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Memo From Tech Data to VARs

As VARs and MSPs march forward on their entrepreneurial journeys, Tech Data Corp. CEO Bob Dutkowsky has this simple offer: “Let us lead you.”

“We have an interesting perch in the channel,” says Dutkowsky. “We see fledgling vendors sometimes turn into powerhouses. We see the VARs and channel partners evolve. And then we have our own introspective view. We were a small company at one point and we never forgot that. We bring the spirit of entrepreneurialism to the table every day.”

And what is that entrepreneurial spirit telling Dutkowsky right now? The simple answer is to stay diversified while also specializing in hot segments like mobility, security, cloud and converged data centers.

During an interview with ChannelE2E today, Dutkowsky recalled the 2009 financial implosion — and the resulting U.S. economic crash. At that point, the housing and construction market around Tech Data’s headquarters dried up. If you were a VAR focused on that single vertical — builders or construction — customers simply weren’t in a position to buy from you. The hidden message: Make sure you specialize in more than one area.

Hot or Not? It’s All Relative

In a global ecosystem, various verticals and IT segments will always run hot and cold. “But we have the ability to focus on what is hot, and to deemphasize areas that aren’t quite so hot,” Dutkowsky asserts.

After Tech Data announced Q3 2016 results today, Dutkowsky reiterated the hot segments to ChannelE2E. “Mobility certainly remains hot but that doesn’t mean the handset market. It means the systems that sit behind mobile to manage, share and protect mobile data. We’re leading our VARs to those mobility solutions.”

The same goes for security, where partners must increasingly wrap security services around networking, data storage, compute and other infrastructure. He sees a similar shift in storage, where partners are pushing beyond device sales to also focus on storage management — including the optimization of solid state storage and converged data centers.

Tech Data Cloud, Intellectual Property

Among the key transformations to keep in mind: Cloud computing. Tech Data has spent recent years “and lots of millions in investments” to build StreamOne — an end-to-end provisioning, billing and marketing engine. At the same time, the company has branded around the TDCloud moniker to help educate partners about cloud opportunities.

When it comes to StreamOne, “distributors typically don’t build their own intellectual property like that. StreamOne is Tech Data IP. It’s very unique.” It allows VARs to push beyond the traditional ‘buy, sell and bill’ mentality. With StreamOne, VARs march toward provisioning, activation, monthly billing, and more. At the same time, TDCloud education allows the VAR to learn “how to become successful in the virtual world, rather than the physical world.”

Tech Data’s cloud revenues are on pace to be about $200 million this year — about the same as Ingram Micro’s and pretty impressive when viewed purely in the cloud market. But Dutkowsky offers plenty of context, noting that Tech Data’s overall business generates $100 million a day. “But we can see that we have to get our partners ready for the cloud. And consequently, we’ve been making the investments in cloud technology. But it won’t be an all-cloud world.”

Indeed, he points to the continued hybrid world where cloud, on-premises and mobile strive to live in harmony — no doubt, with some help from Tech Data VARs along the way.

“I think it’s safe to say your readers are on that journey,” says Dutkowsky. “But they need help. We have the scale, the balance sheet, the relationships with the vendors to get the certifications they need. We can guide them through that process.”

Side note: ChannelE2E has been in touch with additional distributors in recent weeks, exploring their various intellectual property (IP) initiatives. We’ll share those additional perspectives in the weeks ahead.

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