Publisher or distributor: two roles, two economics
Every piece of business software passes through two kinds of company on its way to a buyer. One owns the product, the other owns the route to market. From the outside they look alike; inside they run on opposite economics.
What a publisher does
A software publisher owns the intellectual property, or buys the rights to it from an independent developer. Its job is to turn code into a commercial product, and that job has five parts.
- 01Development and refinement. Funds the creation of the product, hires studios, pays for the roadmap.
- 02Marketing and brand. Creates demand, runs advertising, decides how the product is positioned and against whom.
- 03Sales. Puts modern monetisation tools in place: subscriptions, tiers, usage-based pricing, marketplace listings.
- 04Legal protection. Manages licences and patents and fights piracy.
- 05Support. Organises global user support and ships updates.
What a distributor does
A distributor is a wholesale intermediary between the publisher and the points of sale: resellers, integrators, shops. In the cloud era the large ones have become operators of marketplaces. Their work is different in kind.
- 01Logistics and sales channels. Builds the network of partners that will actually sell the software.
- 02Cloud distribution. Runs cloud marketplace platforms where SaaS subscriptions are provisioned automatically.
- 03Deal financing. Extends credit to resellers and takes on the risk of non-payment.
- 04Bundles. Assembles software from several publishers into a single IT solution for a business.
Side by side
The two rows that matter are risk and margin. A publisher bets on a product and keeps most of the price if the bet pays off. A distributor bets on nothing in particular and keeps a few per cent of a large number. Neither model is better; they are different businesses, with different people and different KPIs.
Why Digict LTD runs both
Combining the two roles in one company does not mean putting them in one department. Distribution runs on volume and thin margin; publishing runs on expertise and thick margin. We keep them as two wings under one window, which is what the industry calls a value-added distributor, or VAD 2.0: an accelerator of digital transformation and global scaling rather than a company that moves boxes.
- 01The distribution wing. Heavy lifting: logistics, negotiating terms with the IT giants, volume, deal financing. Its KPI is revenue.
- 02The publishing wing. A venture boutique: scouting startups and ISVs, legal packaging of their IP, product marketing. Its KPI is margin and the growth in value of the vendors we publish.
The synergy is practical. A large client does not want to buy servers from one supplier, Microsoft licences from a second and a niche AI-analytics product from a third; one window closes all of it. The same client base becomes a ready sales channel for the startups we publish, which is why a publisher-distributor is a golden ticket to market for a young ISV. And the economics balance: hardware and Big Tech licences bring turnover, publishing brings net profit.
The model has two honest costs. Hardware supply is capital-intensive: purchasing, customs and warehousing tie up working capital. And the two wings need genuinely different competences, which is a management task rather than a slogan. Both are why the model is rarely done well, and both are why it works when it is.