Tech Distributors Versus Telcos: Competing When They Should Be Collaborating

While working on my recently published report, The Cloud-Driven Evolution Of Asian Tech Distributors, the tech vendors and distributors I interviewed drew parallels between telcos and tech distributors, both of which sell cloud-based solutions. However, during further discussion, the friction and competitiveness between the two quickly became apparent. So why should they compete when they can exploit each other’s resources and pursue joint go-to-market initiatives? By partnering, each can focus on doing what it does best to meet customer needs.

Telcos’ reach, ready infrastructure and existing customer bases provide a solid cloud foundation:

  • Back-end infrastructure. Telcos’ robust network and data center infrastructure is critical to setting up and delivering cloud-based services swiftly and without massive additional investment. Moreover, their businesses are well-suited to annuity models.
  • An existing base of enterprise customers. Although telcos aren’t considered a strategic enterprise provider in most instances, their access to a large base of qualified enterprise accounts and existing relationships potentially provides a very good foundation for cloud solution sales.

And distributors’ access to partner networks with strong customer-fronting skills and knowledge is exactly what telcos lack:

  • Large reseller networks and end user touch. Tech distributors’ large network of resellers can help telcos reach out to customers quickly and more efficiently. These resellers understand the needs and business challenges of enterprise/SMB customers and can act as a credible trusted advisor.
  • An understanding of legacy IT infrastructure. Distributors and their partners typically have a good grasp of their customers’ legacy IT infrastructure and can help them customize and integrate cloud solutions in a more tailored and effective way. 

Distributors, along with their partner networks, could easily augment telco cloud offerings through value-added services such as enhancing technical competencies in presales, solution design, tech support, technology and configuration centers, systems integration, customization, and training.

Viewing one another as competitors in the crowded cloud solutions landscape is myopic. By throwing these perceptions aside and considering partnerships to strengthen their respective offerings, telcos and distributors could unleash a far stronger overall solution.