Synnex's Stegner On Distribution In The Face Of Cloud And IT Consolidation

Synnex, And Varnex, Relaxed In The Face Of Big Industry Changes

Bob Stegner, senior vice president of North American marketing and the most recognizable face of Fremont, Calif.-based distributor Synnex -- and its Varnex peer-to-peer solution provider community -- typically invites a lot of attention onstage, like when he emceed the first day of the company's annual Varnex conference dressed as "Star Wars" hero Han Solo.

But in a quieter scene in a makeshift office at the conference, held Nov. 9-10 in Anaheim, Calif., Stegner took a few minutes to talk with CRN about how Synnex and distribution in general are managing the massive changes in IT, including a shift to the cloud and a wave of huge vendor consolidations.

For a look at how Synnex and distribution are reacting to change, turn the page.

When most people think of bringing up the cloud, they think of going to Amazon, pulling out the credit card, and getting a cloud. What's the value that distribution brings to the cloud?

Our main [value] is that we're consolidating all the vendors. There's two things we do. We consolidate the vendors, and we offer credit. That is one-stop shopping. ... You don't have to go out and search. We have it all laid out for you, and you can pick which ones you need versus having to go out and research this and do that.

What are the big changes in Varnex since last year's conference?

Our big thing with [Varnex members] is helping them move to be cloud-oriented. We're looking at how we can integrate [Synnex's] CloudSolv [cloud market] program with Varnex.

We had a panel, and there was an individual, Pete Zarras [founder and president of CloudStrategies]. It was the strangest thing. He's only cloud. And [the moderator] asked him, "Do you sell hardware?" And he said, "No, I really don't sell hardware. But I'm really thinking I should get into it." And all of a sudden it clicked with me: It's protecting turf. All these guys doing hardware who want to get into the cloud, this is just the opposite. Let's just say it's a revelation to me...

If I'm a VAR that's more predominantly hardware and services, and I haven't really engaged that much with the cloud, haven't paid that much attention to it, if a cloud guy comes in and starts working my cloud, and then starts working my hardware, I'm suddenly at risk. There's somebody coming into my house.

We've been so focused on the guys moving into the cloud that no one's been paying attention to the cloud guys moving into hardware and services.

So you, the distributor, have to change your message again?

I don't think we have to change it. I just think we'll have to realize that there's two sides to the fence. So from a Varnex standpoint, these aren't your normal cloud guys. But I think they realize -- and we know that, too -- that the focus on the Varnex guys is more and more on the cloud, and working with them in getting them all prepared.

You and I both know, most people either don't quite understand what the cloud is, or don't know how to get it. [Then] you have the issue with the resellers' sales reps having to take a different business model. It's not like I get one check all at once. But I still have that same mortgage payment. It's no different from what we did with managed services.

The IT industry is going through some big structural changes. HP has officially split in two. Lenovo has made massive acquisitions, and may someday buy a storage company. Dell is acquiring EMC. How does that impact how Synnex works with its partners?

First of all, we have to go with the changes, because they're done. They're out of our control.

There's certain opportunities for us to help them. I think one of the most powerful points of distribution is our own "consolidation." [There are] other things that have to fit in that equation. That's where distribution will come into play. We can go in and say, "OK, you've got the Dell and EMC. What other things do you need to do to make that solution?"

I don't think we have to make so many changes. For instance, with Hewlett-Packard, we've always treated it as two companies. ...

I think you're absolutely, 100 percent correct on Lenovo, that they'll start looking to expand [into storage]. Once again, protecting that turf.

With Lenovo, it seems as much about expanding the turf as it is protecting the turn, because of an enterprise opening it never had before.

Right. We've done real well with Lenovo. With their System x. But we were always really big with that back when it was with IBM. It was huge.

Lenovo has authorized us for everything. [On Nov. 11] they announced we're even authorized for their phones. We have their whole portfolio.

The big deals like Dell and EMC, or Lenovo and IBM, do you guys get advance notice to prepare?

A public company can't [provide advance notice.] With Dell, could there have possibly been, could Michael Dell have made a call to Kevin [Murai, Synnex president and CEO]? I have no idea, because [Dell's] not a public company. But with public companies, you can't. There's no advance notices. I think with the [HP deal], we got the call at 5 in the morning or something. Just because they have to talk just before it hits.

If you look out 12, 18, 24 months, what are some of the headwinds you see may be pushing back against distribution?

I don't see anything pushing back as long as we stay ahead of the curve. And by that, I mean, there's not one single thing which is going to put up a strong headwind, or something that's going to block.

I don't think HP splitting up, Dell buying EMC, is the last of the consolidation. We just have to stay on top of the consolidation. I think as long as we do that, I don't see any one big thing that's going to change that much.

With all the consolidation going on in the IT industry as a whole, what's happening in distribution? Will we see any more consolidation here?

It's never going to change, the rumors. You saw Ingram [Micro] buying [Grupo Acao] down in Brazil. There's always going to be things where companies look to expand. As far as Synnex [goes], Kevin [Murai] would know.

In general, do you see distribution consolidating, changing in any way, going forward?

I think that the thing with distribution, and this is where I think there's such a plus where I see, now being at Synnex for going on eight years, is we're pretty siloed, which makes us pretty nimble. It's some ridiculous number of business units we have, I don't remember the exact number. What I'm saying is, in there, when we were ready to move over into the security [area], like the body cams and stuff, we already had a division doing that. I didn't have to go invent something. I just sat there, and we announced that we have a police chief that [handles] everything for us, and outlines what we should do.

As long as you can be nimble, I don't think it's any problem. You got to be like a little speedboat, not a tugboat.