‘[IT distributors] were around during the period when partners moved from selling infrastructure hardware and endpoint device products into more of a services and SaaS environment, right? And they had to retrain their people to do that. They also experienced the transition from selling single-point solutions on a one-time basis to managed services or professional services. And so they understand this next transition, that it’s not going to be easy, but at least they understand it and they know that evolution is going to happen,’ says GTDC CEO Frank Vitagliano.
IT distributors are ready to meet new challenges channel partners are facing with the increased push to adopt AI and agentic AI and the emergence of a new class of partners dubbed “frontier partners,” said Frank Vitagliano, CEO of the Global Technology Distribution Council.
Vitagliano, longtime IT channel chief and currently CEO of the Global Technology Distribution Council, said these disruptive changes are having major implications for distributors, solution providers, and the broader technology channel.
Vitagliano, in an exclusive interview with CRN at last month’s GTDC Summit in Oceanside, Calif., said one of the most striking revelations from the event was the speed and scope of agentic AI adoption.
[Related: IT Distributors Warn Memory Shortages, Supply Chain Strains Impacting The Channel]
“The thing that just blew me away was this whole idea of agentic AI and the proliferation of agents that are going to be out there in the world, both at the customer level and everywhere else,” he said. “You heard it at the various discussions. But I was just blown away by the predictions of how quickly this thing is moving.”
Another major topic was the evolution of channel partners, particularly the rise of what Tiffani Bova, chief strategy and research officer at The Futurum Group, called “frontier partners,” which are characterized as “AI-first” entities with deep expertise in data management and deployment of artificial intelligence, Vitagliano said.
“Her discussion included a couple of key points, one of which was, normally the timeframe for those types of things that you see is three to five years” he said. “Her view was, it was more like 12 to 18 months, which was stunning to me how quickly it’s happening.”
Vitagliano also said IT distributors know that the industry must quickly adapt by leveraging AI internally and developing new offerings for solution providers. Distributors, known for their execution in a low-margin business, now face the challenge of deploying resources to help solution providers thrive in this evolving landscape.
There’s a lot happening in the IT distribution business that impact channel partners and their customers. To learn more, read CRN’s discussion with Vitagliano which has been lightly edited for clarity.
You’ve been doing this event for many years. What did you learn at this conference that you didn’t know before?
The thing that just blew me away was this whole idea of agentic AI and the proliferation of agents that are going to be out there in the world, both at the customer level and everywhere else. You heard it at the various discussions. But I was just blown away by the predictions of how quickly this thing is moving.
Second thing I learned was, I thought Tiffani’s discussion about frontier partners and this new type of channel partner that will be very important and very relevant in the marketplace was very well done. And I have a new appreciation of how quickly that’s going to come about. Her discussion included a couple of key points, one of which was, normally the timeframe for those types of things that you see is three to five years. Her view was, it was more like 12 to 18 months, which was stunning to me how quickly it’s happening.
And then the third thing, and this is one that’s kind of not new, but the magnitude of it is so significant that it’s just staggering. It seems like the never-ending investment that the hyperscalers are making in infrastructure products to support the buildout and the support capabilities of AI. The numbers are incredible, $650 billion up from $400 billion.
Let’s take a look at those three in terms of IT distribution. Agentic AI, it’s here, it’s growing fast. How does that impact IT distribution?
I think in a couple ways. One is, I think the IT distributors have to figure out how to deploy it internally, and figure out how to leverage it like any other big company, right? And what we’re talking about when we talk about the IT distributors, particularly in North America, is they’re big companies, right? That’s the first piece. The second piece is how can the distributors figure out how to develop offerings and services that can help their customers, the solution providers, live in this world that’s quickly coming into play. How can they do that? I think, through their own experiences and their own work of implementing it and developing it and deploying it will be one way. The second way will be through what they do very well, which is constant discussion with their customers around, what do you need? How can I help you? And how can I be of service? The distributors have significant resources. We know it’s a low-margin business that requires incredible execution, right? But with all that said, there are significant resources. And so I think the challenge will be, how can they deploy those resources in a way that can really supplement and augment what the solution providers have to do to become prevalent or to survive in this world that we’re leading into.
The second thing you mentioned was frontier partners. First of all, how do you define frontier partners? It may be different from Tiffani Bova’s (pictured above right) definition.
