Distribution and the way forward

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The world of distribution is fast changing, with new challenges and expectations being ever present.  IT Reseller spoke with Sukh Rayat (pictured), vice president EMEA at Avnet, to get his view on how the landscape is changing.

There have been a considerable number of acquisitions within distribution over the past few years, resulting in a global market that is served increasingly by larger global distributors. Margin erosion on hardware is affecting everyone in the channel, from vendor to reseller, as a result of commoditisation and increased demand one of the opportunities in technology that lies ahead is to leverage the mobility boom. 

Avnets Sukh Rayat believes that within the Auto ID industry, distributors need to think carefully about the skills they have and the services they can offer as VARs are increasingly looking to distribution to supplement their own skill base as they try to capture as much of this new business as possible. In order to support the ever increasing opportunities, distributors need to have in-house specialists to advise the reseller and partner community on the most appropriate solutions and to enable them to extend their service offering, he commented.

Full-Services and Solutions distribution

With this trend in mind, Rayat maintains that the coming 12 months or so will see an even greater demand for the Full Services and Solutions type of distributor. Distributors need to think more and more about the challenges resellers and solution providers face and then develop their own business model around providing the end-to-end assistance. This will include everything from providing financing, software development, training and professional services, he said.

According to Rayat, another key area of development that is destined to become increasingly important concerns the breadth of product that a reseller or solution provider will need to offer. Traditionally, he pointed out, Auto ID solutions were confined to specific applications that integrated with other systems. However, increasingly end users are looking for a single supplier to provide a full end-to-end solution, from the servers and networking in the office through to push email on rugged mobile devices in the field, he said, adding: This will make it harder for the traditional companies to compete and is where a Services and Solutions distributor can help make the playing field somewhat more level. In addition to wireless and mobility products, Services and Solutions, Rayat believes distributors need to offer partners specialist knowledge and support for non-traditional products, such as servers, storage and networking. This will enable VARs to extend their solutions further into a business, thereby meeting the changes in end user demands and increasing the overall value of the project, he said.

Rayat makes the point that more end users now require the reseller to provide end-to-end solutions because they may not have the specialist solutions experience in-house, and this end-to-end will become increasingly longer as time goes by. So those wanting to become Full Service & Solutions distributors need to look at how they can plug the gaps within their knowledge base so that they can assist the reseller with the selection, deployment and installation of products, services and solutions, he said.

Industry standards

Moving forward, Rayat maintains that the technologies used on laptops, PCs and enterprise mobility devices will need to become commonplace within Auto ID. IT managers want to run remote diagnostics on devices used out in the field and remote workers and their managers want push email, and the Auto ID industry needs to be able to support this, said Rayat.

He also believes the modern distributor needs to think more about actual implementation of the software solutions and devices; putting together the complete solutions pack. Rayat commented: We are already offering B2Ms mprodigy mobile device management software and although solutions such as push email are not currently being heavily sold through the traditional Auto-ID channel, the recent acquisition by Motorola of Good Technology a business software solution that provides a push email service to Windows Mobile devices will enable resellers to win business in that market.

Printing technology

In terms of the solutions themselves particularly with regard to mobility Rayat maintains that the focus is commonly on the handhelds and that the opportunity for mobile printing should not be overlooked. Mobile printing offers two bites at the cherry; the initial hardware and services sale, plus an ongoing revenue stream from repeat media orders, he said.

Rise of the consumer device

The continued influx of consumer-grade PDAs and smart phones also poses some challenges, but ones that Rayat believes can be overcome. He maintains that, because many of these solutions will be part of the end users critical business environment, it is important for the resellers sales process to include discussions around the total cost of ownership with the end user. Enterprise PDAs might have a lower initial purchase price but are unlikely to last as long and can suffer from high failure rates if used in traditional rugged applications, said Rayat. This will result in expensive repairs, lost data and downtime something that end users will not want to be faced with and that rugged devices will prevent.

Building relationships

As the market matures many OEMs are reducing the number of direct partner relationships as they move to a 2 Tier model, Rayat points out. Knowledge and support will more commonly be provided by carefully trained and appointed Services and Solutions distributors that will also provide the route into key OEM personnel, he said. In addition, Rayat cites marketing as another way of developing relations with the VARs. Marketing in conjunction with the reseller community is not what the industry has traditionally expected from distributors, but this is another key wrap-around that Services and Solutions distributors can provide to enhance the range of services offered to their partners, he said.

Local presence

Rayat concluded by making the point that in order to provide an effective Full Services and Solutions offering, distributors need to have local people in the field to meet and work with the resellers and advise on product selection, technical issues, integration, software development and hence enable the reseller to develop solutions. With this in mind, Avnet will continue to invest in our resources, he said. We already have offices in most European countries and dedicated wireless and mobility teams and experts.  Therefore its relatively easy for us to add even more personnel specifically for the wireless mobility arena as the market develops and requirements increase.

[photo 1] Distributors need to think more and more about the challenges resellers and solution providers face and then develop their own business model around providing the end-to-end assistance. Sukh Rayat.

[photo 2] Avnets Central Warehouse and Integration Centre,Tongeren, Belgium.

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