Tech Data has introduced an offering designed to help IT providers that don’t have government contracts partner with IT providers that do to pursue opportunities in the public sector vertical.
Available to Tech Data partners in the U.S., the new Contracts Exchange Program (CEP) applies to the federal, state and local government, and education segments. Most buyers in those markets make technology purchases only from companies with specialized contracts that typically take large amounts of time and money to attain. The CEP, however, lets channel pros purchase access to contracts held by other IT providers rather than sink time and money in acquiring contracts of their own.
The result, according to Tim Hannon, vice president of public sector solutions at Tech Data, is a cost-effective route into a rich market for newcomers to the field. “It’s a good way for them to start dipping their toe in the water, figure out the business, and as they get a foothold decide whether or not this program works for them, and if they want to go get their own contracts,” he says.
Experienced public sector partners win as well, Hannon continues, by getting extra ROI on their government contract investments. “They spent a lot of money winning these contracts,” he notes. “If they can get more people utilizing that contract, then it starts to generate a better rate of return for them too.”
The upshot is a classic case of peers helping peers, according to Marty Bauerlein, Tech Data’s senior vice president of North American sales. “We’re allowing our customers to share,” he notes. “If one customer has a really good relationship with a school district but they’re not on the contract, they’ll be able to team with another VAR.”
Companies that list contracts through the CEP set their own terms, conditions, and prices. Tech Data helps would-be access purchasers evaluate contract holders, but doesn’t provide specific recommendations.
“We really want to stay away from selecting who they work with,” Hannon says.
Contract vehicles supported by the program include Governmentwide Acquisition Contracts (GWACs), Indefinite Delivery / Indefinite Quantity (IDIQs), Blanket Purchase Agreements (BPAs), National Association of State Procurement Officials (NASPO) ValuePoint, Government-to-Government (G2G) Marketplace, and the Texas Department of Information Resources (DIR).
At present, two solution providers with extensive public sector experience are offering access to contracts through the CEP: Strategic Communications LLC, of Louisville, Ky., and All About the Data, of San Antonio, Texas. “We’ll have other participating partners over time,” Hannon says.
Arrangements of the kind Tech Data facilitates through the CEP are not uncommon in the public sector space, but historically have required participants to find and negotiate with each other on a one-off basis. “We’ve elevated it from something that’s ad hoc into a strategy that we’re going to use,” Hannon observes.
Significantly, he adds, that strategy employs a 100% partner-to-partner model in which Tech Data itself has no contact with government agencies. “Some of our competitors go out and get direct contracts themselves,” Hannon says. “When you start to get your own contracts and you’re managing and maintaining them by yourself and have a direct component to it, your partners are always fearful that you’re going to go direct.”
A 35-year industry veteran who most recently served as director of U.S. public sector partner sales at Cisco, Hannon joined Tech Data about nine months ago in connection with a larger effort by the company to drive increased sales to government, education, and healthcare end users. “It’s a huge opportunity for us,” Bauerlein says, noting that Tech Data now has opened an office in Chantilly, Va., to support that initiative.
“In the [federal government] business, you need to be resident in D.C.,” he observes.
Since stepping into his current role, Hannon has reorganized and expanded Tech Data’s public sector operations, hiring subject matter experts in segments like defense, intelligence, and civilian agencies whose work includes designing and executing an ambitious list of 10 “market transformation initiatives” covering everything from cloud computing to government operations.
The revamped group’s emphasis on deep expertise and end-to-end solutions makes it similar to the specialist sales units Tech Data has established in its strategic pursuit of four large and rapidly growing next-generation technology markets: cloud, security, Internet of Things, and endpoint solution.
“They’re based on technology,” says Tony Trombly, sales director for the public sector group, of those other units. “We’re based on market expertise.”
IT spending in the public sector will total $258 billion in 2019, according to data from Gartner cited by Tech Data on its website.
