Q&A: Tech Data Execs Talk HP-3Com, SMB Credit, Cloud

Page 1 of 2

Four senior executives from Tech Data sat down last week to talk with Everything Channel Assistant News Editor Scott Campbell about the direction of the economy, the availability of small-business credit, and what the Dell/Perot Systems and Xerox/ACS deals might mean for the channel.

At Tech Data's TechSelect Conference in Lake Buena Vista, Fla., Ken Lamneck, president of the Americas; Pete Peterson, senior vice president and general manager of Advanced Infrastructure Solutions; Chuck Bartlett, vice president of Cisco Solutions Group; and Murray Wright, senior vice president of U.S., sales provided insight into what they see for 2010. The following are excerpts from the conversation:

With Dell agreeing to buy Perot Systems and Xerox buying Affiliated Computer Services, on top of HP's deal for EDS last year, should enterprise VARs be concerned about vendors competing with them for services, and do you think the vendors will look to move downstream to sell services to midmarket or small-business clients?

Peterson: I don't see them coming downstream as much. It's difficult in the cost to serve to reach down to the SMB space. Those services still will be predominately for the enterprise. For VARs that sell to the Fortune 500 or 1000, I think there will be some partnership opportunities with the likes of the HPs and IBMs from a service perspective. I think at the end of the day, IBM developed the right blueprint [for selling services]. Look at where they are today vs. five or 10 years ago. They're a very successful company, and that has a lot to do with the services segment. They remain relevant in the enterprise from a CIO perspective and I still think some of that business is partnered with high-end VARs.

Lamneck: If you service a Fortune 500 company and you're a VAR, you probably have to be careful. They will be addressing that space. But are they coming below that? Who's really left at that scale of Perot and EDS? [Increasing their services offering] is a logical outgrowth for those vendors.

And I'll tell you one vendor that hasn't played up the fact [that they look to partner with VARs for services], Cisco. They say we want the channel to be the services arm. Of all the big boys, Cisco hasn't played that up with channel partners.

If I'm a Perot or EDS customer, am I going to trust Dell or HP now to provide me with an objective solution, and if not, does that signal more opportunity for solution providers that play in that space?

Lamneck: IBM seems to have navigated that pretty well. But HP plays in everything [more product categories]. HP's got clients through printers, servers. That's another story.

Bartlett: Cisco goes in with everything [from other vendors].

Lamneck: But they don't sell everything that HP does. It'll be interesting to see.

How well have VARs migrated their businesses to the "new normal." What have they done well and what have they not done well?

Lamneck: They've been really adaptive to the environment. I talked about credit [in the presentation at TechSelect] and how little bad debt we've had during this recession. They've been able to manage their business. A lot have found that if they didn't have a services piece of revenue during the downturn, they'd be in trouble. The things they didn't do three years ago are now important to their ultimate success. Just like distributors, they've had to become nimble to seize opportunities.

Bartlett: The other thing from a solution provider's standpoint is that as technology environments get more complex, how many customer segments are VARs going to be able to address? Can a solution provider have a practice around unified communications and video and print managed services? Or will there be another natural segmentation. The investment just to stay up on the certifications, some can't afford it.

Wright: There are pockets where the VARs are struggling. They need to make decisions on what direction to take business. Look at the history of the market. As the market has gone up, it carried VARs with them because of demand. But it's unpredictable out there right now. The guys here [at TechSelect] are trying to figure out what their next move is. And with banks tightened up, that limits their flexibility on what they can do. They need to make sure they make the right moves with their strategy. I think consolidation will be a factor for the next 12 months. These guys have been through the dot-com bust. The IT industry knows how to figure out how to survive, probably better than other industries right now.

Peterson: The valuation of the business is also somewhat compressed. I'm seeing more partnering with VARs. I might have an EMC practice. You're a strong HP partner. I don't have that investment and I stumble across an EMC customer and I have you support this deal. [At Tech Data], we're acquiring some equipment internally with two different partners that have different skills. I think you'll start to see more of that. We get requests all the time like 'I'm looking for a storage guy, can you help me find them?' Instead of a wholesale acquisition, they're acquiring skills and resources through partnerships.

The TechSelect guys partner well with each other because they know each other. But do you think VARs as a whole will do that, or are they concerned about giving a customer's information to a competitor?

Bartlett: Cisco's been trying to enable global business over the last year. In some cases, a customer might have multi-theater locations and a Cisco partner does not. In those environments, there has been good cooperation in finding good partners with the same specializations in Europe that they do the same for a partner here in the U.S. That's more out of necessity. They don't want to set up the locations and registrations and all that comes with trying to do business in Europe.

Within the U.S., if you're a partner in the desert Southwest who has a customer with a location in Washington, D.C., do you fly somebody out? We've seen good cooperation there. On the other hand, if a partner is midsize to large and they don't have to put a potential competitor in front of an end user, they will service it themselves. There's not one model that fits everybody out in the market, but I've been around this [Cisco] business for four years and I've seen more partnering today than I did four years ago.

Next: VARs Eye The Cloud-Based Market

1 | 2 | Next >>

Tweet

   

More Channel Programs