GTDC report: Distributors become critical link in scaling AI success

Frank Vitagliano, CEO of GTDC, explained that technology innovation is not only creating tremendous opportunities but also making go-to-market execution more complex.

As businesses continue to invest heavily in AI developments and deployments globally, vendors and partners are becoming increasingly challenged to meet the market demands independently. This is mainly because most of these demands require cross-platform integration, multi-vendor coordination, lifecycle support and operational consistency.

Given this scenario, there has been a shift in distribution, especially from a traditional channel intermediary into a strategic platform that help vendors and partners scale as well as increase support and overcome the complexities associated with integration.

These were among the findings from research conducted by Channelnomics in partnership with the Global Technology Distribution Council (GTDC). According to the research titled The Evolving Role of Distribution in Technology Go-To-Market Models, customer expectations are rising rapidly as organizations seek integrated outcomes across AI, cybersecurity, hybrid cloud, automation, analytics and managed services.

Over the past two years, the rise of AI has intrigued organizations around the world. While moving beyond proof-of-concepts remains a challenge for some organizations, the reality is that the bigger challenge is how can partners and vendors help organizations integrate the technology, especially for companies that are hoping to get the new use cases deployed.

The GTDC and Channelnomics report validates distribution’s position as the connective layer that closes these execution gaps. Through partner enablement, technical resources, financing, marketplace operations, compliance support, lifecycle management and ecosystem orchestration, distributors empower vendors and solution providers, allowing channel partners to deliver outcomes that no single organization can efficiently provide alone.

According to Frank Vitagliano, CEO of GTDC explained that technology innovation is not only creating tremendous opportunities but also making go-to-market execution more complex.

“Distributors have continued to invest in the platforms, programs, services and expertise needed to help vendors and partners bring AI, cloud, cybersecurity and other advanced solutions to market more efficiently. This research reinforces what we see every day across the IT ecosystem: distribution is becoming more valuable because it helps turn innovation into scalable execution,” Vitagliano said.

Meanwhile, Larry Walsh, CEO and Chief Analyst at Channelnomics said that customers are no longer buying isolated products or stand-alone services. Instead, they expect integrated outcomes delivered across increasingly complex ecosystems.

“That creates a gap between what clients need and what vendors or partners can consistently deliver on their own. Distribution overcomes those obstacles by aggregating the resources, capabilities and operational infrastructure required to execute at scale,” Walsh said.

Distributors closing the gap

Taking a deeper look at the report, the role of distributors are becoming increasingly important as they can raise execution capability to more than 80% across key go-to-market functions and motions. More vendors are also leveraging distribution strategically also improve operational efficiency, partner readiness, sales velocity, market reach, forecasting discipline and customer retention.

Updated partner programs by vendors have also indicated increasing reliance on distributors with specializations and certifications now focused on delivery and servicing customers and partners instead of just sales and renewals. Larger vendors are even allocating increasing funds for distributors that are capable of enabling customers to grow and complete their AI journey.

The report also revealed that distributors can enable up to 15%–52% cost savings and 4x–8.5x ROI for customers, especially since customers are more focused on getting outcomes consistently at scale.

Another interesting point from the report is that customer expectations exceed channel capability. For example, 76% of customers see multi-vendor systems support as a critical need, but only 22% believe IT partners have that capability. While 70% value AI integration, only 38% see sufficient expertise in this area.

As vendors need strategic distribution support, the top vendor priorities for them include demonstrable ROI and value visibility (88%), strategic GTM alignment (85%), and partner recruitment and enablement (83%).

For partners, as they need distribution to manage complexity, the top priority is ecosystem access, multi-vendor integration and solution bundling (91%), followed by AI-driven technical support (89%).

As such, distribution is becoming a force multiplier. In addition to helping vendors scale ecosystem selling, distributors reduce operational friction, support recurring revenue, expand reach and improve customer outcomes.

Distributors in APAC

Speaking to CRN Asia, Ananth Lazarus, Managing Director for GTDC APJ, commented that the trends highlighted in the global report are also visible in the APAC region. However, Lazarus pointed out that the augmentation and value proposition of distribution also goes beyond to managing the diversity in terms of market maturity, regulatory environments and partner capabilities. He explained that distribution is both an enhancer and moderator of capacity and execution across a highly fragmented region.

“The report speaks to the capacity and value that distribution delivers in existing and emerging categories. Akin to most scenarios, there are some distributors who are all in and have been early adopters, while others are getting there. The trendlines, point to distribution, being an imperative for bridging gaps and connecting ecosystems for the foreseeable future,” he said.

For Lazarus, distributors are the Ecosystem Orchestrators worldwide and in APAC. As such, he believes that distribution is the natural aggregation point, where partners source from multiple vendors through a single source.

“The issue is getting some vendors to recognize that this add-on value provided by distribution contributes to their success. And this has been our endeavor to educate and advocate for our distributors,” he said.