As-a-Service distribution - challenges, trends, future

As-a-Service distribution - challenges, trends, future

Before cloud computing, distributors in traditional IT sales channels managed logistics, credit, and the supply chain through value-added resellers (VARs) and along to end customers. These pick, pack and ship services had relevant benefits for vendors, as these looked for channel partners to help them manage the physical product's workflow.

Cloud and SaaS changed that completely with XaaS distribution relying on 20-30% fewer margins from every deal closed.

As as-a-service purchases become mainstream and cloud-based IT spending skyrockets, every distribution company became an IT company. But there is still a huge elephant in the room on how can distributors successfully transition to not just handle cloud software instead of hardware but to reinvent themselves as a 2.0 version of cloud distributors with real value-adds for the channel. 

2020 saw rapid digitization of customer experience, and tangible growth cloud platforms (e.g. Microsoft and Google) register in their quarterly revenues. 

  • elephancloud and services distribution struggles

Successful cloud and services distributors shifted their focus looking at the channel from a vendor's perspective to become immersed into the eyes of the market's innovator - the end-customer. The customer wants to receive value as it needs when it needs it but always fast, easy, transparent, and digital. 

Cloud and Services Distributors build ecosystems that deliver values originating from sources different than the vendor itself.

For a distributor to really build an ecosystem of partners, it needs to scale its network at least 10x. With the value laying for customers not in the product but in the outcome of the product, a distributors ecosystem should accommodate transacting as well as not-transacting partners. Estimates show that only around 20% of the channel will be made up from these transacting (licenses selling) resellers distributors know and have worked with before. The distribution channel should not only support but also enable the scaling segment of managed and professional services (non-transacting partners). With XaaS sales' small volume with low up-front revenue and direct sales growing faster than indirect, being sticky and valuable means everything. Recurring businesses aim to drive adoption, deeper integrations and constant upsell and cross-sell. The first transaction is a 30-day credit but guarantees for a sustainable future for the channel come from renewals and retention.

"This week, we have seen significant moves by IBM — a company that has led the patent race each year for 28 straight years. The epiphany finally hit its new CEO that the future of technology (AI, automation, internet of things, blockchain, quantum, etc.) is not SKU-able products that are sold through distribution but as embedded technologies inside other products, services, and solutions." - Jay MacBain in Are Distributors The Future Of Distribution?

evolution of the cloud and SaaS distribution channel

Digital Cloud Distribution Platform 

The next generation of digital distribution is platform-centric. With IT being not a department in the distributor's organization but becoming the heard of the business management and the means to scale operations in an as-a-service industry.

The AppXite Platform is an intuitive cloud platform for purchasing and management of private, public and hybrid cloud platforms. It provides a central, user-friendly interface where you can operate and maintain every facet of your as-a-service business while giving your sellers and customers the opportunity to experience a high level of independence with our self-service tools.


The AppXite Platform is one of the top global marketplace options for Indirect Providers and cloud distributors on their way to automate business tractions and partner channel.

AppXite Multi-Cloud & Multi-Vendor Distribution Platform supports every channel structure possible. Keep direct vendor agreements with strategic partners and enrich your catalog with solutions and managed services from other vendors without the hassle. Allow sellers to leverage direct contracts and add their own services as well.

AppXite's happy customers:

AppXite's customers