GTDC hoping to fortify distributor-vendor relationship in Asia Pacific
GTDC believes its presence in the region will continue to educate, advocate and influence the relationship between distributors and vendors.
The Global Technology Distribution Council (GTDC) for Asia Pacific held its inaugural meeting in Singapore. The meeting witnessed top executives from IT distribution and technology vendors come together to discuss the opportunities and challenges in the region as well as build on their commitment to each other.
Driving an estimated US$160 billion in annual worldwide sales of products, services and solutions through diverse business channels, IT distributors play a key role in the tech ecosystem, especially in bridging the relationship between vendors, partners and customers. GTDC, which represents the world’s leading tech distributors, believes its presence in the region will continue to educate, advocate and influence the relationship between distributors and vendors.
In a conversation with CRN Asia, Frank Vitagliano, CEO of GTDC believes as the tech industry continues to innovate, distributors will need to be prepared to deal with the changes, especially in what they offer. While hardware remains a core component in the industry, there is now a shift towards software and services, especially with demand for AI, cloud and cybersecurity increasing rapidly.
“The market has changed over the past four decades. Over time, increased requirements in the marketplace require constant education. The market has evolved from a hardware-centric to a combination of hardware, software, and services. In most regions, it's at least 50-50, and with the services and software growing faster than the hardware, it could surpass this ratio,” said Vitagliano.
As such, distributors would need to change their approach to remain relevant. Vitagliano explained that distributors are making significant investments in their platforms because it streamlines their business process. Apart from investing in platforms, distributors are also looking at the activities and services they will provide. This includes focusing more on services like skills enhancement, which could witness increased investments in the years to come.
Distributors would also be looking at how they can evolve their go-to-market partnerships. Currently, the partnerships are focused on vendors and solution providers (VARs, MSPs, SIs). But this can evolve uniquely whereby distributors can utilize each other’s platforms. This unique vendor distributor evolution doesn’t change the dynamic way they go to market.
Vitagliano also mentioned that consolidation in the industry would likely continue. However, he believes this is not bad for the marketplace. It allows distributors that choose to partner or be part of consolidation to bring value and become part of the organization without losing the regional approach they take, which in turn becomes a favorable situation. Vitagliano added that this may not occur much in North America but could definitely go on in Europe and Asia Pacific.
The vendor distributor relationship
“When you look at the marketplaces that are being created, every vendor has a marketplace, every hyperscaler has a marketplace, and the distributors have a marketplace. So what’s the difference and how do they all coexist? The distributor marketplaces are multi-vendor, and they're providing massive solutions aggregation that the others don't generally,” explained Vitagliano.
In the business environment, the average enterprise has a minimum of seven to nine vendor products that are included as part of a solution. However, putting them together is normally done by the distributor in an effective way. This is the part which Vitagliano feels needs to be constantly reinforced when educating the marketplace on what distributors are doing and how they are doing it.
“The distributors are extraordinarily close to both the vendors and customers. The customers here being the MSPs, system integrators, etc. Distributors are very close to the vendors because the vendors rely on them to help them get products to market and they’re also very close to their customers. The combination of those two inputs pretty much provides a really good view of what is needed in the marketplace,” added Vitagliano.
According to IDC, AI adoption is further fueling the region's technological momentum, with spending in this area expected to reach US$78 billion by 2027, with a 25% annual growth rate. Distributors empower those advances while transforming the customer experience and operational efficiencies across key sectors.
As industries make the transition into AI, accelerating requires skill enhancement. These kinds of services for enhancements, whether it’s through training, certification, or unique services that a distributor can provide, become really important. Distributors have a good understanding of what's required and that’s what Vitagliano believes dictates where they invest and how much they invest to a large degree.
GTDC in Asia Pacific
During the summit, GTDC also announced that VST ECS and Redington have joined the council in the region. Ananth Lazarus, Managing Director for APJ at GTDC commented that apart from mirroring what GTDC does in the US and Europe, the focus will be on educating and influencing the distributors in this part of the world as well as train vendors to appreciate and understand the role of distributors.
GTDC APJ has also established its vendor advisory council for the region, which is made up of 15 members. Lazurus believes this amount will grow in the future. At the same time, he also believes that some distributors that form the council in the US would be looking to expand their presence into the region in the future.
“It’s going to be interesting what the next couple of years bring. Given the attractiveness of the market and the growth rates that we’re seeing here, it would be natural for more of them wanting to come to this part of the world,” said Lazurus.