Managed Maintenance Blog

    The Benefits of ESD Programs – And How MMI Helped A Major IT Distributor Launch One

    October 05, 2017

    The technology industry is no stranger to change. But in the IT channel – where manufacturers’, distributors’ and resellers’ success is often interdependent – organizations need to evolve together.

    city.pngAt Managed Maintenance, we’re committed to helping our clients adapt to the transforming IT sales landscape – and thrive as a result. When business pressures forced D&H, a leading North American IT distributor, to make the switch to electronic software delivery (ESD), MMI was ready to collaborate on a long-term solution.

    Creating a Custom Solution to Keep a Key Partnership Alive

    D&H is a major distributor of everything from consumer electronics to enterprise IT solutions, but one of their largest vendor partnerships is with Microsoft. A few years ago, in its own attempt to modernize operations and better meet customer demand, Microsoft began requiring channel partners to adopt ESD programs in order to sell certain product lines.

    Like most forms of content – music, movies, the latest New York Times’ best sellers – software has quickly evolved from a physical to a digital commodity. Thanks to the internet and explosion of cloud computing, the world of software distribution is no longer limited to discs and drives. As Microsoft embraced an e-commerce model, the tech giant needed its fulfillment ecosystem to adjust accordingly.

    To preserve this critical relationship, D&H needed to act quickly. Lacking the internal resources and infrastructure necessary to launch an ESD program alone, the distributor started looking for outside support. Given MMI’s deep channel expertise, contract management capabilities and technical security standards, D&H ultimately selected our team to collaborate on a custom ESD solution.

    Faster, Cheaper, Simpler – The Benefits of ESD

    Working closely with the client and Microsoft, MMI built robust ESD functionality for D&H on top of our proprietary ONEview platform. Rather than continue to allocate tremendous amounts of time and budget into physically fulfilling software orders, D&H unlocked the ability to meet reseller and end customer needs faster, and more cost-effectively.

    Today, reseller customers can place instant, digital orders through D&H’s ESD module. Order information is automatically sent to Microsoft’s electronic delivery portal so that D&H can procure the appropriate software licenses and download keys. From there, D&H’s ESD system shares the download information with the end customer and sends a delivery receipt notification back to the reseller.

    For D&H, the move to ESD has minimized, if not eliminated completely, the main headaches of physical delivery, including:

    • Wasted time: Manufacturers and distributors that rely on manual distribution processes chain themselves to large-scale fulfillment operations to get products where they need to go. It can take an entire business week alone to process orders, plus additional days to ship product, before end customers install their software. With an ESD program, resellers and distributors instantly place digital orders with manufacturers. As a result, it takes minutes – not days – to procure and send the right software license keys for end customers to download on the spot.
    • Needless costs: As the media industry is learning the hard way, producing and distributing physical assets comes with a hefty price tag. ESD capabilities let IT channel companies remove a number of line-items from their balance sheets – from fulfillment labor and shipping costs to manufacturing and packaging expenses.
    • Subpar customer experience: In a perfect world, end customers would have the ability to forecast their software needs weeks or months out. But more often than not, orders are placed when new licenses are needed. Physical software distribution forces end customers to wait weeks for their products (and suffer potential downtime in the process). Thanks to ESD, end customers can have new users up and running same-day.

    As our partnership with D&H proves, ESD is a win-win for the IT channel and customers alike. But with the right strategy and tools in place, organizations (manufacturers especially) can squeeze even more value from these programs.

    Extending the ESD Advantage

    Maintaining a standard ESD portal that saves time and operational expenses is a positive step for any IT channel organization, but the benefits don’t have to stop there. Rather than oversee separate ESD and contract management or renewal solutions, IT manufacturers in particular stand to gain by integrating the two.

    Manufacturers continue to struggle with capturing product registration and service attach information at the point of sale. By embedding ESD functionality into a contract system of record, manufacturers can automatically start to track what an end customer purchased, and how their usage changes over time. For instance, a manufacturer may see that an end customer bought 50 software licenses. Once they hit 40, the contract management platform could push out an automatic notification letting customers know it’s time to restock.

    This level of insight not only promotes customer stickiness – it can bolster manufacturers’ channel partnerships as well. Having a tool distributors and resellers can access to view end customers’ specific contract information creates exponentially more long-term business value than one-off rebates or partner marketing deals.

    IT organizations have always perceived ESD as a cost-saving capability (and understandably so). But digital distribution has the power to do more than improve margins. With a true strategy and the right tools in pace, ESD can be a revenue-generator in its own right.