Dmitry Vinogradov, MERLION: only by changing yourself can you survive in a changing world

“We all want and can change the world around us,” with these words Dmitry Vinogradov, CEO of MERLION, began his speech at the opening of the MERLION IT Solutions Summit 2019 . - And we all are doing this, with just one flick of the finger - both in everyday life and in business. We want the changes we need to happen faster and faster. And it becomes possible thanks to new technologies. A few years ago, creating a show in which everyone sitting in the hall could take part in real time was impossible. And now it has become a reality. A few years ago, we could not even imagine how quickly our business could change. And now, yesterday's "future" has already become our present."

IDC predicts that by 2022, up to 60% of global GDP will be digitized. And the growth of a given industry will be determined by new digital technologies and initiatives, he continued: “Companies that cannot change will simply lose. And this means that our industry, which is becoming key for the entire global economy, is not just developing, it is changing by the demand of the times. And in parallel with all these processes, IT distribution is changing. Moreover, not only the goods and services that IT distributors offer are changing, but also the business models of these companies are changing. A modern IT distributor is no longer just a provider. This is a consultant, a service company, etc. From simple deliveries of goods and services, we move to the sale of solutions, cloud services, and even to the creation of new types of services in traditional areas, such as finance or marketing.

The strength of our partners lies in knowing the needs of customers. You are all experts in the fields and industries in which you work. And it is you who know better than others where and how in practice this or that innovation can be applied.

The strength of the distributor lies in the breadth of the portfolio of proposed solutions. Every day we work to help you solve any arising problem.

And the strength of the vendor is in visionaryism and innovation. They spend hundreds of thousands of hours of R&D to develop products, services, solutions that may not even be needed today, but that will be in demand tomorrow. And I am convinced that only together, only by common efforts, we can not only survive but also develop in a situation where everything around us changes so quickly. But even when everything changes, our good, partner, friendly relations remain unchanged. This is precisely what sets the vector of our common development. And what about technology? And technology helps us move in the right direction, into the future that we create ourselves.”

Naturally, after such a speech, we could not help but ask Dmitry Vinogradov how MERLION feels in this changing world of distribution.

CRN/RE: Is the concept of IT distribution still alive?

Dmitry Vinogradov: It’s alive, although, of course, now we see how radically this concept is being transformed. Distribution companies are starting to position themselves as service providers. This summer, articles appeared in the Western press in which major players in our segment declared: “Don't call us distributors.” But this is not so much an attempt to disown distribution as such, but a desire to focus on the radical changes that have occurred in this market.

Distribution companies insist that they should no longer be perceived as suppliers of boxes but as providers of a wide range of services. Similar trends can be seen in other industries: for example, large banks begin to position themselves as IT companies, thereby emphasizing that they focus on modern financial services.

And the Russian IT market is not far behind global trends. Almost all vendors are represented and want to work in our country. Launches and starts of equipment, software, and services sales are synchronized all over the world. Even Apple began selling new smartphones in Russia at the same time as the United States. Therefore, it can be argued that all global trends in both IT and IT distribution come to our country without delay.

And this once again reminds us that you can no longer work in the old way - you will find yourself overboard. Cloud technology allows you to directly deliver the service to the consumer, no matter who he is - a company or a private person.

Many large customers conclude direct contracts with vendors. This means that both in the world and in Russia, it is vital for distributors to change their business model and become service companies, increase their expertise, and offer not individual products but complex solutions and services.

And this is beneficial for everyone, since the speed of creating a solution increases, its quality increases, and the cost for the end user, in the long run, becomes more profitable.

CRN/RE: What additional features have been included in the list of “mandatory distributor skills” over the past 5 years?

D.V.: In our case, these are not additional functions but vital development directions. IT projects have ceased to be work on the supply or implementation of something that works well from the best manufacturers, of which we have several hundred in our portfolio. A modern project is characterized by the fact that the IT solution should work correctly for a specific customer. This requires a high level of competence in services for the selection and configuration of a solution, its refinement for the needs of the customer and the requirements of regulators, scaling, modernization, testing, evaluating the effectiveness and compatibility with other systems, and, finally, transferring to the cloud everything that is worth moving there. Also, it is necessary to train the customer to use innovations correctly. This is teamwork in which the distributor has an important role to play. Up to the point that he can act as a coordinator and close the task by the forces of his specialists. All this depends on the conditions and realities of a particular project. And these roles are no longer secondary to us. Coming to the forefront, they require daily work to increase the level of our competencies, both the company as a whole and the competence of our specialists.

CRN/RE: What is MERLION today, and how does it differ from the MERLION that we discussed in the previous interview (almost two years ago)?

