Technology is transforming at an alarming speed and, according to conversations at the recent GTDC Summit in Oceanside, California, reliance on the IT industry is rising at a similarly fast pace. That equates to strong short and long-term demand for channel-focused organizations. Fast-paced innovation requires collaborative efforts from the entire community, from the solution providers who own and manage the business relationships to the vendors and distributors that supply technologies, logistics, financing and a litany of other support services.

Without this collective IT ecosystem, the pace of new technology adoption would slow significantly, with a profoundly negative impact on smaller and more resource-limited businesses. Research presentations and testimonials at the GTDC Summit emphasized the valued role of distributors in this process. With demand and the speed of innovation rising, the IT industry needs these orchestrators to empower vendors and solution providers, supporting critical processes such as sales, technical support, marketing, logistics, and financing. Investments in cloud enablement and digital marketplaces are expanding offerings and bundle options and increasing the speed of delivery.

A greater focus on the buyer’s experience and client satisfaction, both essential to sales growth and retention, are also boosting the value of strong distribution relationships. Very few vendors have the ability to reach and effectively influence all of their potential customers today. IT distributors provide that support, delivering a variety of services to (and through) a wide and diverse network of solution providers and consultant partners. The rapidly increasing complexity of technologies, delivery systems and business models makes these key orchestrators more important to ecosystem success every day.

AI Will be a Game Changer  

While the sales environment for PCs and devices has slowed after the flurry of activity during and following the pandemic and supply chain hiccups, that market looks to rebound in the coming months. Summit speaker and IDC president Crawford Del Prete emphasized that one-fourth of all IT spending would be on generative AI by 2027, creating a $151B opportunity for the IT industry, including a projected 60% of servers and PCs enabled with those technologies.

That presents a tremendous refresh opportunity for the channel, and not just for hardware. With 51% of enterprises operating as digital businesses, according to Del Prete, today’s buyers demand more flexible consumption models, and look to solution providers and vendors to provide those options.

AI is a technology business enhancement tool that has the promise to invigorate sales and influence the industry over the next several years (if not longer). Distributors are ready, willing and highly capable to help vendors and solution providers bring those advances to the masses. In addition to all the traditional distribution programs and benefits, they can provide partner education and enablement for AI-based solutions, augment sales and marketing, and deliver technical support to those in need.

Dave O'Callaghan, Managing Partner of Vation Ventures shared great insight on the innovation discussion in a panel session at Summit with Mike Arrowsmith of NinjaOne, Dan Campbell of Arrow ECS, and Darren Williams of BlackFog. That group emphasized the need for vendors to "lean in” on innovative solution provider partners and utilize the power of distribution to spur sales and adoption of AI-enabled solutions and other new technologies.

According to innovation experts, the key to success for that community is to quickly scale sales and adoption to gain more eyes, revenue and market share. A more proactive strategy is required to ensure potential partners have the tools, education and training to sell, implement, and support unfamiliar offerings.

Are vendors’ partners capable of explaining these new solutions to buyers and end-users? Can they help the organizations they support realize the full potential of these investments? Those responsibilities get a lot easier for those who rely on IT distributors.

Embracing New Procurement Options

While innovation is increasingly being embraced in the business community, those buyers are also shifting their purchasing habits and preferences considerably. Whether they’re attempting to avoid interactions with overzealous salespeople, got more comfortable ordering from Amazon during the pandemic, or just prefer the convenience of online shopping, electronic ordering is a norm the IT industry must embrace in 2024.

At Summit NA, I shared some high-level findings from GTDC’s new Beyond the Marketplace Report, which looked at the latest trends in procurement, including the increasing shift to digital platforms. With 95% of CEOs moving to a cloud-first strategy and buying habits changing, distributors are investing heavily in systems that make it easier for partners, vendors and end-clients to interact in the sales and purchasing process. Advances in cloud marketplaces and digital platforms also provide greater scalability, bundling options, and integration and data insight capabilities to the supplier community.

Distribution continues to invest to further empower the innovators. No other organization can offer the same level of support, community, technical creativity and business acumen as an IT distributor. Distributors’ exponential reach and capabilities provide emerging vendors with unparalleled scalability and continue to expand opportunities for even the most established manufacturers and suppliers. No two business strategies are the same and distributors are masters at customizing programs and services to meet the current and future needs of different partners.

With close connections to solution providers, vendors, analysts and other channel-related communities, their perspective is unique, as are resources they create for each part of the channel ecosystem. Digital marketplaces are only one of the many systems that bring those groups together, helping orchestrate a path forward to ensure success for everyone, including their collective clients and end-users. Get more details by downloading a free copy of the GTDC Beyond the Marketplace report.

A Sound Financial Proposition

Those who have spent any time working in the channel understand the inherent value of distribution for OEMs, ISVs and other technology providers. For a number of reasons, including all the factors previously discussed in this post, these alliances most often have a multiplying effect on sales and technology adoption capabilities. These relationships have a positive impact on the entire IT ecosystem, from the vendors and distributors to the solution providers and all of the businesses and end users they support. Everyone wins.

Unfortunately, the complexities of the channel can make it harder for channel leaders to calculate and explain the return on these critical alliance investments to their financial teams. At GTDC Summit NA, we took what we feel is a good first step to simplify and quantify the value of distribution relationships in a pre-day forum with industry CFOs.

A primary goal of the inaugural GTDC Financial Roundtable was to enlighten and gain critical feedback from those responsible for crunching the numbers. Channelnomics founder Larry Walsh shared the latest research and industry perceptions of distribution and longtime channel chief and industry advocate Donna Grothjan provided a deep dive into some of the many roles that distributors fill for the vendor and solution provider communities.

Topping off this highly interactive session was a panel discussion with the CFOs from Arrow ECS, D&H Distributing, Ingram Micro and TD SYNNEX. With some of the brightest financial minds in the IT industry opening sharing ideas and insight, the conversation was quite enlightening. We plan to further these engagements in the future and share key points with the GTDC community.

Those are just a few of the many highlights of the 2024 North American event. If you missed it, the good news is there’s still time to register for the 2024 GTDC Summit EMEA, June 4-5, at the Grand Hotel Huis ter Duin in Noordwijk (the Netherlands). Executives from across the globe will come together to discuss critical industry topics and developments, including updates on the GTDC sustainability project. I hope to see you there.