For as long as I’ve covered the channel, someone has been predicting the end of distribution. The models change — direct sales, e-commerce, cloud, marketplaces — but the argument stays remarkably consistent: a new, more efficient path to market has arrived, and intermediaries are no longer needed.

It’s a compelling argument. It’s also been wrong every time — not because the new models failed, but because the predictions misunderstood what distribution actually does. They described a transaction. Distribution operates as an ecosystem.

In this episode, I step back from the news cycle and think out loud about why distribution keeps surviving the predictions of its death, and what that tells us about how the channel actually works.

Some of the threads I pull on:

The recurring cycle of disintermediation predictions, and why they keep sounding convincing without ever quite landing. How the market consolidated from what many considered an over-distributed landscape into something closer to right-sized — through real churn, mergers, and the emergence of entirely new distribution models built around cloud and subscription commerce. The core scale functions that distribution provides (logistics, credit, enablement, and relationships) and why those become harder, not easier, to replicate as the market gets more complex.

I also spend some time on why distribution’s role in Canada is amplified — the realities of geography, Canadian-dollar credit, bilingual support, and regulatory compliance make the aggregation function less optional than it might appear from south of the border.

And I look at what’s next: distribution’s integration with hyperscaler marketplaces, its emerging role in AI enablement and governance, and why the platforms that were once supposed to replace distribution are increasingly working alongside it. Recent industry research from the GTDC suggests that distribution is now being positioned as a “digital force multiplier” — a framing that would have been unthinkable a decade ago.

This is a solo essay episode — no guest, no interview, just me working through an idea I’ve been circling for a long time. I’d love to hear how you see it, especially if you’re a partner, vendor, or distributor who’s lived through a few of these cycles. Drop me a line or find me on LinkedIn.

Related: Your Citrix relationship just changed: Inside the Arrow Electronics transition

Hello and welcome to In the Channel from ChannelBuzz.ca, bringing news and information to the Canadian IT channel for the last 16 years. I’m Robert Dutt, editor of ChannelBuzz.ca, and as always your host for the show.

Before we get started, a quick note on today’s episode.

This one’s a little different from what I usually do here. There’s no interview, no guest — just me, thinking out loud about something I’ve been circling for a long time.

It’s less about breaking news, and more about sense-making.

And it starts with a thought I’ve had more times than I can count…

I could have been writing that distribution was about to be disintermediated since the late 1990s. And if I’m honest, sometimes I probably should have — because every few years, there’s a new reason why this time feels different.

E-commerce.

The cloud.

Marketplaces.

Vendors going straight to partners.

Vendors going straight to customers.

Pick your era — the argument has always been there.

And yet, here we are.

Distribution didn’t disappear. It didn’t even really shrink in relevance. What it did instead was something quieter, and maybe more interesting: it evolved — repeatedly.

So today I want to talk through why I never quite bought into the “this finally kills distribution” argument… even though, on the surface, it often sounded very convincing.

If you’ve been around the channel long enough, you’ve heard this cycle before.

A new model emerges that looks cleaner, faster, more efficient. Someone points out that vendors don’t need intermediaries anymore. Someone else argues that software margins can’t support the old model. And suddenly, distribution is framed as legacy — or worse, inertia.

What makes these arguments compelling is that they’re not wrong in isolation.

Yes, vendors can sell direct. Yes, marketplaces remove friction. Yes, partners want fewer hops between themselves and the vendor.

But what these predictions often miss is that they’re describing a transaction, not an ecosystem.

And distribution has never really been about a single transaction.

So what actually happened?

Distribution didn’t disappear — but it also didn’t stay the same.

Over the last twenty-plus years, there’s been real churn. Companies have come and gone. The market consolidated dramatically. What many once grumbled was an over-distributed landscape gradually became something closer to right-sized.

That’s important, because survival here didn’t mean freezing the model in time. It meant pruning, merging, specializing — and in some cases, starting over entirely.

Broadline distributors gave way to value-added distributors. Value-added distributors made room for cloud-centric distributors.

And you can trace this through specific inflection points. The largest merger in distribution history created the world’s biggest technology distributor — not as a retreat, but as consolidation at scale. Cloud-native distributors that barely existed fifteen years ago have grown into billion-dollar businesses by building entirely new models around subscription commerce and lifecycle management. And just in recent weeks, we’ve seen a major vendor shift more of its partner management to a distributor — not less.

These aren’t the moves of a model in decline. They’re the moves of a model still being invested in.

Through every major shift that was supposed to bury distribution, what actually emerged was a new version of it.

The form changed. The function endured.

And that function — at its core — has always been scale.

Scale of logistics.

