Arrow has been flirting with the midmarket for some time now, and it’s finally made a bold move — but will that pit the specialty distie up against the broadliners?
As we see more niche distributors target this market — and broadliners Tech Data and Ingram Micro offering more specialized business units — the lines start to blur between value and volume. So disties may have to work harder at marketing the differentiation they provide.
The midmarket offers up potential for new opportunities, but it’s elusive, and it’s been challenging to reach for vendors and their channel partners. That’s why distribution is playing such a key role here.
Joining its broadline competitors, Arrow is betting its cards on the midmarket, and interestingly, it’s investing its own money to create the business unit rather than relying on money from vendors.
This was also the motivation behind negotiations in February to buy rival European distributor Logix, which is a mid-range storage, server and software distributor. Not only will this extend its reach into the European market, it will boost its virtualization and infrastructure portfolio.
Now, with the launch of a business group dedicated to building a channel for solution providers and VARs to expand their reach into the midmarket, the distie is offering solutions customized for midmarket companies, as well as data analytics to help target prospects.
The idea is to provide “repeatable” processes to solution providers and VARs to help them make more money.
Initially, Arrow will focus on security, storage and virtualization, with an emphasis on the health care, financial services, manufacturing and professional services markets.
Of course, security, storage and virtualization are also areas of focus for broadline distributors. This means VARs will have a choice when it comes to their distribution relationship. How much support do they want directly from their distribution partner? Or are financing options more important?
The midmarket, right now, is hot, and there’s potential for new business opportunities. But vendors aren’t always able to reach it. And resellers may not have the resources they need to target it effectively. That’s why distribution has become so important here.
Tech Data and Ingram Micro have already been targeting the midmarket and have an established base of reseller customers. They also have some strong financing options. It seems Arrow will be pitting itself directly against the broadliners, except it’s doing things on its own rather than relying on vendors.
The specialty distie must see the potential of its business model if it’s willing to take on that kind of risk. For VARs, it could be a different approach to the somewhat elusive midmarket.