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The future of distribution in a cloud-dominated world

May 02, 2022 | Shannon McWilliams

Selling through the new subscription, consumption and platform norm

In just about every meeting I’m in with potential vendors searching for a distributor, three areas are consistently brought up: subscription, consumption and platform. It’s easy to understand why, as these new selling motions have permanently changed the way so many technologies are bought.

Long gone are the days when companies purchased expensive permanent licenses for enterprise-resource planning (ERP), customer relationship management (CRM), office productivity software and costly on-site hardware. Rather, organizations are increasingly investing in cloud, as it provides the flexibility to adapt to changing market needs.

Distributors have taken on an aggregator role, bundling together relevant IT solutions in traditional and newer emerging markets, which is vital to the future of the channel.

But what does this mean to vendors selling those solutions? And what about IT solution and service providers? How can distributors, i.e. aggregators, enable growth and success to both? Nearly every software-as-a-service (SaaS) product comes with APIs enabling it to exchange data with other apps.

Further, according to HubSpot, “A platform plays a more active role in coordinating how multiple products work together. You can picture a platform as a hub, with spokes connecting other products to its center. The hub binds those disparate products together and orchestrates them in a common mission. A platform creates a stable center of gravity for your tech stack."

Try this analogy on for size: Think about how we purchase and consume our favorite television shows. We can subscribe to just one or a combination of several streaming services — Netflix, Peacock, Showtime, Amazon Prime, HBO, etc. — all of which can be streamed from one platform, like Apple TV, Roku or another provider. All we have to do is turn on our TV and we can see our subscription services in one consolidated place (platform) from which we can also watch (consume) them.

Let’s explore this topic as it pertains to how Arrow brings subscription, consumption and platform together to help IT solution and service providers and vendors alike.

Service or solution gaps? Lean on a distributor to fill them

From an IT solution and service provider’s viewpoint, constant innovations and changes in the technology landscape present challenges to be tackled and opportunities to undertake. For starters, IT providers:

  • May not be equipped to absorb the changes in the hardware and software markets, having neither the bandwidth nor the expertise.
  • Potentially lack resources or training to embrace subscription, consumption or platform models. This might include the inability to work through seemingly complicated billing issues or to manage recurring revenue that comes with switching to a platform-as-a-service (PaaS) model.
  • Might be unable to provide capital that enables customers to finance their purchases.

However, a distributor with broad and deep connections to various vendors and technical experts can architect a solution to help channel partners meet customers’ needs. Further our financial services enable IT solution and service providers to offer financing to their customers, including as-a-service and consumption financing, so they can buy the technology they need without disrupting cash flow.

Distributors enable vendors to expand scale and reach

Similarly, vendors may run across challenges and opportunities getting their solutions to IT solution and service providers. For instance:

  • While money is moving from one part of the channel to another, vendors aren’t always able to support every one of their customers in making the transition to selling their products in a consumption-, subscription- or platform-based way.
  • Vendors could be missing out on potential markets. A distributor can help them understand IT providers’ needs and present selling opportunities they wouldn’t otherwise have.
  • Since vendors rarely sell only hardware or only software anymore, a distributor can help combine all products on one platform, enabling customers to buy them any way they want — and thus, speeding up the sales cycle.
  • A vendor can attain reach and scale through a distributor by highlighting all its products in one place, enabling IT providers to access these products and services more easily than going it alone. Similarly, vendors are drawn to distributors because they offer this consolidated product access to a broader pool of IT providers that can sell their products.

Embrace ongoing change

The transformation of distribution to aggregation is well underway and will continue to morph as the needs of vendors, IT solution and service providers and customers change. Arrow can tie it all together in a package that solution providers can offer clients, all while adding their own value. Arrow is that “Apple TV” or “Roku” that enables service providers and vendors to get what they want all in one place — specifically ArrowSphere, our cloud delivery and management platform.

We simplify a complex, ever-evolving ecosystem, enabling IT solution and service providers to get their customers what they need and vendors to bundle their services together in one valuable, easy-to-use place.

Want to learn more? Contact us to find out how we can help you position your business as the evolution the channel continues.

This article was originally published in July 2021 and has been updated for relevance.

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