B2B Revenue Acceleration
B2B Revenue Acceleration

Episode · 3 years ago

2: The Differences between the distribution model in North America and Europe w/ Barrie Desmond

ABOUT THIS EPISODE

There has to be a US appetite for change in the distribution model. The cyber security & cloud transformation market is incredibly complicated. Hiring an agency to act as a proxy might be something that a company is far more likely to consider given the volatility of the market.

Maybe we can help the exist inUS vendors with some pain points that they have in their go to market strategyby doing some more services aligned to logistics. You're listening to BB revenue acceleration,a podcast dedicated helping software executives stay on the cutting edge of sales andmarketing in their industry. Let's get into the show now. You welcome tobe to be riven your acceleration. My name is audiamutier and I am heretoday with buried this month from it's crusive networks. How are you today?Very fantastic. Good so bory. We are here today to talk about thedifferences between the distribution model enough American in Europe. But before we dive intothe details, human just giving us a little bit of background. US toyour role. Wisinus creusive networks, as well as it's crusive network as anorganization, and what you guess is yeah, so thanks for having me on thepodcast. By the way, I'm set at the group level, soI've got global responsibility as the CEO for primarily all the organic growth aspects ofthe business, which is primarily the P of sales, services and marketing andbusiness development. So that stretches everywhere, from New Zealand all the way overto the US, to San Jose and lots of play. This is inbetween good so quite the way geography could coverage and in time of his clusivenetwork, could you just give us in a few words, you know,the get the mission of his cusive networks, where your clients have chosen your gates. Mission is to disrupt traditional distribution in the technology sector. We've grownprimarily from a European base, in fact, with the only European headquartered global distributionbusiness. And over the years we've decided, because I guess I geographiclocation from the US, is that we've...

...put together very value base distribution service, if you like, for vendors who are on an expansion strategy. Somany vendors seem to establish a footle in their home market. And again,the majority of our vendors are US base, but when they look at the challengeswhich they face when they're expanding globally, they need a partner which understands theintricacies and the nuances of each smaller region, which you know, primarilythe multicultural, multilingual business behavioral differences that exist in Europe. The trade inmentality and passion that exists in the Middle East to obviously the same is trueas we go from India are and stretch all the way through, primarily forour southern Asian back to the Antipodeans in Australia and New Zealand. Boosting andexpanding a company out of your native domestic market as got a list of challengeswhich really limits the scope of the business trying to expand unless they have aheart of like us who can act as them that can provide a whole loadof value based services like pre sales engineering, availability of Demo Care, go tomarket plans, launch plans, sales need detection plans and then whole rangeof professional post sales services like chaining and education, premium services like on sitesupport. For our on site support in Borneo is a lot different to supplyingfor our on site support in Philadelphia. So that just gives you a flavorhow we act as a proxy for vendors as they begin to go on theirglobal adventure. That's very interest. I mean the Shure of expending geographically andgoing out of shore. I would say...

...domestic market is is something that wewe know really well at operatics week we've been able being mini customers and andEurope is a tricky territory were the French like to thin at they are differentfrom the German, the German are different from the English, except t etc. As you are right, the culture of the mentality. And then youopen up to a Middle East and up appreciate that having that bunch of servicesthat you can offer being the extension of your clients, cells and marketing team. I guess in some extent induse regions as well as potentially taking all thecontract and currency and all the US are bits and pieces I'm sure you getinvolved in, is definitely taking a bigger take away from from from the tableon the side. So I mean that's kind of leading me quite well tothe subject of the of the podcast to day. One of my main questionto you, which is a big, wide open question, but I thinkit's considering your global coverage and and your experience of the distribution model across theregion and the fire that today we really want to focus between North America andEurope. From your perspective, what would you high light as the main differencesbetween the distribution model in North America and in Europe? Okay, it's agood question and something that we are aiming to change in the common years orthe comming months, in that, as as we've expanded ourselves geographically and establisheda base in North America, the stand as a very different models. Infact, you know, there's a high sort of link between or correlation betweenthe Geo in which you based and the further away that you go, themore value base services that you want to buy off our menu. So aswe parachute into the US with an office in San Jose and were in Tampa, in Florida and various sales people based around North America, we're beginning toreally understand and digest that. You know, distribution in the US is historically beingdifferent to the model in which we've...

