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Distribution or Solution Aggregation: Redefining Roles in an Evolving Value Chain

Posted by Sergio Farache on Nov 19, 2018 1:00:00 PM

In a recent Authority blog post discussing the rate of change taking place with technology, Moore’s Law was cited claiming that technology doubles itself every 18 months (Transforming at the Speed of Cloud). This certainly appears true as next-generation technologies continue to evolve our industry at a mind-numbing rate. Given the dynamic and disruptive nature of the digital transformation underway, it’s no surprise that the protocols and concepts associated with the way technology is delivered are also changing.

Evolving Distribution Model

For many years the distribution model has been evolving, adapting to new market challenges and ways to better serve the value chain in which it operates. The realities represented by the advanced signature of today’s digital resources have redefined the meaning of distribution in representing the scope and complexity of the capabilities and services offered today.

Inferred within the legacy meaning of distribution—regardless of industry, product or service—was a transactional or fulfillment component – customers had a product need; distributors filled it. The effort was very binary, based on the general protocol of: need – request – delivery (or distribution). Simply stated, service involved little more than fulfilling the customer’s order request. Today, however, the complexities of next generation technology requires channel partners to be solution aggregators. Aggregators create solutions that best serve their customers’ needs and help them stay competitive using a range of vendor and product options. Serving as a solution aggregator elevates customer involvement; adding a layer of complexity and sophistication to the channel. Operating in a solutions-based capacity, requires a deep understanding on the needs of the market and the knowledge required to aggregate all the elements, simplify the complex and provide the capabilities to maximize the adaptations to ensure scalability.

Tech Data: Solutions Aggregators

Tech Data’s business operations support this solutions aggregator concept; one that is less centric to the delivery of product, brand and infrastructure and more aptly characterized by enabling and orchestrating a range of products and services that facilitate customer success. In an article earlier this year in CRN, Tech Data’s Andrea Miner underscored the importance of shifting from products to business outcomes and solutions. “It’s the line-of-business people who influence 80 percent of all technology purchases and who fund 60 percent of all technology purchases,” she said. “Solution providers will no longer succeed by working with customers' IT departments. The conversation is shifting away from IT performance to business outcomes; producing new business models.” Miner’s viewpoint is also being echoed among industry analysts, global consulting businesses who see survival in the digital transformation, contingent upon changes in one’s business practices.

Given the dynamics inherent within the digital transformation, it’s clear that the premise considered at the outset—solution aggregation—is the better representation, and the evolutionary path Tech Data’s business strategy supports.  Our ability to unify, orchestrate and drive the access, interaction, delivery and services required to solve and address business challenges at scale is the foundation of how our industry will continue to grow and transform value creation from a linear model perspective to a multi-point model; enabling collaboration between all of the ecosystem’s participants.

Vertical industry expertise has been part of Tech Data’s DNA for years. Our ability to achieve deep learning and develop a comprehensive understanding of the specific vertical industry needs and help others exploit opportunities is critical to maximizing a solution. Additionally, Tech Data’s access to a broad base of information and resources, and the ability to integrate the strengths of each into a multi-branded solution that supports the most common and most complex problems. If you need help in becoming a solutions aggregator, Tech Data can help. Our solution specialists can help you better meet the needs of your customers and grow your business.


About the Author

Sergio Farache is senior vice president, Global Cloud Solutions at Tech Data. Sergio joined Tech Data as part of Tech Data’s acquisition of Avnet Technology Solutions. Prior to Tech Data, Sergio spent more than 20 years in entrepreneurial leadership roles with a range of companies.


Tags: digital transformation, Distribution, vertical marketing, solution aggregator, channel marketing, solution selling, aggregation, vertical selling, new business models, operating models