Distributor Tech Data has acquired the half of its TDMobility mobile device business previously owned by a joint venture partner, and it is now looking at how to scale that business to meet the growing needs of solution providers looking to provide customers with mobile services.
TDMobility was founded in 2011 as a joint venture with Miami-based Brightstar and is Tech Data's platform-as-a-service offering that connects solution providers to carriers and other parts of the mobility ecosystem.
Joe Quaglia, senior vice president of us marketing and president of TDMobility, told partners the TDMobility business was launched about two-and-a-half years ago with a total of 20 channel partners, but it is now the largest mobility line card in the distribution business, with offerings from the device to activation.
By buying out its joint-venture partner Brightstar, Tech Data can better scale its mobility offering to solution providers, Quaglia said. "But as far as you know, business will continue as usual," he said.
Solution providers can continue selling low-margin mobile devices if they want to, Quaglia said. "But you could get up to 40 percent and 50 percent margins if you sold an activatable device," he said.
Mike Kiani, CEO of CompuDirect 3000, an Irvine, Calif.-based solution provider and TDMobility partner, said his company has received a lot of resources and information from the program to help it provide for the mobility needs of its midrange customers.
"I expect Tech Data's acquiring the rest of TDMobility will help with issues like pricing," Kiani said.
Kiani said CompuDirect 3000 also works with Ingram Micro on mobility issues, primarily related to services providers and the BlackBerry line. "But TDMobility has a lot more resources," he said. "We're seeing a lot more money and effort get involved through TDMobility."
Quaglia told CRN that the acquisition of the rest of the joint venture from Brightstar is a big deal for Tech Data.
"It gives us the opportunity to integrate TDMobility into Tech Data," he said. "It lets us take TDMobility to the next level. We get more control, better opportunities, and more speed and agility. And because we're independent, it lets us move in any direction we want. We don't have another partner directing the vision."
NEXT: Tech Data Looks Forward To Increased Mobility Business Without Brightstar
Without Brightstar, which distributes wireless devices and related mobile services, Tech Data also gets a better and more direct relationship with its carrier partners, TDMobility's Quaglia said. "In the U.S., we stand between the OEMs, carriers and resellers," he said. "When you have such a model, you need to be more productive."
Going forward, Tech Data will be looking to expand its partner base from the approximately 1,000 solution providers it currently serves worldwide, Quaglia said.
"The world is so much larger than 1,000 partners," he said. "We're constantly recruiting partners."
Quaglia said the ability to ramp up services to partners will be important as more devices become "activatable," which is his term for devices that require carrier activation before they can be fully used.
"A lot of devices are becoming activatable," he said. "Cisco has wireless routers with 3G or 4G technology that need activation."
Tech Data is also helping partners with BYOD and mobile device management issues, Quaglia said.
"A lot of devices are coming into businesses," he said. "Imagine an IT director looking to manage and secure those devices. And more mobile devices create demand for more servers, storage and management software to create the needed environment. And this doesn't include the mobile apps. The real cool mobile apps not invented yet will drive a lot of sales for our partners."
Brightstar in October said that Japan-based SoftBank would invest $1.26 billion in acquiring a 57-percent share of Brightstar. SoftBank last year also acquired a 70 percent stake in Sprint, making SoftBank a major part of the U.S. mobility market.
PUBLISHED NOV. 11, 2013