...delivered in the geos around the world, and it goes back to the, I guess, the legacy way inwhich new technology businesses, primarily in Cyber Security and kyle transformation, which isthe two markets and which we specialize, have evolved. You know, veryoften you launch a business and then you establish a national sales force covering allthe territories in the US, which is a big area of land covering manyrural and many huge metropolises and to maintain, you know, control of your owndestiny. You've gone for a very direct at high touch sales models whereyou employed direct touch sales guys who sell direct to end users and enterprise organizations. Once they get momentum going, they've historically then decided that they've act workwith somewhat we called t one partners, which are some integrators, or resellers, or divars as they call them in the state, as a way offulfilling some of the contracts. Sometimes they go direct and a lot of timethe customer will push them towards their it solutions provider, if you like,and then they build up a whole raft of intermediaries known as the resellers,or tier ones as we call them, and they get defocused from their corebusiness, which is, of course, the growth and success of selling theirsolutions. So they say, well, actually now after retrofit in distribution,to take away some of the basic principles of running a channel to market,which is availability of stock, having the right mix and availability, have theright logistics in place. In the US they have a saying about being distributionshould be in a credit shield so they're being able to build, collect andmanage the whole credit worthiness of their channel and so to pay the vendor ontime, so they don't have to invest in a whole range of resources todo that quote, you know, delivering...

...quotations in a timely manner, youknow, within a couple of hours, and being accurate, you know,being over night nine point five percent accurd. This is what they think is therole of distribution in North America and some of the biggest global names thatwere all familiar with have established their businesses in North America and really and whatis a fulfilment transactional distribution model, which for us is just one of ourservices. They've primarily base their business on that model and that's how it differsfrom our model, because the value, you know, the availability of resourcesto do Presales, consulting, professional services, demonstrations, to do the market intodo the sales lead totection they've done historically themselves. So those sort ofservices, the go to market services, the engineering services, the education services, the enablement services, the support services, the premium services, they've really hadno need for them in channel from a distribution perspective in the USA andthat's something that we hoping to challenge and to disrupt. Okay, so youfound US somewhere. What we tooking about? Chase, I guess what I wouldcall value eddy distribution, he said, in services, is being practive,potentially even sometimes helping earlier stage vendors to built the market. Is thatcorrect? Yeah, I think you know, there are two. You know,we've got to find the pain point for the North American venders, ifyou like, already. So the established ones, we can say to them, well, what is your paying point in managing the channel? You know, where do you think you're missing and where do you think we can help? And my guess already is that they go after the big elephant. TheUS economy, compared to Europe, in fact, is is huge, andmidsize reseller in Europe could be anywhere between...

...fifteen and thirty million euros, ortwo thousand two forty million dollars, and midsize reseller in the US would bein their hundreds of millions of dollars turnover. So and the companies that normally consumenew technology early, the early adopters, if you like, in fact thosebig enterprises. So my sense is maybe they need some help with themid market or commercial where we can go and avail all that channel to theservices that we've traditionally given in Europe. So that's my sense, is thatwhat can we do for you guys there in the mid market? The perhapsthe big distubidest can't do because their cost of sale is so low and theirfocus is on streamlining and a very thin margin business. So we're sort ofsame. Well, maybe we can help the exist in US vendors with somepain points that they have in their go to market strategy by doing some moreservices aligned to logistics. So our global footprint, for instance, and ourability to deliver into a over a hundred and sixty seven countries, we thinkmaybe interest into them so that they can have one contact through a global dealdesk capability and deliver into multiple countries and territories in a very light touch way. We could do reverse logistics, we could do disposals, right, sowe can begin to add value in terms of those services. But then wecan begin to do training, we can begin to do presales, we coulddo premium based services and hopefully we can help them launch new technologies or newversions or modules of their technologies into this space, so to address a sectorof the market which they probably feel that they're under represented. instily, wecan say two new start ups from the...

US, why go disrupting the technologymarket? Why didn't you disrupt the way in which you go to market?So, instead of taking that traditional slow route, why don't we light upthe channel first in the US and found find those early adopt the partners likewe have in Europe and Asia and Middle Eastern so forth? Why don't weask them to help you scale and accelerate your go to market? So we'rehaving some very interesting conversations there and of course then we can avail those newstart to our full range of services and they can then obviously concentrate and investin the R and D component of the technology as opposed to the commercial deliveryof that. Of course they're going to have to have sales, pre salesengineering services for the US market initially, but maybe instead of adding forty teamsof sales and pre sales guys doted all around every state or major metropolis ormarket in the US, maybe they can cut that by half and then focusonly able in the channel so that we can scale and accelerate their go tomarket. Yeah, I think that that makes perfect sense. Mean from ourperspective to gain, we're not as involved as you are in the channel andthe distribution model ourselves, but we've gone many time vendors telling us about thecost of ticket. Fine try and working with a big distry. So theyneed to reach that critical size, which sometimes very difficult to reach a criticalsize because, as you mentioned, you need to reduce steps of having theteam, your own team in region, and that scalability can be can bequite complex, I guess. So the ll make sense to me and Isee I see a great opportunity for you guys, defrom, perfectly honest.That's I've got a question for you more on the Reseller, because I wouldhave thought that if the distribution models as evolved in that way, in thatI yes, less flixible, less value...

