Distributors Aim To Be Trusted Advisers

*Editor's Note: This is the ninth of 10 installments of our 5 Hot-Button Issues series, in which we spotlight five things solution providers should keep an eye on over the coming year in various IT and channel categories.

Once focused primarily on getting products to customers, distributors have changed with the times as the needs of solution providers, vendors and end users have evolved.

These days, distribution executives are just as likely to add new services to their menu of offerings as they are new products. They're also apt to package more of their offerings together in new and creative ways.

And just like solution providers, distributors are positioning themselves to become trusted advisers to their customers. To that end, here are five big issues that distributors are spending a lot of time thinking about.

1. Managed Services
If you ask 10 people to define managed services, you'll likely get 10 different answers. So it comes as no surprise that distributors have their own initiatives to get into this space. The problem they face is figuring out how to offer services that many solution providers already offer through MSPs or other partners or through their own significant investments.

Ingram Micro plans to launch a separate professional services division in October comprised of its own sales and technical support teams that will complement solution providers' own services and potentially replace them at a less-expensive cost, according to the Santa Ana, Calif., company.

"You look at our product business and it's grown because we helped VARs reduce an inventory infrastructure that was a duplicative investment. The same economies exist around managed services," said Justin Crotty, vice president of North America channel marketing, earlier this year.

Meanwhile, Synnex is more than a year into its remote managed services initiative through its acquisition of a minority stake in Bangalore, India-based Microland, and Avnet offers managed hosting services by utilizing excess capacity in its own data centers.

2. Enterprise Goes Mainstream
Are enterprise technologies becoming more commoditized or are small-business IT infrastructures getting more complex? Probably the truth lies in the middle, which is why more enterprise products are becoming available through broadline distribution.

Recently, McAfee authorized Ingram Micro and Tech Data to carry its IntruShield Network Intrusion Protection and Foundstone Enterprise Vulnerability Management products. Elsewhere, Synnex signed with Symantec to distribute former Veritas storage solutions.

Synnex's new Technology Solutions Division aims to compete against enterprise distributors such as Arrow Electronics and Avnet, said Harry Edwards, senior vice president of enterprise business at Synnex, Fremont, Calif. "Our sales coverage model rivals the coverage model of any of the value guys," he said. 3. Financing
Finding new ways for VARs and their customers to afford IT solutions has become a full-time job for teams of distribution associates.

ScanSource, Greenville, S.C., has partnered with Smoky Mountain Funding on Second Chance, a leasing program for end users that do not have great credit. The initiative lets solution providers service customers while not assuming any credit risk themselves, said Tim Ramsey, vice president of Reseller Financial Services at ScanSource.

And in June, D&H Distributing rolled out its most comprehensive financing program ever. The Harrisburg, Pa., distributor's Flex Credit offers 45-day interest-free terms up to $25,000 to solution providers that previously paid by credit card.

4. Vendors Relying More On The Channel
Enterprise vendors aren't the only ones looking to expand their distribution relationships. There are plenty of manufacturers looking to find new customers for their products as well.

For example, Trend Micro added Westcon Group to carry its security solutions because of the distributor's security expertise and a potentially all-new customer base, said Nancy Reynolds, director of channel sales at Trend Micro, Cupertino, Calif. "It's about creating new markets for our VAR community. And their VARs have a security practice. They're not just reselling the product," Reynolds said.

Panasonic Computer Solutions, Secaucus, N.J., authorized Tech Data and Synnex to sell its Toughbook PCs to VARs serving federal government customers. And Access Distribution, Westminster, Colo., took on Avaya's full product and Global Services offerings, its first foray into IP telephony.

"What prompted us to look for a third value-added distribution partner is we believe there are a lot of data VARs interested in getting into voice with the advent of convergence," said Ken Archer, vice president of North American channels at Avaya, Basking Ridge, N.J.

5. Partner-To-Partner Networks
Distributors helping solution providers partner with each other is not a new concept, but more distributors are taking the approach that if they help different sets of customers work together, everybody wins.

The Ingram Micro Service Network is perhaps the best known and most established peer-to-peer network, but it has new competition. Earlier this summer, Arrow launched a partner portal for its Enterprise Computing Solutions resellers.

"We will have deep profiles on core competencies, skills and applications they might sell. We now have a way for resellers to go into a private site to find the skill set they might be looking for," said Eric Williams, executive vice president of Arrow's IBM Group.

JENNIFER HAGENDORF FOLLETT and CRAIG ZARLEY contributed to this story.