“In my opinion, distributors setting up their own cloud environment and selling them on is quite a threat in many ways,” added Stuart Stitt, VP, Managing Director, Fujitsu New Zealand, drawing on over 25 years of industry knowledge.
“Fujitsu is a multinational IT company and we have different pressures because we have a parent company which sets up their own cloud platform which we find difficulty in reselling. Also, we’re different to smaller organisations and resellers who are leveraging off a distributor or benefiting from easy access to capital or vendor finance, which again, is quite a threat to us.”
In offering a point of clarity to the discussion, Verykios was quick to acknowledge Stitt’s concerns not only as a Distribution Central reseller but also on a broader scale, believing reseller concerns to be valid, providing they exist.
“We are not competing with our customers and neither are the other two distributors at this table,” Verykios clarified. “That said, Stuart raises a valid point and we have identified seven distributors in the market who are in fact competing with their customers but through Distribution Central, you can only access our marketplace as a reseller.”
A statement endorsed fully by the accompanying distributors, with Grauman confirming that Westcon is “not competing with its resellers” and Parker revisiting Rhipe’s role as a distributor.
“Just forget what we’re selling and forget the industry,” he explained. “The role of the distributor is to sit in the middle and add value, and if we stop sitting in the middle and start sitting next to the customer then we’re not being a real distributor.”
In fact, added Verykios, the distributor becomes a “disintegrator and if that is the case they must accept that.”
But Stitt’s impression of the channel, and how cloud is impacting distribution and the changing role of the reseller is not unfounded.
According to Grauman, as little as two years ago, 60 percent of Westcon’s Cloud Service resellers didn’t exist, reflecting the pace of change within the industry and highlighting that for Westcon specifically, resellers of the past are not necessarily resellers of the future.
Speaking as a Westcon reseller of the past, and one of the future, Mark Hamilton, National Manager of Enterprise Solutions, Eagle Technology, says that for the systems integrator, “cloud is an extension of what we’ve always done.”
Almost eliminating the need for wholesale change in how resellers go to market, from the perspective of Hamilton, there are two things resellers ask of distributors, cloud or no cloud.
“We want efficiency of service and fair pricing,” he added. “It’s real simple stuff.”
Reflecting the overriding tone of the reseller community at the table, Hamilton believes cloud represents a “new bag of tricks to play with” in the market; “We now need people with expertise in visualisation, storage, security etc and we’re finding that our technical guys have real fire in their bellies because of the new advancements in technology.”
Forward-thinking in nature but traditional in approach, Hamilton acknowledged that Eagle did consider the option of going direct but quickly flagged as the company “certainly values our distribution channel.”
On the topic of value, and how certain distributors are in fact enabling, rather than competing, with their channel, Parker believes the role of Rhipe in particular is to educate resellers and work on their behalf, presenting knowledge to better enable resellers to go to market.
“But don’t resellers need to do that?” asked Hamilton, questioning the role of the reseller in the chain.
“Taken in context,” Parker responded, “we’re not suggesting that the distributor tells the reseller what to do but it is about adding value in helping our partners understand market changes so they can make important decisions and remain as a powerful player in the middle.
“If a reseller is thinking of Option A, our job is to also provide Option B and Option C to better enable their decision making process.”
For Hamilton however, the reseller “needs to do the thinking for themselves.”
“They have to think in the context of how they are operating,” he explained. “A recent examples includes our work with a company who has a strong GSI presence and big user base.
“For us it was a fantastic application to put into a cloud environment so on many occasions the general paths of adoption are pretty straight forward and they’ll emerge more and more because that’s the next step - taking applications and making them appropriate.”
Reenforced by Stitt, while also concurring with Parker’s call for more reseller options, Fujitsu employs “highly skilled architects” operating at the peak of the technological mountain, tasked with pulling together information from distributor and manufacturer to ensure customers have multiple choices when making buying decisions.
But as Hardie of Datacom interestingly points out, and as the inaugural Reseller News Distributor Roundtable moves into how traditional distributors are changing their business models to incorporate the cloud, resellers should ask themselves; “What were you doing before cloud?”
To read Part Two of the inaugural Reseller News Distributor Roundtable, check back to Reseller News next week for more details.
This roundtable was sponsored by Distribution Central, Rhipe and Westcon. Photographs by Jason Creaghan.