...add more fulfillment type of role,would you need to go through some sort of a transformation also of the sognelayout, which would be the resellers behind that? You see you have youalready engage with the Strossilla. Do you see an apetite just rest all thesame passion in the Samer Petite as you guys are in Dome of creating thedemon from your clients or for your clients. Are Driving almost the flagship of yourclients, weening Neu customerls on the help of your clients. Do yousee already attraction from from the rest of themselves? I think that's the questionreally for us is what is the appetite for that the reseller layout in theUS to change and to accept this different type of model? I mean,I think this it's a very competitive market. I mean we're in Cyber Security andcloud transformation. I think the market is very complicated. Both markets selffrom a lack of resource and skill sets. So maybe as acting as a proxyfor them is a proposition that they care much more willing to consider thesedays, because it's historically, I think, they've been there as a fulfillment partas well, certainly either big what I called megavars or divars who haverelied on their purchase and supply agreements with the big enterprises just to be aconduit or a channel to market for these vendors. So going in there andtrying to provide a value based proposition may not be appropriate or relevant, butcertainly in the next lay it down in the regionals and the verticals and thespecialists. You know, it's just they cannot, like many end customers,keep up with the speed and change of technology and I think that's a gapin which we can fill and act as a proxy for the Vendor in Scaling, educating, on boarding these resellers as a proxy for them before they decideright, this is the technology I'm going...

...to work you know, so investing, so do the on boarding, but also work with companies like operatics todo the direct touch, to find sales needs and opportunities, to do theconvincing. With one of our guys, Lauren, who runs it was theking of Europe or the King of Mediterranean. He always says to sell to convince, we go direct, to sell, to supply, to invoice, wego in direct. So I think we've got a certain amount of evangelizingourselves. So it's not only evangelizing the technology and the new innovation and thenew vendors in that respect, but it's also evangelizing the model and getting acceptance. Solve that and I think we've got a damn good choice chance because there'sa perfect storm of complexity coming together and what we're offering is simplexity, simplifyingwhat is a convert complex technology ecosystem at the moment where, from a cybersecuritiesperspective, the velocity, the variation of attacks and threats and spiraling out ofcontrol, there are regulatory and compliance issues which are becoming more critical and moreenforceable. Then you have the number, just the fewer number of technologies orsecurity tools people have to put into infrastructure. Ask, you know, make incteos and SISO's question whether they should go best of breed or the complex, as he is leading them to complacency, where they would, you know,say, well, go to IBM or another generalist, I t supplierdeliver what, quite frankly, would be inferious solutions. And the fourth partof the perfect storm, of course, is the skills. Get their overmillion security side of a security vacacies in...

...the US alone, two million worldwide. So I think the time is right for this provocative model where we canconvince the channel in the USA that maybe there's a different way. I've reallyenjoyed the conversation today, Barry. So we coming to the end, butfrom a perspective of I did call you early own value, a distributor orsomeone trying to bring value a distribution to the US market. But it almostsounds like a proactive distribution and I think I like the sun of that becausewe we live the same story every day. It's about being practive, is abouttaking control, is about advising and and supporting your clients in striving inthe in the market. So look, Verry, thank you very much foryour insight today. I'm sure the audience, I do, lots of interesting insightfrom the experiment that you should you share them and the statements you maneand some of the ads that you are convey as well on on the podcasttoday. Let's question that I've got for you. I'm expecting people to probablywant to get in touch with your father to do the conversation today. Whatis the best way of getting all of Your Berry? They can send mean email, they can go on the website. My email address is biddesmond, exclusive Networkscom, all the general website exclusive Networkscom or exclusive groupcom.But we run a very flat, real organization here. No matter what anybody'sinquiry is, will give it my media at tension mob. That's wonder foot, but I mean it's fantastic and and I know busy you out the moment. We spoke a few weeks ago about about your objectives gazing the US andthat you have been very, very involved and back in fall squared a fewtimes. So I really appreciate the fire that you took the time today toget always us and and again, thank you very much for your insight andthank you for your time today. Well, thank you for the tenzero dollars fordoing it. Ha Ha, Ha's...

...pleasure. It's in the broad I'mgoing to see your desk these guys. Thank you. Thank you very much, burried. operatics has redefined the meaning of revenue generation for technology companies worldwide. While the traditional concepts of building and managing inside sales teams inhouse has existedfor many years, companies are struggling with a lack of focus, agility andscale required in today's fast and complex world of enterprise technology sales. See Howoperatics can help your company accelerate pipeline at operatics dotnet. You've been listening tobe tob revenue acceleration. To ensure that you never miss an episode, subscribeto the show in your favorite podcast player. Thank you, so much for listeninguntil next time.

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