Frank Vitagliano tells CPI that it can't just be business as usual for the world's distributors
The Global Technology Distribution Council (GTDC) has called on distributors to invest more into monetising IoT, AI and machine learning.
The US-based body says its members account for more than £150bn of the global distributor market.
Its CEO Frank Vitagliano told CPI that distributors should dip into their own pockets to provide more enablement for MSPs and resellers, in order to support a more "tangible" move into emerging technologies.
"One of the things that's happening right now in the marketplace is all the solution providers are trying to figure out how to monetise the emerging technology areas," he said.
"Cloud is done. That's now been monetised as a hybrid market. But we really haven't monetised IoT, we really haven't monetised AI and machine learning."
Vitagliano said that this demand is being led by customers who are asking MSPs for more bleeding edge services.
His view is that distributors should take the opportunity to adapt faster to become a stronger "virtual distribution resource".
"I think that's emerging as a big trend, and you're going to see more and more of it."
Vitagliano is seven months into his role as the head of the GTDC.
But he's an industry veteran having been a channel SVP with IBM, Juniper Networks and Dell, as well as the CEO of a Texas-based service provider, Computex Technology Solutions.
When it comes to distributors making investments into emerging technology, he conceded that it's still "very early on in the game".
However, he claims that his channel experience has taught him that using distributors as a resource pays dividends for partners who do want to chase new market opportunities.
"When I was a solution provider, we had a pretty good managed services business. But I was still trying to figure out how I could go to market to invest in IoT or AI or even some advanced security areas as I was trying to become an MSSP.
"So I went and worked with one of my distributor partners, and was able to use their balance sheet to make some investments that I wasn't able to get from anywhere else.
"And that's what some of our distributors now are doing. They have put financial programmes in place, where they'll come in, and based on the recurring revenue model that the MSP has, they'll figure out a way to partner from a financial standpoint and use their balance sheet to help those partners with investments."
Vitagliano argues that this move will help distributors tackle the perennial issue of lower margins while also becoming more relevant to their partners, and stave off the threat of becoming "disintermediated".
When it comes to distributors more traditional fare - hardware - Vitagliano said that some of his members are feeling under pressure, particularly in Europe, where growth has slowed to a greater extent than "a more robust North America market".
His comments come three months after ScanSource's CEO told CPI that he was exiting the hardware market across all of its European operations.
"As more and more data and storage is moving to the cloud, there's clearly less demand for that [hardware].
"However, it's still a huge, huge part of the market.
"Even though the growth is slowing the growth numbers are still pretty significant and will remain pretty significant in the long-term standpoint. That isn't going away."
"I think distributors are realising that they'll have to morph their business and they'll have to make their transitions to become more relevant or to their customers.
"And I think they're doing that. In the end, you can't block industry trends. What you can do is try to get ahead of them, and make the investments in areas where you know you'll continue to be relevant."