TD Synnex CEO Patrick Zammit: Four Megatrends Impacting The Channel

The IT market is evolving fast, but channel partners and their distributors need to evolve faster in order to not be overwhelmed by four key megatrends that will affect every company, TD Synnex CEO Patrick Zammit says.

Four “megatrends” are currently impacting the IT channel, and solution providers need to evolve to stay ahead of the resulting changes, according to TD Synnex CEO Patrick Zammit.

Zammit, speaking Friday to an audience of solution providers who attended the distributor’s TD Synnex Inspire conference in Greenville, S.C., said that when the channel is involved, IT adoption is better and faster.

“But the market is changing,” Zammit said. “It continues to evolve very fast.”

That evolution is evident in four megatrends, which TD Synnex sees as impacting the channel, Zammit said.

“These are all opportunities, but we need to transform a little bit to make sure we are relevant,” he said.

1. Vendors Rationalizing Go-To-Market

The first megatrend is vendors looking to rationalize their go-to-market focus, Zammit said.

“Vendors are continuing to update and optimize their go-to-market, looking at the number of resellers they want to serve, directly looking at the number of distributors they want to keep,” he said. “But also their requirements from the resellers are evolving. They require more specialization from a technology standpoint and vertical market standpoint. They require sellers’ presales resources be certified. They are looking for professional services.”

This is putting some pressure on TD Synnex and its value proposition and business model as well, Zammit said.

“We are very clear,” he said. “We are not a broad liner. We are a collection of specialists. The way we want to be seen in the market, the value props we want to bring to you, is that for every technology we take to market, you see us as an expert, a specialist. And we are going to enable you thanks to our programs because of our pre-sales resources, solution architects. In some cases, we also have some professional services practices to support you. This specialization should help you move to what our vendors are expecting from all of us.”

2. Hyperscaler Marketplaces

The second megatrend is how the hyperscaler marketplace is gaining more and more traction, an $87 billion market which some solution providers see as a scary threat while others see as an opportunity, Zammit said.

“At TD Synnex, we said it’s a new go-to-market,” he said. “We need to play with it. We need to take advantage of it to your benefit, and very rapidly.”

TD Synnex is helping partners on a couple of fronts, Zammit said. First, the distributor is working on private offers with the hyperscalers and the vendors because the end users often have credits with the hyperscalers and so their CFOs are probably telling them to use those credits.

“That’s something we need to live with,” he said. “If the vendors enable the private offers on the marketplaces, we have a good chance that the channel gets rewarded. So we are lobbying to enable it. We are also streamlining from an operations standpoint the way it works to make it easier for you and for the vendors to see the hyperscalers are happy with the setup.”

The second opportunity coming from these hyperscaler marketplaces is connecting our marketplace to theirs, starting with Microsoft, Zammit said.

“When you come to us now and you say, ‘I want to buy this IT solution” and it is not on our line card today, thanks to this model, we can very rapidly add it to our portfolio,” he said. “We don’t have issues around onboarding, which exists at every distributor, because basically it has been onboarded by the hyperscaler. The Ts and Cs (terms and conditions) are the one from the hyperscaler. And for us, in a few clicks, we make it available.”

3. Securing The Install Base

The third megatrend, one that Zammit said he is seeing more and more, especially in the last two quarters, is that vendors expect their channel partners to help secure their installed base.

“We have discussions on what the renewal rate should be and how to optimize it, but more and more the hardware vendors are expecting us to secure the install base or upgrade the install base,” he said. “And so we’re working on developing a renewal factory to support you and to help you basically do that job with your end users. That’s very important. I think that that’s going to be a key differentiator in the future for you if you can demonstrate to the vendors that you secured their installed base with us supporting you.”

4. AI Time Of Inference

AI is here to stay, if for no other reason than the hundreds of billions of dollars being invested in the technology, Zammit said. And for the enterprise space, it’s important to remember that inference is a big part of that, he said.

Zammit listed three use cases that are going to have a lot of traction in the enterprise:

The AI factory, which Nvidia defines as a specialized computing infrastructure designed to create value from data by managing the entire AI life cycle from data ingestion to training to fine-tuning to AI inference—”Many end users have done at least the proof of concept and proof of value, and are moving towards implementation,” he said. “The first step for them is to implement the AI factory.”
Agentic AI—”The future of the workforce is hybrid,” he said. “It will be human, of course, but also agents. Canalys just issued a study [which estimates] the potential for the channel is $267 billion of opportunity implementing agentic AI in the enterprise space [by 2030].”
AI security—”Security for AI is going to be a big focus,” he said. “Why? Because companies cannot afford to have data leakage or IP (intellectual property) leakage. How are you securing your AI factory, your agentic AI? How do you make sure that coworkers in the enterprise are not used by getting access to data they should not get access to. Very important.”

The Omnichannel

TD Synnex is committed to what Zammit called the ‘“omnichannel,” which he said combines human interaction with agentic AI. Because channel partner teams require 24x7 availability, the distributor has developed digital platforms optimized for their use.

“You heard yesterday we are launching PartnerFirst,” he said. “What is it? Until now, you had to work with several specialized digital platforms with us. [Now] we’ve brought everything in one portal to unify your experience and make it much simpler and more effective for you to use. The other thing we’re going to do is to continue developing digital services leveraging the data we have.”

TD Synnex wants to become an AI-first company, Zammit said.

“Basically what we want is to put AI at the core of our operating model,” he said. “So we’ve launched the initiative. The AI factory is already in place, as far as we’re concerned, and we are now in the phase of defining how we are going to drive the adoption of AI and AI agents in the company. Expect us to improve your experience thanks to that, and to streamline our processes as we continue to leverage AI, agentic AI. But for us, it’s a relationship business. People matter. Relationships matter. Trust matters.”

Jaime Gmach, CEO of Evolving Solutions, a Hamel, Minn.-based solution provider which Friday received TD Synnex’s Collaborator Partner of the Year award, told CRN that Zammit was spot on when he talked about the four megatrends and their importance to partners.

“The one thing that he said that is the most appealing to me is the dependence of business users upon the channel, more now than ever,” Gmach said. “I think all four of the megatrends are accurate. And it’s the hyperscaler megatrend that really stands out.”