The changing role of distribution

How can IT distributors in the Middle East play a cruciall role in cloud computing?

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By  Manda Banda Published  October 2, 2011

I often get asked this question in the market more than any other and it generally comes from vendors, although some resellers do ask it as well.

It's a question that has increasingly been asked especially over the last couple of years. Is cloud computing and the whole managed services play a bigger challenge now than ever? Can distribution find a role in the world of cloud computing where most of the world seems to be slowly moving towards an era where computing power is being purchased in the same way people buy or use electricity?

The answer to these questions is yes in my view. It seems that in order to predict the future of distribution in the Middle East channel one has to first answer some questions around the value that distributors offer and look at some of the advancements they are bringing to market that could help their long-term survival in the channel.

At the most basic level, distributors are efficient at moving a physical product from point A to point B. Will there be a need for that in the future given the strong emergence of power retailers? I believe it's difficult to argue that over the next 10 years the need to move hardware is going to go away. In terms of software, the IT industry hasn't really been moving it around physically for quite some years now and it's not about to change.

There are a host of other things distribution does that adds value to the channel. One of the most important is providing credit to resellers although in the Middle East, this has been a controversial issue and largely blamed for the recent reseller runaways that have especially rocked the UAE channel. But given the role credit has played in reseller runaways particularly in Dubai, might there be other ways to inject credit into the Middle East channel?

A fundamental question that has to be answered is when will IT users in the region start buying computing power like they do electricity? The answer to that is probably never in my view.

I hold this opinion not because I don't believe in the cloud computing business model, I do. Cloud computing is real and it is undoubtedly going to change much of what we know today about building, selling and supporting computing power in the Middle East and elsewhere around the globe for that matter. Realistically, cloud computing has zero potential to be the only way IT solutions are going to be sold or purchased in future.

That said, the supply chain is changing and distribution in the Middle East is going to be challenged even further to add value in a sector where warehousing and physically shipping product will become inconsequential hence the need for constant innovation with some distributors in the region already taking first steps towards the cloud.

Aptec Group in partnership with Cisco, APC, VMware and NetApp earlier this year launched the Datacenter Partner Alliance Programme, a new initiative that aims to leverage the company's strong tie-up with best-of-breed vendors in data centre technology and services. Through this programme, Aptec and Track Distribution aim to deliver comprehensive data centre solutions, cloud type services and provide training to resellers in the region. In addition, the programme has been tailored to help resellers to build their own managed services capability with the backing of Aptec and the four alliance vendors.

This is an example of the type of value-add that will be required going forward in Middle East distribution. There is no doubt that some of the services distributors have offered vendors in the past will be abolished as markets in the region mature and transform.

However, it's hard to argue that distribution is going away because of cloud computing. In some ways, I view this shift as an opportunity for those in distribution to even launch higher-margin services business models which resellers can tap into and resell to their end-user customers.

There is no doubt that cloud computing is going to be a force to be reckoned with in the Middle East market, but it won't be the only one. Whether it will change much of what we know today over time, is anyone's guess, but the distribution sector has been dealing with the pressures of the IT industry for decades. This isn't its first difficulty, and it certainly won't be its last.

2644 days ago

Great Review Very HelpFull Keep up The Dicussions Coming

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