The 3-Step Approach to Digital Transformation for IT Distributors
The era of the anything-as-a-service (XaaS) economy has sparked groundbreaking transformation in the way technology is procured and sold. As a result, distributors are going digital. Enterprise clients prefer subscription-based contracts for their IT and technology services, and consumption-based business models have been steadily gaining ground across the entire enterprise tech stack. For example, infrastructure-as-a-service (IaaS) or hardware-as-a-service (HWaaS) solutions are increasingly common.
The exponential proliferation of the XaaS economy presents distributors with an incredible opportunity to diversify current business models with new digital services sold on a subscription basis. This transformative growth potential is creating a new breed of hybrid distributors who are complementing traditional transactional services with products and services sold by consumption. In fact, their current role as providers of hardware for infrastructure, enterprise applications and workplaces means distributors are primed for success – if they can master cloud sales.
The pathway to new cloud sales can be complex, but it can be achieved with a new approach in three successive stages.
1) Create or expand a digital solutions catalog
The anything-as-a-service (XaaS) economy demands the latest solutions. These increasingly come in the form of ‘bytes’ rather than boxes. To excel in the delivery of digital products, distributors will first require a comprehensive digital solutions catalog.
Some distributors may already have a product catalog, and others are yet to begin. Either way, the ability to offer a broad range of solutions is key to progress. As such, integrating vendors on a case-by-case basis risks slowing time-to-revenue and impacting the pace of growth. Equally, manual processes related to order fulfillment, billing and delivery create operational roadblocks that are avoidable given the cutting-edge capabilities that cloud delivery platforms can provide.
The popularity and variety of software-as-a-service (SaaS) and infrastructure-as-a-service (IaaS) solutions – such as those offered by Microsoft and Azure – offer an ideal starting point and will create a robust foundation for any digital product catalog. Whether in the initial stages of creation or looking to diversify the solution offering further, CloudBlue’s product catalog offers access to the latest solutions from over 200 market-leading vendors to help distributors build a competitive catalog without delay. Distributors can also gain a significant early advantage via CloudBlue’s automated ordering and fulfillment solutions that reduce reliance on manual processes and help to boost operational efficiency.
2) Create a XaaS marketplace
With an active catalog and new recurring revenue streams in play, it’s time for distributors to move into stage two and create their own XaaS marketplace in order to streamline procurement, fulfillment and billing processes with resellers and partners.
Distributors are well accustomed to the impact of steep operating costs on final margins, therefore XaaS marketplaces are likely to be particularly attractive given their ability to offer hyperscale growth. After an initial investment, XaaS marketplaces allow distributors to expand their market reach – and revenue potential – almost exponentially, without creating a comparable increase to overheads.
The opportunity is clear. More than 70% of the channel’s resale revenue is sourced through distributors, with the volume capabilities and value-add opportunities that channel distributors bring to the table being invaluable to short-term and long-term channel success. That said, these attractive gains will only come to fruition when distributors prioritize end-to-end automation. With the right automation technologies in place, distributors will ensure their XaaS marketplace is primed to scale and is able to service a higher number of contracts, maintain business standards and ensure operational costs remain manageable.
3) Expand through channel partners
Finally, through a powerful commerce engine, distributors can enable their partners and resellers by creating their own branded storefronts. Distributors can publish a custom catalog with their own services and bundles in multiple languages, currencies and billing models and offer their resellers the ability to operate in any language or currency.
Once the basic foundations and digital solution marketplace are established, distributors can look to develop a robust ecosystem of specialized channel partners. In this way, they can unlock the ability to offer the latest hybrid cloud services, such as networking, productivity, or cybersecurity solutions to curate different listings according to the reseller location and truly respond to their local market requirements.
Transform business operations and create new cloud revenue
With CloudBlue, distributors can grow their cloud catalog, build marketplaces and expand into new service-driven business opportunities. For more insights, check out the latest whitepaper – From Boxes To Bytes: Why IT Distributors Are Transforming into Enterprise Cloud Providers.