The Tech Data Blues
For years, the Clearwater, Fla., company has been the gold standard for operations and execution in IT distribution. Much of the credit for that goes to Tech Data Chairman and CEO Steve Raymund, one of the last pioneers of modern IT distribution still in the business. Raymund succeeded in building the second-largest computer products distributor in the world through an almost obsessive focus on day-to-day operations including costs, pricing, sales strategies and vendor relationships. Today, though, Tech Data is far from the top of its game. Last week, seven months into a search for a new CEO that was slated to be completed in three to six months, the company reported a net loss of $155.5 million for its second quarter ended July 31 on an anemic 2.7 percent increase in sales to $4.9 billion.
Many VARs say they see more aggressive and responsive sales organizations and better communication and execution from Ingram Micro and Synnex. In addition, they said both Ingram and Synnex are stepping up to support them with higher value-added solutions visions. One top executive for a large regional solution provider said his share of distribution purchases through Tech Data has dropped to 10 percent from 40 percent over the last several years. "They have lost their way," he said. Another loyal longtime Tech Data customer said he has seen a falloff in Tech Data's crisp responsiveness. He said both Synnex and Ingram are providing special bid quotes faster than Tech Data. "Sometimes it's hours faster, and sometimes it's days faster," he said. "There is a lot of red tape you need to cut through to get information from Tech Data compared with the other distributors. They seem to have a lot of operations people and nobody who can make a change."
When you look at what is commonly referred to as the Big Three broadline distributors, many solution providers now view Tech Data as No. 3. That's not a position the company is used to being in. Raymund, who is not giving up the chairman post, and whoever he and the board hire as CEO have some very heavy lifting to do to earn that gold standard distribution label back. The question remains: Just who will fix the problems at Tech Data, and does that person have what it takes to get the job done?
Are you feeling the Tech Data blues? Let me know at (781) 839-1221 or via e-mail at [email protected].