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Tech Data Cloud Revenue Hits $500 Million Run Rate

Tech Data‘s cloud business has reached a $500 million annual run rate, and remains one of the fastest-growing segments of the company, according to CEO Bob Dutkowsky.

Cloud remains one of Tech Data’s major focus areas of investment and expansion. The others include converged, hyperconverged infrastructure (HCI), mobility, security, big data and analytics, Dutkowsky said.

No doubt, Tech Data’s recent buyout of Avnet Technology Solutions will help to address several of those areas. “In the cloud space for instance the combination of our two companies provides immediate breadth and scale as our cloud infrastructures are extremely complimentary to each other with minimal vendor overlap,” Dutkowsky said during the call. “Our cloud business remains one of our fastest growing segments and is currently on a $500 million annual run rate. In our view, the cloud is a true end-to-end environment with solutions designed to serve the consumer all the way up to the most complex data center applications.”

Admittedly, “run rate” statements can be a bit misleading. Generally speaking, a run rate points to the most recent month of revenue and multiplies by 12. So in Tech Data’s case, the company likely had about $42 million in cloud-related revenues during its most recent fiscal month. Previous months could have been somewhat to significantly smaller, depending on growth rates.

Managed Security Solutions

Meanwhile, the Technology Solutions buyout also bolsters Tech Data’s security portfolio, Dutkowsky indicated. “By leveraging the best of the best between Tech Data and Technology Solutions, we have created an industry leading security portfolio that provides our partners with the products and services they need to develop a successful security practice,” Dutkowsky said.

Visit MSSP Alert for the latest on managed security services.

Indeed, Tech Data launched a more formalized security push this week and promoted associated managed security services to partners.

Of course, Tech Data isn’t the only distributor focused on cloud and IT security services. Ingram Micro, for one, is working with about 10,000 security partners — hundreds of whom attended last week’s Ingram Micro TrustX Alliance conference in Orlando. Also, I suspect Ingram Micro Cloud remains the largest cloud business among major distributors.

Still, Tech Data is showing its own signs of progress. For its quarter ended April 30, 2017, net sales were $7.7 billion, up 29 percent compared to the prior-year quarter. Most of the growth involved the Technology Solutions acquisition.

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