Tech Data Goes Digital

The move means that Tech Data will place a stronger focus on tying in training, marketing, service and support around a new line of digital-related products, while continuing to drive profitable PC lines, said Tech Data CEO Steve Raymund at Thursday's Raymond James Supply Chain Conference in New York.

"As more products enter the digital world and plug into the home and business segments, it opens up areas that didn't exist two or three years ago," he said. "We're not downplaying our PC business, we're just shifting to higher, greater growth areas."

The Clearwater, Fla.-based distributor is still deciding how to bring the digital strategy to the market. Over the past six months, it has been developing a Specialized Business Unit focused on digital home and business solutions but has not announced a launch date. Sources close to the development of the unit expect it to roll out in March.

Tech Data has yet to choose its full digital product lineup, but it currently carries digital-related products from a number of vendors. Raymund said the company has seen strong sales in cameras, projectors, plasma screens, digital televisions and other products from such companies as BenQ and ViewSonic.

Raymund's announcement comes as more vendors and solution providers are developing their own strategies on how to successfully serve those markets. D&H Distributing has an established digital home practice, and Ingram Micro, Santa Ana, Calif., is planning to get into the market in the coming months.

"We've aligned ourselves with the right vendors and partners," said Dan Schwab, vice president of D&H, Harrisburg, Pa. "We feel very well positioned because our reps have been doing this for a year."

Benny Lorenzo, an analyst with Aspira Capital Management, Fort Lee, N.J, said Tech Data's shift in focus makes sense and that the channel should expect other vendors to begin chasing higher-growth opportunities.

"It's a good move for them. They're trying to find new products and markets to offset what's not growing," he said. "These guys are hungry. They're morphing to capture additional business."

Jay Kishor, president of California Integrated Solutions, a Tech Data customer and solution provider in Diamond Bar, Calif., has seen sales of conferencing, plasma displays, and other digital solutions into businesses grow, but he has yet to enter the home market. A targeted program from Tech Data could help him get started, he said.

"We plan on looking into it but it seems to be more of a headache than anything," he said, adding that with the right hand-holding, he'd be willing to give the market a try. "Any support from Tech Data could help us move in a direction we never thought we'd go before."