Scale of credit.

Scale of enablement.

Scale of relationships.

That last one is easy to underestimate. Over the last couple of decades, many distributors moved well beyond transactional relationships and invested in building partner communities — creating spaces for peer learning, business planning, and strategic engagement that had nothing to do with moving product. That shift quietly changed where distribution sits in the ecosystem.

Even in a cloud world, someone still has to aggregate demand, mitigate complexity, and make it economically viable for thousands of partners to transact with hundreds of vendors — without every interaction becoming bespoke.

That problem never went away.

And for those of us in Canada, these dynamics are amplified. In a market this size, spread across this much geography, with a relatively small and diverse partner base, the aggregation function of distribution isn’t optional — it’s essential. Canadian-dollar credit facilities, in-country logistics, bilingual support, compliance with Canadian regulatory requirements — these aren’t things a vendor portal south of the border can easily replicate. Distribution in Canada has always had to earn its place a little more visibly, and arguably, that’s made it more resilient.

Years ago, I heard many solution providers describe distribution as a “necessary evil.”

Not evil in the moral sense — just unavoidable. Sometimes frustrating. Sometimes slow. Sometimes misaligned with how partners wanted to operate.

I hear that sentiment less today.

That’s not to say distribution is perfect now. It isn’t. And it’s not to say frustrations are gone. They aren’t.

But I think the shift itself is telling.

When parts of the model stopped working, they didn’t get defended forever. They got replaced. When value became unclear, it had to be re-articulated — or the model lost relevance.

That evolution didn’t eliminate criticism, but it did change the tone of it. And tone is often a lagging indicator of whether an industry is adapting in the right direction.

Here’s the thing about disintermediation narratives: they tend to assume that if you remove one layer, everything becomes simpler.

In practice, complexity doesn’t vanish — it just moves. It expresses itself differently.

Vendors still don’t want to manage thousands of small relationships directly. Partners still don’t want to onboard dozens of vendors one by one, each with unique billing, support, and enablement models. And customers still expect solutions to work together, reliably, at scale.

Distribution absorbs a lot of that complexity — quietly — and that’s why it often looks invisible right up until the moment you try to remove it.

And what’s striking is that distribution’s next chapter may be its most ambitious yet.

The major cloud marketplaces — the very platforms that were once framed as distribution’s replacement — are becoming a space where distributors are actively carving out a role. Not competing with marketplaces, but integrating with them — helping partners navigate multi-cloud procurement, manage billing complexity across platforms, and make sense of an increasingly fragmented buying landscape.

Industry research suggests the channel will handle the majority of enterprise marketplace transactions within the next few years. That’s not despite distribution — it’s increasingly through it.

At the same time, distribution is stepping into AI enablement — not just listing AI-powered products in a catalogue, but helping partners evaluate what to trust, how to deploy responsibly, and how to build services practices around fast-moving technology. That’s a governance and advisory function. It’s a long way from moving boxes.

None of that was in the job description twenty years ago. But it’s a natural extension of what distribution has always done: absorb complexity so the rest of the ecosystem doesn’t have to.

Some distributors disappeared. Others merged. New ones emerged with radically different focuses. That’s not failure — that’s evolution doing its job.

The broader lesson here isn’t really about distribution at all.

It’s about ecosystems.

Industries that survive disruption aren’t the ones that never change. They’re the ones willing to let old versions of themselves die so that new ones can emerge.

Distribution didn’t survive by insisting it was always right. It survived by changing often enough — and decisively enough — that its role stayed relevant even as individual players did not.

That’s a much harder path than simply defending the status quo. And it’s one that doesn’t always look graceful from the outside.

So yes — I could have been writing that distribution was about to be disintermediated since the late ’90s.

And every few years, the argument probably sounded stronger than the last.

But the reason I didn’t is simple: the prediction never accounted for how adaptable the model actually was — or for the fact that the underlying problems distribution solves never really went away.

If anything, they just changed shape.

And as long as that’s true, the obituary for distribution is probably still a long way from being written.

At least, that’s how I see it.

But this is a space built on the experience of those who live with distribution day in and day out, not theory — and I’m very aware that my view is only one angle on a long and complicated story.

If you’re an MSP, a VAR, a vendor, a distributor, or someone who’s lived through a few of these industry transitions yourself, I’d genuinely love to hear how you see it.

What am I missing? What has distribution gotten right — or wrong — in your world, to allow it to survive?

You can leave a comment, drop me an email, or find me on LinkedIn. I read it all, and it shapes where this conversation goes next.

That’s it for me today. For ChannelBuzz.ca, I’m Robert Dutt, and I’ll see you in the channel.