GTDC: Distribution set for continued growth

Over the past few years the rise of cloud has often prompted questions about the future of the channel and specifically the prospects for distribution.

There has been no doubt that the second tier of the channel has adapted, with some becoming cloud aggregators and others developing their own platforms and services, but sometimes question marks have remained about the future.

The Global Technology Distribution Council (GTDC) has picked up the challenge of looking into the crystal ball and come out with an upbeat prognosis for what the next five years hold for its membership.

The GTDC's Tech Distribution 2025 study quizzed a wide range of interested parties, including venture capitalists, OEMs, MSPs and customers, to find out what they thought would happen over the next few years. The broad conclusion is that distributors are becoming more interconnected across numerous areas making them fundamental in delivering success through the channel.

“When we commissioned this report, we wanted to get a complete end-to-end picture of IT distribution, from where it’s been to where we expect it to be in the years ahead,” said Frank Vitagliano, who has been CEO of the GTDC since April.

“Until now, the GTDC had not yet explored in aggregate each of the industry dimensions depending on distributors. Among other findings, we learned that the level of engagement and planning with distributors goes considerably deeper and broader than in past years," he added.

Along with the value that distribution already brings in terms of logistics, credit, marketing and reseller support there are expectations that virtual warehouse support for SaaS and cloud solutions will become one of the main competencies that they can offer in the future.

None of the existing reasons why a vendor works with a distributor are going away and the survey found that if anything they would become even more important over the first half of the next decade. Partner enablement and recruitment remained some of the main attractions of working with a two-tier model.

“This study confirms that many long-term distributor core services are still extremely relevant in the digital era,” added Vitagliano. “Distributor value is also on the rise. Corresponding business models and portfolios continue to evolve. Multi-vendor solutions are essential, and channel companies and vendors all want to work with distributors to deliver the products, solutions and specialized services consumers and businesses of all sizes need to thrive.”

That positivity around the prospects for distribution led to more than half of those surveyed by GTDC expressing the view that there would be double digit growth coming through the channel.

The latest GTDC report also builds on previous assertions by the industry group that distribution relationships with vendors were getting closer and as a result the value of working with a two-tier model was clear.