GTDC APJ Summit: Distributors aiming for greater success with vendor support
Distributors want to co-invest with vendors to drive long term growth, as it helps everyone be successful in the long run.
At the GTDC APJ Summit 2024 in Singapore recently, IT distributors called on vendors to continue to work and co-invest with them for greater success. The inaugural summit, which was attended by senior executives from the distributor and vendor community, signified the importance of building the relationship that continues to be misinterpreted often times.
In his keynote address, Frank Vitagliano, CEO of GTDC highlighted the importance for both the distributors and vendors to continue to build on their communication and commitment with each other, especially with growing opportunities and challenges around the world. Organizations will need guidance in their digital journey and while the tech partner community can help with this, statistics show that distributors play an important role in the entire process.
According to John Marrett, Global Financial Risk Director at the Economist Intelligence Unit, technical innovation is changing business and communities around the world, with Asia Pacific seeing a faster shift in policies and currency. Marrett believes that the inflation could ease in 2025 but there could also be an increase in transit costs, especially with new tariffs from the US shaping industry plans in 2025.
Meanwhile, Avneesh Saxena, Group Vice President, Domain Research Group at IDC Asia Pacific revealed that AI and GenAI spending in Asia Pacific will exceed US$110 billion by 2028. However, skills shortage and high set up costs for AI infrastructure as well as inflation remain key challenges in the region. Saxena also mentioned 80% of partners will reduce the number of vendor relationships to less than six. This is driven by the impact and influence of marketplaces, recurring revenue and AI.
Despite this, Saxena also revealed that partner and vendor engagement through distribution digital marketplaces will grow by 40% through 2025. This echos Vitagliano’s sentiments that distributors are now investing heavily in marketplaces as they are seeing the potential business opportunities on the horizon.
Given these changes, IT distributors are looking at how they can pivot their strategies and work with both partners and vendors to ensure they are capable of not just being successful in terms of profitability but also in delivering the right products and solutions.
The role of distributors
Vitagliano moderated a panel discussion with senior distribution executives, including William Ong from VST ECS; V.S. Hariharan from Redington Limited; Luis Lourenco from Ingram Micro; Jaideep Malhotra from TD SYNNEX; and Patrick Aronson from Westcon-Comstor. The panelists discussed how regional distributors are innovating and creating programs that facilitate the adoption of new technologies, optimize go-to-market strategies, and enhance other business activities.
According to Ong, the demand for IT consumption has increased over the last five years and this has also led to VST ECS’ role as a distributor increasing as well. Ong mentioned that they have extended their arms to vendors and are working on a lot of activities.
“We are doing presale and post-sale, services as well as tech support. As a distributor, we need to learn from each other, including the vendors. We also learn from the market to know what works and what doesn’t,” said Ong.
Redington’s Hariharan highlighted the while cloud and AI are important, mobility is another area that is experiencing double digit growth. He mentioned that Redington has balanced their portfolio to look at areas they can invest in.
“Software remains 10% to 12% of our business but we are still not doing enough. It’s an area we will look at in 2026 and beyond. Cloud and AI will also be an area we look at strongly, but our growth primarily will be focused on the geographies we are in,” explained Hariharan.
For Aronson, there is no other player in the ecosystem that can pivot and be as agile as the distributor.
“We don’t have many assets, but we have a lot of agility and can pivot. Hence, we constantly live on thin margines and constantly be on the lookout on how to pick up and move unlike partners and vendors. Distributors have survived and will continue to survive because of pivot capabilities,” said Aronson.
Meanwhile, Malhotra believes distributor roles have become all about reducing complexities, especially with the way tech is being consumed. He believes AI has huge opportunities but 90% of folks in the partner community will not know where to start. And this is where he believes the role of distributors will change over the next five years.
“We need to step up investment and help partners. We have learned when the market was focused on the cloud. You have to lead with practice building and enablement. Orchestration comes into pay. You need to work as an ecosystem to land, adopt and help partners get on with new technologies. Distribution has to step up and invest in partners. TD Synnex and Tech Data launched Destination AI. It enables myriads of partners to become aware. We help them get enabled through training, certification, pre and post sales. That is a big role of distributors,” explained Malhotra.
Interestingly, Lourenco believes that every industry is being platform redefined. Put simply, on one side there are vendors and on the other side are the partners and resellers that want distributors to help them grow and be profitable.
“If you look at Ingram and the platformization journey, we have been investing heavily. We have developed our own platform called Xvantage. It is the next level way for technology providers to transform business potential, discover new opportunities and reshape customer perception,” he said.
Distributors on hyperscalers and AI
Looking at hyperscalers, Malhotra stated that hyperscalers have had a profound impact on the industry. The hyperscalers are very pleased to be working with distributors and see them as a bridge to reach more customers and markets.
“This relationship has evolved is moving in the right direction. Looking at the stakeholders, everyone is settled that the future is going to be hybrid multi cloud. Given that, distributors are settled that the hyperscale motion is multi cloud. Within the ecosystem, vendors are thinking of how they can use that motion,” explained Malhotra.
He added, “to solve this complexity, the marketplace or platform is the answer. It allows ecosystem combinations to deliver the right experience from a consumption point. The marketplace is going to be important for hyperscalers. You are looking at different entities or personas touching solution, it will manifest in he marketplace. And the marketplace needs to be able to integrate services. Those that can do more services will have more touchpoints in the ecosystem.”
At the same time, Aronson also mentioned that hyperscaler solutions have been distributed by Westcon for some time.
“The fundamental concept of a hyperscaler is, don’t make money selling my solution. Make money selling your specialization wrapped around my solution. AWS and Google Cloud Platform are early on this. As a distributor, we need to do more to more services where we wrap solutions on these and put it out in the markets,” he said.
When it comes to AI, Ong stated that customers still don’t understand how to kickstart their AI journey. Ong feels that distributors need to showcase capabilities and AI testing centers where customers can come try out and embark on.
It's not easy and costly. We are excited with the AI journey. The future is good, and we hope that there will be more AI use cases and solutions that we can bring to the market. There are still solutions that we can’t imagine at this point in time. The key is to help customers and partners embark on this journey, be it for infrastructure of devices,” said Ong.
Malhotra echoed Ong’s views stating that 36% of partners have stated that they want to invest in AI and AI-ready solutions. He added that 82% have also said they have been involved in some kind of POC on AI. However, Malhotra also believes that despite the hype of AI, the future is still focused on cybersecurity, endpoint devices and infrastructures, that are strong in the region.
Given the need for investments and development to help partners deliver better to customer needs, all the panelists are also on the agreement that they will continue to invest for future growth. Additionally, they are willing to plough profits into future investments but also hope vendors will continue to invest in them as well. Distributors are also willing to co-invest with vendors to drive long term growth.
“We continue to invest for the future, but we need vendors to realize that for this to happen, we need to have funds to invest. We would like the vendors to continue to invest in distributors so that we call progress together and are happy to coinvest with vendors as well to drive long term growth,” the distributors said.