D.V.: Considering that two years ago, we were a leading player in the Value Added Distribution market, we can say that there are no changes in this regard. But to maintain leadership, it is necessary to modernize the business constantly: make it more powerful and, at the same time, more economical. We have chosen several areas which, as the summit showed, are strategic for global IT companies.

Clouds. In 2018, we launched MerliOnCloud, the cloud distribution, and for the first year of the new unit’s active work, together with the vendors, we formed the largest volume portfolio of cloud solutions available through partners on our own unique technology platform.

Analytics and artificial intelligence. We have created a new AnalyticsHub business line related to Big Data, artificial intelligence, and machine learning, and in six months, we have reached the level of very large projects, which I hope we will be able to talk about soon.

Infrastructure competencies. We strengthened them at the expense of the High Energy team, a company in the field of creating energy supply systems for large facilities.

Import substitution. We have expanded the iRU portfolio of solutions, which allows partners today to implement complex IT projects of any scale on the products of this manufacturer.

We have seriously deepened integration with OTP and PRO IT, companies with unique experience in the field of import substitution, development, and implementation of IT solutions in the commercial and public sectors, including those based on artificial intelligence. In the first years, we have achieved a significant synergistic effect from the use of each other's competencies.

CRN/RE: And who does MERLION consider to be competitors? Are these only large distributors?

D.V .: I would not say “competitors” - these are industry colleagues with whom we have been participating in the formation of various IT areas for the third decade. The main difference (and strength) of MERLION is in diversification. In addition to the VAD component that we are actively developing, wide-profile distribution and integration (which is also well represented in our colleagues' companies), streamlined development of products under our own brands (which many also practice), we are the only ones with such a unique portfolio of assets. It has strong positions in the distribution of household appliances (we are confidently in the top 3), the largest manufacturer of office chairs and stationery in plastic in the territory of the Russian Federation, own and franchised retail and service networks. It is easy for partners to develop their business with us in any industry and in any direction. It is difficult to find such analogs in the Russian market.

CRN/RE: At the opening of the Summit, you said that now distributors deal not only with the distribution. And if you are not only a distributor now, then why does your company need this “not only”?

D.V.: This, of course, is true for us. Because we are systematically and progressively “twisting” new things into our core business and industry — clouds, artificial intelligence, engineering, big data. We accompany all this with certain competencies, expert assistance, and qualified personnel. Thus, we help partners to be not just dealers, but direct them to develop as an integrator of solutions. What do we need it for? The market is changing, new vectors are emerging for business development, and therefore new opportunities are opening up. To stay away means not to progress, and we cannot afford this.

CRN/ RE: The market has a lot of trends now, which are sometimes multidirectional. What are you betting on? Why do you consider these trends to be the most promising?

D.V.: This may be a professional skill. Any serious corporate project is an implementation with an eye to the future. By participating in such projects for almost three decades, you will inevitably learn how to predict market trends. Both technological and business ones. I said that the areas we chose for the development of VAD about two years ago have now become the focus of the attention of the largest IT corporations represented at the MERLION IT Solutions Summit 2019. This is not because we are the smartest. It's just that we are so deep in this market that we notice future trends and changes, well, maybe not simultaneously with the world's leading developers (we do not have such huge R&D institutes yet), but much earlier than most market players.

The key areas now are clouds, analytics, and artificial intelligence, as well as infrastructure, including engineering, which will form the basis of all new technologies. The development of these areas will lead to the expansion of teams of specialized specialists and the deepening of their competencies. As much as the market requires.

CRN/RE: If you change yourself, does the world around you change as well? Has the world in which MERLION “lives” changed since the last interview? Are there new dealers and vendors? And what new things can you give or offer to your partners as a distributor?

D.V.: Rather, the world is changing, and we are doing the same. Thanks to our new projects and business lines, we have come to those areas where we have not been represented before, but they largely determine the development of IT for the coming years. This is, for example, natural intelligence and cloud services. We are building up new expertise, dozens of new vendors appear every year. So, in particular, today, there are already more than 40 services from 22 "cloud" vendors on the MerliOnCloud platform launched a year ago.

As a distributor, we, firstly, offer, and will offer partners the most advanced supply chains. Now, for example, the topic of XaaS is becoming more popular: when everything - services, solutions, and infrastructure, and not just products - is provided as a service. And as part of this area, we plan to quickly broadcast to Russia the most successful world practices that are used by vendors in other countries.

Besides, we are improving the scheme of online interaction with partners. By the fall, the interface and functionality of the B2B portal was seriously updated - this is a new level system. In the future, to speed up all procedures, we intend to automate as much as possible the authorization process so that it takes a minimum of time and efforts of the partner.