
Other comments in the report pointed to the increasing complexity in tech sales and the need for distribution to help navigate resellers through those challenges.
“The technology companies we serve, the ones that create technology for end customers, live in a multi-vendor world,” said Mark Taylor, senior vice-president of global strategy and business development at Arrow Electronics, a GTDC member. “The challenge for them is to help customers purchase, provision, manage and consume all of the cloud subscriptions their customers depend on, despite the fact that every vendor has its own payment schedule, renewal terms, termination policies, and more.”
It is hard to think of a distributor that has not embraced and developed its own cloud approach in recent years, and Vitagliano said many GTDC members had been able to benefit from those investments.
“Distributors have come a long way in cloud and digital services,” he said, adding that they would need to keep that evolution going in the future.
“Collaboration and multivendor solutions are more essential than ever,” said Vitagliano. “It’s an ideal time for vendors and solution providers to deepen strategic relationships with distributors. They are providing groundbreaking new efficiencies and partnership opportunities that will make a profound difference going forward.”