July 2021 — By Frank Vitagliano, CEO, Global Technology Distribution Council

Cloud and everything as a service aligns well with the capabilities of distribution. Going back decades, maybe even twenty-five years or more, IT distributors have driven virtual innovations for their partners. Where would vendors, IT services providers, and the millions of businesses they support be today without that early and ongoing support?

The good news for those companies is that distribution continues to deliver and push the edge with cloud and “as a service” offerings. Strong growth across those categories was just one of the positive trends highlighted in our recently released GTDC report, The XaaS Revolution. Year over year cloud business through distribution was up 27% in the U.S. and 25% in EMEA in 2020.

Our report also identified some of the new channel opportunities resulting from XaaS and related cloud business models. For example, distributors can empower vendors in these transitions by building and executing cloud-related sales programs and boosting their marketing and partner recruitment capabilities. The capacity to reach an exponential number of MSPs, MSSPs, VARs and other IT services providers in this business model are invaluable and essential to their success.

Distribution Drives Innovation

XaaS upstarts and incumbents can greatly benefit from the ingenuity and reach of distributors. Our members understand the “big pivot” required to succeed with the latest value delivery models. Distributors offer innovative, highly scalable, and efficient platforms to help vendors, IT services providers, and end clients get the most from their technologies.

Investments in everything-as-a-service are ensuring the channel continues to play a major role in technology advancements. Vendor and IT services providers can no longer afford to take an overly cautious approach to the cloud. Tech companies relying heavily on past methodologies and business models while competitors are gaining traction with on-demand offerings could be in for a big awakening in 2021.

IT distribution has a number of resources to prevent that from happening. From application platforms and technical training to sales and marketing support programs, their partners have access to a multitude of XaaS-enablement resources. Vendors and IT services providers can leverage any or all of these tools to address the specific needs of their respective customers.

A Silent but Valued Partner in the XaaS Revolution

In a world driven by 24/7 news and social media, with most attention going to the big shiny objects or extremely negative events, it is all too easy to overlook the positives. Distribution is known for playing in the background while supporting its partner communities. Despite the size and reach of these organizations, few ever promote what they do behind the scenes to empower their partners. That conservative, channel-focused communications approach makes it easy to overlook some of their most powerful innovations.

Cloud and XaaS are perfect examples. No tenured channel professional should question the value distribution brings to the table with all the various virtual delivery models. Tens of thousands (maybe more) of vendors and IT services firms, especially MSPs with experience using management portals and configuration services, have benefitted from their support over the years.

Based on recent and ongoing investments in cloud-related activities, we can expect a larger and different mix of companies to engage with distribution in the future. Advanced XaaS programs and powerful new engagement platforms provide greater power to channel-oriented companies and the businesses they target and support.

The Cloud is a Multi-Dimensional Opportunity

Virtual technologies are becoming increasingly more complex and heterogeneous. Businesses may employ multiple cloud models to support the diverse needs of remote workers and global customers. That may explain why, according to a recent Deloitte report, more than 90% of global enterprise companies expect to be utilizing hybrid cloud services by 2022.

Those flexible consumption models will continue to accelerate based on the benefits they provide businesses of every size. On-demand services create financial predictability and lower the cost of acquiring and retiring technologies (the CapEx vs. OpEx justification). XaaS models can also strengthen relationships between vendors and provider partners as they work harder to boost customer satisfaction and minimize platforms defections.

Distributors are an invaluable piece of the consumption equation. From bundling and deploying the various services to providing technical support and billing, skilled cloud aggregators ensure that everything comes together seamlessly for each customer. Those structured programs drive sales and profits across the channel ecosystem.

If you or your organization are exploring opportunities with “as a service” cloud models, download a copy of the XaaS Revolution: Distribution’s Pivot to the Future report today.

Download the Report