Episode 7: What is the "Technology Channel"?

The technology channel is made up of several types of companies that sit between the organisations that create technology and the organisations that use it. Understanding these layers makes it easier to navigate the supply chain, compare suppliers, and make informed procurement decisions. This overview explains how the channel works from bottom to top and outlines the role each type of company plays.

The role of technology vendors

The foundation of the supply chain begins with vendors. These are the companies that create the hardware and software that organisations buy. On the hardware side this includes well-known manufacturers such as HP and Dell. On the software side it covers companies like Oracle, Microsoft, SAP, and Salesforce.

Vendors design and build the technology that shapes the market. They range from global brands to niche specialists, but they sit at the bottom of the stack because they determine what technological options are available.

How distribution developed

Early vendors were highly engineering-focused and needed better ways to get their products into the hands of buyers. This led to the development of distributors who originally handled stock and credit.

Modern distributors still support the market with logistics, financing, and training. Although most organisations will never interact with distributors directly, they remain an important part of the channel.

Where resellers fit

Above distribution sits the reseller layer. Resellers focus on fulfilling technology orders and handling logistics, ensuring the right product is delivered and configured correctly. Their service offering is limited, but they provide a straightforward and often cost-effective route for organisations that already know what they want.

As margins on simple fulfilment have declined, many resellers have expanded into more advanced services.

The growth of managed service providers

The next layer is managed service providers. This is a large and diverse group of companies that take the technology and make it work day to day. They provide services such as maintenance, monitoring, help desks, and ongoing support.

Choosing the right managed service provider often depends on cultural fit, familiarity with specific technologies, and understanding of the client’s industry.

The role of systems integrators

At the top end of the channel are system integrators and service integrators. These larger companies, often global consultancies, typically handle complex IT estates and major corporate projects. They focus on large-scale implementations and specialist work requiring deep expertise.

Bringing the channel together

To summarise the full structure: vendors at the bottom, buyers at the top, and a wide range of channel companies in between. Understanding how these layers fit together helps organisations navigate technology procurement more effectively and select the right partners.

If your organisation wants clearer guidance on navigating the technology channel and choosing the right partners, get in touch.