Tech distribution is morphing into a booming sector globally, and will continue to be a major component in the IT supply chain for many years, adding value to resellers and vendors, according to a comprehensive new study released today by The Global Technology Distribution Council (GTDC).
The report, Tech Distribution 2025 that considers three key building blocks of distribution: component and systems distribution, solutions distribution and digital distribution, reveals, IT distributors are becoming more interconnected and instrumental across diverse technology market segments, ascending to an increasingly vital role enabling multi-channel success.
Frank Vitagliano, appointed CEO of the GTDC said, “Of the key findings, we learned that the level of engagement and planning with distributors goes considerably deeper and broader than in past years.”
The report based on detailed surveys and interviews with more than 50 top industry executives across the various industry segments covered. Most study participants – nearly 69% – possessed over a decade of experience working with IT distributors. Those new to distribution also represented a sizable 10% of the respondents, and approximately 21% indicated between five and 10 years of distribution-related experience. Findings, as follows, are based on the study respondents’ projections for their distribution partnerships through the year 2025:
Here are some of the other findings of the study:
One significant finding is that 61% of survey participants reported that expected annual growth through distribution will be 10% or greater through 2025. Breaking that number down further, 42% of respondents expect to see business growth through distribution between 10% and 20%, while the remaining 19% expect to see business growth through distribution greater than 20%.
Companies have learned it was much more efficient and cost-effective to leverage distribution and their channel customers — especially in reaching and serving small or midsize businesses as well as larger enterprises in niche vertical markets, according to the report.
A second takeaway was that security, cloud (SaaS, IaaS, PaaS), AI/ML, big data/analytics, and IoT are areas where distributors have been making huge investments. The report shows that while emerging technologies are important, the core competencies that distribution has built over the years still remain significant. These are the things that the distributors have done really well over the years, and they still matter.
“The study confirms that many long-term distributor core services are still extremely relevant in the digital era. Distributor value is also on the rise. Corresponding business models and portfolios continue to evolve. Multi-vendor solutions are essential, and channel partners and vendors all want to work with distributors to deliver the products, solutions and specialized services consumers and businesses of all sizes need to thrive,” Vitagliano concluded.