Some vendors don’t want to spread themselves too thin when it comes to distribution.
The latest case in point is a company called NTP Software, which is making its first foray into the channel with an exclusive distribution agreement. Rather than signing on a number of disties, it’s only signing one.
NTP is in the enterprise storage software business and it has come up with a technology called storage firewalling, which controls what goes into the storage environment through policies that monitor the passage of data into a user’s network. This goes beyond virus protection, the vendor says, to offer better control over unstructured data.
So it turned to Arrow ECS, a distie that focuses specifically on enterprise storage. This gives NTP access to Arrow’s NetApp reseller partners (since NTP’s products are designed to work with NetApp hardware). Arrow, for its part, represents more than 75 hardware, software and storage suppliers.
For vendors that don’t want to turn their products – or services, for that matter – into commodites, choosing one or two distribution partners makes sense (whether it’s a niche distie or a broadliner with a relevant specialized business unit).
Because storage firewalling is a new and novel concept, it makes sense to target storage resellers through Arrow, which will initially make the product available to its NetApp partners in North America (particularly those with mid-market customers).
(The distie has also launched a “partner enablement program” to support the launch of NetApp’s new FAS2000 product line.)
There are myriad factors for a vendor to consider when coming up with a distribution approach, from size of the market to the requirements of channel partners.
In this type of exclusive distribution arrangement, it means partners receive a high level of support – but to be successful, those partners have to be dedicated to selling that vendor’s products. And this can really only work where the margin is high enough to entice partners. This strategy can also limit the size of potential market growth.
But, for partners that want to pursue high-growth areas, specialization is key. The more partners, the more competition, the more likely that margins will be driven down.
Still, distributing through a whole slew of disties is sometimes the best approach, especially for commodity products sold to myriad resellers in myriad industries. This usually happens anyway as newer technologies turn into commodities over the years. Which, ultimately, means distribution strategies should be flexible enough to keep pace with change.