The GTDC, which articulates the value of distribution to IT vendors, starts its most popular event tomorrow in San Francisco, in the midst of an expansion of their distribution members, and with the massive changes to the market meaning somewhat surprising good news for a very old product category, as well as for smaller VARs.

This week the Global Technology Distribution Council meets in San Francisco for their GTDC Summit, a two-day event starting tomorrow which is the most popular one on their calendar. It’s been a big year for the organization, which advocates for the value of distribution to the IT vendor community. They recently added three new distribution members, with more on the way. They also are emphasizing the positive trends for distribution in the marketplace, which has some counter-intuitive elements to it.

The GTDC was formed in 1998. Tim Curran, the CEO, has been at the organization since 2002, and was a Senior VP at Tech Data before that, after starting out his career at Panasonic, building up their channel sales business, back at a time when Panasonic’s channel was focused on the printer business – dot matrix printers.

“Our mandate is to promote the value of technology distribution to the vendor community, articulating the value of distribution,” Curran said. “It is to get the vendors to understand better what the distributors do and how they can better leverage them. We aren’t a lobby group, talking to governments, and spending a lot of money to do so. We aren’t a buying organization. It’s all about communicating the value to IT vendors.”

That task is always critical because the vendor community is not just the usual collection of well-known suspects, but is constantly increasing.

“In the last 24 months alone, over 500 new vendors have joined the IT distribution community,” Curran said. “There is lots of innovation in the market, and lots of opportunity to help these new vendors understand how a distributor can help them reach the market more efficiently. Vendor attendance at the GTDC Summit is growing. At the event this week, we have over 70 different IT vendors attending.

“The messaging around the GTDC Summit is how much distribution has changed from the days of pick, pack and ship,” Curran added. “Software is now the second largest category. Our key message to vendors is that the market has become all about the capability of integrating multi-vendor solutions – and you need a distributor to help you do that and offer the total solution to the end user.”

That’s really the key to distribution’s value today Curran stressed – not in just getting a product to market but getting it to market as part of a total multi-vendor solution.

“A study a couple years ago using SG&A data from vendors showed distribution was a lower cost route to market. If a vendor wants to be integrated into a multi-vendor solution, distribution can do it more effectively than building your own infrastructure.”

Curran also stressed that the technology market has become more dynamic than ever, and that this places a premium on distribution.

“Rapid transformation, including the rise of MSP and SaaS, make it better to work with a distributor and lower fixed costs,” he stated. “The idea that distributors would be disintermediated by the cloud was always a silly one. The lower fixed costs come because when you work with a distributor, it’s a variable expense, because you aren’t saddled with warehouse or a call centre. You can deliver it a. total solution as a variable expense.”

A key element in all the GTDC’s work is their database of distributor data, which includes all their collective sales-out statistics.

“We set up the database using the sales-out data that the distributors contribute, to better organize them,” Curran said. “It’s all masked, so a distributor can’t see information from a specific competitor. However, it does provide an excellent way that they can measure their own market share against the total, see trends and assess their performance. NPD assesses this for us in Canada.”

The GTDC membership is limited to companies who have minimum sales in the U.S. of 1 billion dollars, with the number being less in Europe.

“We want to bring together distributors with common issues and concerns, and while there are a lot of little distributors, they don’t have much in common with organizations like Ingram Micro,” Curran noted. “They wouldn’t have much to talk about over lunch. Within our membership criteria, all the distributors in North America are members.” They are also strong in Europe, and are starting to expand into Asia.

They just announced the addition of three new distributor members, bringing the total roster of distributors to 24, with over $150 billion in annual revenue. Two of the new additions  – Siewert & Kau and CMS Distribution – operate outside North America, principally in Europe, although CMS also has a presence in China.

The third, Hunt Valley MD-based TESSCO Technologies, is well-known in North America. They are a wireless-focused distributor with a strong presence in Canada as well as the U.S, supplying more than 50,000 products from 400 manufacturers in mobile communications, Wi-Fi and the Internet of Things. TESSCO’s president and CEO is Murray Wright, who has had a long career at Tech Data and Ingram Micro, including multiple positions in Canada, and who also ran Lenovo Canada for a time.

“A couple of additional distributors will also be admitted at our upcoming board meeting,” Curran said. “A new part of our website gives information to organizations who want to know more about distribution as well.”

Curran also emphasized that in both the Canadian and American markets, two somewhat counterintuitive trends stand out – the strength of the PC market, and the importance of the small VAR as part of the overall go-to-market.

“PC sales are booming right now,” Curran said, noting that computers represent the largest category by far of goods sold through distribution, and that the increase of $178 million over year-ago sales makes up the lion’s share of a $191 million overall increase, in a year where a slight majority of categories were in the red.

“It really is amazing growth,” he stated. “We were told years ago that the PC is dead, but it really is a necessary platform. The PC industry has innovated and added new strength. I’m amazed at the growth through distribution, up more than 15 per cent in the U.S. and Canada.”

Small VARs are defined as having less than $100 million annual sales in the U.S., and less than $25 million annual sales in Canada. The GTDC database based on the distributor sale data captures the size of this market, which is more than double each of the Large VAR category, and Direct Marketers/National Integrator categories, which are second and third in size. Office Product Dealers, eCommerce, Internet Service Providers, OEMs and Government Integrators are much further back, again, referring only to sales through distribution.

“There’s an increasing number of small VARs because the market is dynamic, with many people who get laid off starting small shops,” Curran said. “It’s churn, but it’s good churn. It’s all good change.”