AI-first, if you will, partners that have sort of a, and I don’t know if I would necessarily use the word Ph.D.-level input, but certainly very skilled folks in understanding the data, understanding the uses and the deployments associated with AI and how they’re going to manage and leverage that. It’s not unlike when we used to talk about in the advent of born-in-the-cloud partners, right? These are folks that are very forward thinking, very educated, and very focused on understanding and deploying AI. I think they’re going to become very important and very relevant as we go forward. Now, do I think it’s going to happen overnight? No. Do I think 12 to 18 months is real versus the three to five years? Yeah, absolutely. I mean, it’s happening quickly. The interesting part of this discussion is, Tiffani met with a number of vendor executives in the GTDC Vendor Advisory Council, and they all bought into the conversation because, particularly the seasoned channel chiefs have experienced over the years the transition of their partners between the various stages. In other words, many of them were around during the period when partners moved from selling infrastructure hardware and endpoint device products into more of a services and SaaS environment, right? And they had to retrain their people to do that. They also experienced the transition from selling single-point solutions on a one-time basis to managed services or professional services. And so they understand this next transition, that it’s not going to be easy, but at least they understand it and they know that evolution is going to happen. So the good news is, in her report, Tiffani defined pretty well what a frontier partner is going to look like. I quickly described it, but she does a much better job of it. But it’s real, and I think it’s going to be needed, and I think it’s going to happen in a reasonably soon timeframe.
Do you think IT distributors are ready for it?
Oh yeah. I think the IT distributors will have a role in helping enable those frontier partners as it relates to them being able to get up and running and be capable. It ties right back into how can they help enable folks in the ecosystem in and around the IT space, and so absolutely, I think they’re going to have to do that, because I think there’s a lot of solution providers out there that don’t have the capital investment capability that’s going to be needed to hire the kind of resources that are going to be needed. And so distributors have to figure out a way, and are in the process of figuring out ways, to augment that. So absolutely, I think they’re going to play a big role, no question.
And the third thing you mentioned was the degree of AI support that channel partners are going to need. Do you think IT distribution is ready for that, or is it still a work in progress?
No, I think they’re ready. I mean, it’s all a work in progress, no question. It’s still part of the evolution. So I do think they are. I mean, look at what the distributors have been doing. In addition to running a very complex business at scale for a long time extraordinarily efficiently, which included all the basics, what I call the core competencies that they built a foundation on, they’ve now been making these investments in their platforms, and I think we are starting to see the results of that. …
The productivity enhancements that people are talking about will do nothing but help augment the investments that are required to get where we need to get to, because it’s just not going to happen by itself. I mean, it’s got to be a concerted focus on, how do I take it from where I am today to where I need to get to? What investments are required? Who can help along the way? The answer is, the distributors will help along the way, but there’s also investments that partners going to have to make, right? We’ve seen it before. And what I would tell you is, good or bad. I’ve seen it for a long period of time, and I’ve seen the partners transition from a number of things, and it will happen, right? Because it’ll have to happen. And the reason it’ll have to happen is end users demand it and require it, and therefore they’ll transform. The partners that won’t, probably it’s time for them not to be around anyway. But I don’t view that as a negative. I just view that as the normal evolution of providing support in a world where technology is just continuing to evolve.
Any other big takeaways from the event that you think people should know about?
I walked away with the sense that there’s a ton of opportunity. There’s a ton of opportunity, and it’s out there. The GDP growth forecast of somewhere in the 2.5-percent range [discussed by IDC], which everybody thought might be conservative, I think is very positive because typically IT spend is significantly higher than that. …
I think that you can either look at the evolving technology as something that scares the hell out of you—you just don’t know where it’s going, right—or something that gets you really excited because there’s so much opportunity there. Now it’s up to us to figure out, how do I capture that? And I tend to look at it in the latter way. I tend to look at it from a very optimistic standpoint. And everybody I talked to at the GTDC Summit is pretty optimistic. Now that’s not to say we won’t run into concerns along the way, bumps in the road. Memory shortages have clearly been discussed, and I think that’s going to be sorted out over time. But there’s just so much demand that you’re going to have to deal with it for a while. But overall, people are pretty positive, upbeat, and feel good about where we are and where we’re going. And from where I sit, that’s nothing but good.
