2017 will be remembered as the year that distribution - for better or for worse - dominated the headlines in New Zealand.
Under the spotlight and seemingly under question, countless rounds of RFPs have caused the channel to stutter along during 12 months of vendor reassessment.
Whether it be at tier-1 or tier-2 level, channel change has reshaped the supply chain.
But as vendors continue to call distributors to the table, demanding answers and strategies for the years ahead, are channel managers missing the point?
Because in observing objectively from afar, distribution is seen as a scapegoat.
Yes, distributors must evolve and provide genuine levels of value. Yes, transactional box shipping alone isn’t enough to help both vendors and partners grow. And yes, the relevance of distribution is rightly questioned as new and emerging technologies flood the market.
But when a vendor isn’t hitting the mark, should the channel manager look a little closer to home?
It’s easy to blame the good old trusted distributor, an area of the ecosystem forever questioned by vendors and partners.
Market share is poor… remove one, add another and blame the other.
As one distribution leader shared recently; “channel managers know a distribution review can keep them in a job for another year.”
While no self-respecting - and usually under-performing - channel manager would ever admit to such a tactic, a dangerous pattern is emerging across the market.
Because if a failure to meet quarterly targets triggers an instant review, such disruption has the potential to cause serious long-term harm to the channel.
Throw in the M&A madness that has flipped distribution upside down during the past few years and you have a recipe for disaster waiting to happen.
The channel is at strength when the supply chain is consistent and predictable - chopping and changing for no valid reason doesn’t help create the stable environment required to do business.
What is value?
In the interests of objectivity however, distributors must evolve to maintain the right to do business through the channel.
There’s still evidence of distributors running dated incentive programs and enablement processes, backed up by archaic and predictable market development plans.
Perhaps partners still value the junkets and perhaps long lunches and boozy trips will never go away, but blasting an EDM offering another “trip of a lifetime” to sell more kit hardly constitutes as value-add in the modern value.
It’s not an understatement to say that the role of the distributor does require work.
To quote a fellow managed services provider in the Kiwi market; “if I want thought leadership and business advice, why would I ask a distributor? How can a distributor help grow my business?”
Because one-dimensional distributors are under threat not just from vendors demanding more, but from partners desperate to transform.
The shift to annuity-based billing and new business models creates a continuous cycle of challenges for the channel, alongside the rise of a new breed of partner.
Would a born-in-the-cloud partner use a distributor? Would a consultancy house call for support? Would a start-up see value?
The answer at this stage is no, creating a need for distributors to step up or step aside.
But as history shows, distributors will do just that and once again retain that level of relevance in the market, even if trigger-happy channel managers continue to pass the blame.