Tech Data: Market Strength Means Bold Moves by Partners

(Pictured above: CEO Rich Hume on stage at the Tech Data Partner Summit in Scottsdale, Arizona, Nov. 5.)

TECH DATA PARTNER SUMMIT — With the market showing unanticipated strength, the challenge for everyone in the channel is to strike while the iron’s hot and make decisions now to better position themselves for when the market slows down.

That’s the message conveyed by Rich Hume, Tech Data‘s CEO, during the start of the IT distributor’s Partner Summit this week in Scottsdale, Arizona. The theme of the conference is “Transformation Awaits.”

Tech Data’s strategy is investing in next-generation technologies, strengthening its end-to-end portfolio of products, solutions and services, transforming digitally and optimizing its global footprint, Hume said.

“We all need to make change in order to align ourselves with the future,” he said. “That answer is likely different for many partners. For example, if you have been a traditional data-center partner, you might think of pursuing a hybrid cloud strategy and really kind of staying within that data center link. Of if you were that traditional data-center partner, you might think, ‘I want to diversify my business and build a security practice.’ Or you may say, ‘In my data-center heritage, when I look at my customer set, I have a concentration of customers in a certain health-care category,’ so you might say, ‘I’m going to pursue a vertical strategy and take advantage of the emergence of IoT and analytics.”

There are a lot of choices you can make, but none is easy and they all require hard work, Hume said.

“To stand up a security practice, if you’re a traditional data-center provider, it’s a different skill set; you’ve got to go build it separately,” he said. “In order to pursue an industry vertical, if you’ve been a traditional horizontal data-center partner, you’ve got to go recruit and build resources that have vertical expertise.”

Hume expects to see a growing number of Tech Data’s partners make a move and reposition themselves in a high-growth area, “and so the composition of their business will change, which will in fact then lead to a change in the discussion.”

“I would predict that we’re going to see good movement into the new areas,” he said. “Frankly, the channel moves much slower than vendors because vendors create the content and then do the first of its kind, etc. But now is probably the optimal time for the channel ecosystem to accelerate adoption of the high-growth areas: hybrid cloud, analytics/IoT, big data, security and services.”

Joe Quaglia, Tech Data’s president for the Americas, said partners want more technical skills and resources because “despite moving to more perceived simple platforms, we’ve complicated the world and training is extremely important as everybody goes through transformation.”

Partners also are interested in more modern financing programs, he said.

Tech Data’s Joe Quaglia

“That’s exactly what our Tech-as-a-Service provides, is an ability to take a traditional solution of hardware, software and services, and put it into a subscription model and give a customer the ability to scale up or scale down,” Quaglia said. “We launched this in December of last year, mostly on the PC side of the business, and today we offer it across the entire business — including advanced solutions. We can turn what was traditionally a one-time fee, an upfront investment, and put it into a three-year contract with a monthly subscription, and they pay for what they use.”

Partners need help in building practices in categories that are emerging and growing, “but they don’t have the skills, they don’t have the money and they don’t have the resources to do that,” he said.

“Tech Data helps partners do that, to move to next-generation technologies,” Quaglia said.

During the conference Monday, Tech Data announced it has added CloudCheckr analytics and management packages to its StreamOne cloud platform, giving cloud partners and their end customers …

… more control of their AWS and Azure environments with enhanced cost, security and performance management.

CloudCheckr transforms data from public-cloud services into insights by reporting, alerting, analyzing and automating the environment for optimal utilization and costs — while assuring a “safe environment and mitigating cloud vulnerabilities and misconfigurations,” according to Tech Data.

Stacy Nethercoat, Tech Data’s vice president of cloud solutions for the Americas, said the insights that CloudCheckr provides extend the capabilities of her company’s cloud platform.

The analytics package targets partners and their end users who are “looking to get better insights around cost and how to cost-optimize their environments that are either sitting in AWS or Azure,” she said. The management package layers in insights around security, compliance and “some of those higher-order needs that many end-user clients need,” she said.

“Many of our partners have worked with CloudCheckr, and with this relationship coming under the umbrella of Tech Data, our partners have a level of confidence that we’re ensuring they’re getting the right level of service and we’re able to deliver the services that they need to deliver to their end users,” Nethercoat said. “It’s really taking things to a new level in terms of that strategic partnership.”

Joe Regan, director of LRS IT Solutions, said for the last few years his company has been going through a transformation of “selling more solution-based offerings to our clients, services and software in addition to the hardware that we’ve always sold.”

“We’ve stood up solutions in cloud, security and analytics, and that transformation, moving to that kind of model that Tech Data described today, fits exactly with what we’re doing,” he said.

Steve Giondomenica, president/owner of reseller/integrator CMI, said the business model of the past, “while it’s still paying a lot of bills is not the business model of the future.”

“Despite being around 41 years, there’s a lot of change required,” he said. “We’ve been at it for four or five years and it’s far more challenging than I thought it would be. We’re really trying to take the core business that we do, which is servicing data centers and helping build out their infrastructure and all of that, and as that’s being replaced by cloud and whatever else is out there, we have to figure out ways to add value above that.”