Rethinking The Distribution in The As-a-Service Industry

Why is the shift from vendor-centric to customer-centric distribution disruptive but won't be destructive for distributors? 



What Are Distribution Ecosystems?

The Old-school Distribution Models Are Holding You Back

The next-generation distribution channels of the future are ecosystems distributing products other than just vendor products. 

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.

Learn more about the distribution ecosystems in the e-book!

next-gen channel ecosystem

Jay McBain

Principal Analyst - Channels, Partnerships & Ecosystems - Forrester

To be relevant in the new world of digital natives, subscription models, and direct-to-consumer businesses, distributors with deep industry expertise must reorganize themselves to aggregate, facilitate, and orchestrate ecosystems of value creation. The move from transactional technology sales to nonlinear ecosystems is measurable value creation for the customer, leveraging network effects, incubation, and co-innovation. This is a new celestial approach in which millions of partners, products, and customers are moving through the universe, and smart distributors must be able to predict (and monetize) when the stars are going to align.


Digitization of the Distribution Sector

The fundamental change in any distributor’s digital transformation is a mindset shift from whom distributors were thinking about before to whom should they think about now.

vendor centric distribution

Vendor-Centric Distribution

Vendors are no longer the only "beginning" of the distribution chain

customer group

Customer-Centric Distribution

Customers are the inspiration and the force behind the digital transformation

platform integrations

Platform-Centric Distribution

A new type of cloud infrastructure replaces the physical warehouse

The Industry is Already Changing

The question is not If but When

Distributors should accept 5 things as given already (nevermind the brief momentum their hardware distribution had at the beginning of the pandemic):

•   the total industry revenue will be higher for software than hardware;
•   more and more software will be cloud-based vs on-premise;
•   most of the software will be subscription- and consumption-based.
•   70% of the current distributor’s channel will have unrecognizable business models in 5 years.
•   the indirect sales revenue is growing not as fast as the direct and some newer vendors are even avoiding the indirect channel with new GTM strategies.

Find out how to combat the changes in the e-book.

digital distribution vs traditional distribution