GTDC's Curran Talks Industry Past, Future on Eve of Exit

This week we learned that Tim Curran, CEO of the Global Technology Distribution Council (GTDC) for the past 16 years, is stepping down.

Given the enormous changes in the technology industry – from a shrinking distributor footprint as a result of mergers and acquisitions, to cloud computing. digital disruption and born-in-the-cloud vendors and partners, the GTDC board has much to consider when selecting its next CEO.

In the interim, when Curran retires on Jan. 2, Kavita May, senior vice president of planning and operations at GTDC, will fill the slot.

GTDC’s Tim Curran

“Pricing, credit and on-time delivery remain critical, of course, yet by no means define what distributors and solution providers are all about in the digital era,” Curran said in a keynote at the consortium’s 2018 summit in September. “It’s now about strategic problem solving that distributors, solution providers and vendor partners conduct together on all fronts.”

That’s not the only change taking place in the distribution sphere. How about distribution as a service? The landscape of services offered by the tech-distribution industry has multiplied over the past few years; for example: vendor planning and marketing; solution offerings and education; financing and channel management; deployment and post-sale services, and life-cycle renewal and disposition.

Channel Partners sat down with Curran to discuss the challenges ahead for distribution, the GTDC, as well as his tenure at the organization.

The GTDC is a worldwide industry organization dedicated to defining and promoting the role of wholesale distribution in a successful and healthy information technology channel. Its mission is to articulate the value of distribution to the vendor community. The lion’s share of channel partners rely on distribution for products and services.

Curran, who has been teaching at the University of Florida St. Petersburg for the past 10 years, will continue to teach there after wrapping up his tenure at the GTDC.

Channel Partners: You’re at the end of your road with GTDC. Reflect back on the early years with the organization and why you took the job.

Tim Curran: Very early in my career, I got a Ph.D. from Columbia in international political economy, so I’ve always been a passionate globalist who thinks that the world can benefit if we all work together.

I took the job because I was interested in global affairs. I built out the organization into Europe, Latin America and Asia. Our biggest event of the year is the GTDC Summit that takes place in California, and last year we had 70 IT vendors attend, covering hardware, software and cloud. In one day, they could meet with key distribution partners.

We also hold a big event in Europe, a smaller meeting in Latin America, and we’ve had some preliminary meetings in Asia to try to do the same thing.

CP: What was the GTDC like when you joined — the days of pick, pack and ship?

TC: It had just gotten off the ground and was struggling a bit. We built it out. I started a database program whereby all the distributors submit their sales-out data (they can’t see other distributors sales data) but they can figure out their own market share. The databases are used by distributors to track their performance. That helps to financially support the organization.

When we started, we had six or seven distributors — and now we have 24. To be a member, if you’re a U.S.-based company, you have to have $1 billion in sales, and if you’re an international member, you have to have a minimum of $500 million in sales. We wanted to create an organization that …

… when they get together, they have common issues and concerns.

There are a lot of smaller distributors, but if a large distributor sat down with a small distributor with $2 million in sales, there’d be almost nothing to talk about.

In the U.S. we have all the big distributors – Ingram Micro, Tech Data, Arrow and Synnex.

CP: Regarding smaller distributors in the U.S., do you keep your eye on those players and the impact that they may be having on traditional distributors?

TC: We do keep our eye on the market, and we have added a number of members over the past couple of years if they reach the required level and they express interest and reach out to us. There are small distributors; they work on niche technologies and they’re also successful, but there are limits on who can join the organization.

We’re a nonprofit and we’re required to have clear membership guidelines. If a distributor meets the guidelines, we have to let them in.

CP: Are there distributors that have recently joined the GTDC?

TC: Recent additions are Almo and Tessco.

CP: What about getting vendors on board with distribution?

TC: Vendors who have a product that is IT or communications-related and they have interest in working with a distributor they can come to an event. There’s a low cost – $199 – and they’re put in front of all of the big distributors, and there are also keynote speakers, industry analysts, panelists and good content to educate them on what’s happening in distribution and the market.

We also developed a training program a couple of years ago to help vendors understand how their business can be more profitable if they leverage the infrastructure of a distributor. Vendors who leverage a distributor do so at a much lower cost than if they do it themselves.

CP: How does traditional distribution address today’s IT industry, which is based more on opex than capex, cloud infrastructure and software rather than hardware? There is a perception in the industry, among younger cloud and born-in-the-cloud players, that traditional distribution is so yesterday.

TC: The market is changing and yes, cloud is really taking off, but all of the big distributors have major cloud platforms and they are active in the cloud. There’s a point I often make when at several times in the history of the industry, like when there was a move from hardware to software, that everyone said distribution would be disintermediated. But every challenge has been met by distributors and they overcame …

… that hardware-to-software challenge.

CP: Yes, but there’s been consolidation among distributors (Ingram Micro acquired by the Chinese company Tianjin Tianhai Investment, a subsidiary of HNA Group, Tech Data’s acquisition of Avnet, and the acquisition of Westcon-Comstor by Synnex.) There are also new cloud players, cloud distributors.

TC: M&A in every industry rewards the strong. It is not a negative that the big players are absorbing the smaller companies. It is all part of a dynamic industry. The fact that there is so much M&A activity surrounding distributors is indicative of their overall strength and positioning in the market. Investors see value. Clearly, there is financial interest in distributors and potential buyers see where they can benefit financially and otherwise from what they can acquire and are acquiring. It also speaks to where distributors see the IT industry and the market going.

In the latter two examples you cited (Tech Data-Avnet and Synnex-Westcon), the buyers saw complementary skills and services that could help them be more successful more quickly than if they tried to build those capabilities and relationships from scratch.

The fact that the big players are well-capitalized is indicative of their careful P&L and balance-sheet management. The big distributors are an asset to the IT industry and any vendor can grow their business and improve their profitability by leveraging the assets of the strong technology distributors [that] make up the core of the GTDC.

CF: What about new cloud vendors and cloud distributors?

TC: Yes, there are some new cloud vendors and distributors, but with a traditional distributor you can do cloud programs, get you support financially and get you cloud, software and hardware. To me, for the end user, their solutions are mostly multivendor solutions, and a big distributor can get you all of that.

If you’re a born-in-the-cloud company, leveraging distribution should be attractive to them. A lot of the new emerging cloud vendors – I don’t want to say something that will offend them – but they are a little full of themselves …”I don’t need an old distributor” … so, I what I say to them is whether they’re old or new, these distributors can help you improve your profitability and your market reach.

CP: What qualities does should the new leadership of the GTDC have?

TC: The GTDC needs someone who is totally aware of how the market is transforming, how technology is changing and how the world is changing.