From vendor to end-user, the platform based business model has relevance throughout the IT distribution channel.
Platform-based businesses have found major success in many industries, and now the IT distribution channel is seeing disruption from the new business model as well.
Here’s a brief look at the implications for all intermediaries within the distribution channel.
Vendors are beginning to require audited platforms through which to conduct these new distribution models.
As vendors increasingly shift to cloud-based models of operation, so they are also beginning to require audited platforms through which to conduct these new distribution models.
An example of such is Microsoft’s hugely successful CSP program, which has seen a high uptake by the channel on a global level. However, some of the annual CSP program costs can be burdensome for smaller distributors wishing to take advantage of the initiative, especially when combined with their own internal platform expense.
Some large global distributors may have the skills and resources to build their own platforms, making them a threat to the rest of the channel due to their scale and easy entry into new markets. However they still face considerable difficulties in making these platforms work, partly due to a need to develop, implement and maintain a highly flexible code base which needs constant evolution. As such, many large distributors are scanning the market, and seeking a cost-effective platform which meets their needs from a systems integration and operations perspective.
In addition, smaller distributors are struggling with the shift towards platform-based business models due to the same obstacles of high development and implementation costs, as well as a lack of certainty about where the market is heading, and the need to focus on cashflow.
Distributors are struggling with the shift towards platform-based business models due to obstacles like high development, implementation and maintenance costs.
Resellers face the same need to move onto a distribution platform as their upstream counterparts, but due to their position can be considered as a platform client, and tend to be limited by whichever platform their distributor may (or may not) be utilizing.
They are also facing pressure from end-user customers to have an online business touchpoint. As consumers become better educated, having such a digital portal is rapidly becoming a basic business requirement and end-customers are exerting pressure for such features. Resellers who cannot accommodate such demands, are risking their end-users going elsewhere.
As mentioned above, due to the ubiquity of information available online as well as being accustomed to external digital environments, end-users are far more product savvy and demanding than ever before. End-users now expect to engage on sophisticated platforms which allow them to learn, shop, buy and service their purchases online.