Q&A: Synnex Bets Big On Cloud Computing, Managed Services

Once considered a price leader in two-tier distribution, Synnex is now making a name for itself around managed services and cloud computing.

Synnex for many years was known as a thorn in the side of leading broadline distributors Ingram Micro and Tech Data, often winning business by providing VARs with the lowest prices on hardware. But the company has transformed itself in recent years, building up its services business while also growing Varnez, Synnex's exclusive SMB reseller community that competes with rival groups like Ingram Micro's Venture Tech Network and Tech Data's TechSelect.

Now the IT distributor has launched new efforts in the managed services and cloud computing markets, and Synnex has even jumped into the mobile applications development business. CRN caught up with Synnex CEO Kevin Murai at the distributor's recent Varnex Spring 2011 Conference with Boston, where the chief executive talked about how Synnex is leveraging mobile device growth and explained how he sees distribution's role in the cloud ecosystem. Here are excerpts from the interview with Murai.

You've had Varnex up and running for a few years, and the community seems to be growing. Where do you see Varnex today?

Right from the beginning, we said Varnex was not going to be a "me too" kind of SMB VAR community. And I think where we've differentiated ourselves is really the way we view the market and the underlying strategies that we have on attacking growth areas, as well as the alignment we have with vendors' growth strategies. I think that's why we get a lot more vendor attention and support today. I can't remember a conference where we've announced so many big things. And it's not just announcing things, but also really talking about them with VARs. For example, we've talked about our view on the cloud and the role we believe the channel should play and what we do as a distributor as far as cloud enablement goes. We've also talked about what we're doing in mobility and how we're attacking or trying bridge the inherent gap on integration from a commercial standpoint.

We also gave a demo at the show on our new Synnex RenewSolv platform that we're going to be rolling out to our customers. That really is going to be a game changer. It's a cloud-based business platform where our customers can run their entire renewals business, whether it's warranty renewals or software license renewals. In addition, we also talked about managed services and our partnership with Level Platforms [to offer Synnex customers a suite of SMB-focused services to resell]. So there's a lot of exciting things going on.

How do you see your managed services play adding value?

There are a couple of key ways. First, for those VARs that have not had a managed services practice, we're providing them an easy way to get in and get their feet wet. The second big benefit is, by deploying RMM (remote monitoring and management) tools it provides visibility into a significant part of the customer's IT environment. And our customers that leverage that data and use it wisely do it not just to run their managed services business but also use it for net new sales opportunities for, say, PC upgrades or other kinds of hardware refresh opportunities or even virtualization projects. So that's where the real power comes in -- the power of information that they don't have today.

Next: Synnex's Play In Cloud, Mobile Applications

Where do you see Synnex fitting into the cloud ecosystem?

To start off with, there's two categories. First, there's private clouds; the deployment of hardware and solutions for private clouds is probably more like what the channel is used to doing today. Obviously, there are new processes and business models that have to be understood, but beyond that, it's really more a hardware solution. But then there is the public cloud side, which is where we see growth opportunity happening over the next two years or so and probably changing the whole face of the small business market. Today, you have a number of different choices on different solutions that you can deploy in a hosted fashion -- but they're not integrated. So today you can sell hosted Exchange servers, hosted desktops, data storage, backup and recovery, etc.

But when you want to deploy a complete vertical solution for, say, health care, that has to be fully integrated. So we believe that's one of the roles we can play as a distributor -- to navigate through the growing sea of different service providers, whether they're infrastructure, platform, or software players, and to select the ones we think are best of breed and then help integrate them together into a meaningful solutions. And we see ourselves playing that role as we identify and target key growth vertical segments one at a time. There are going to be some platform-based solutions across a number of verticals, and we actually announced our first one [at VARnex], CloudSolv UC for unified communications. That's a fully integrated solution that our customers can now sell today, with the sweet spot being 50-plus seats. And that's just the tip of the iceberg; we'll continue to deploy these types of end-to-end solutions as the months go on.

Looking at the Varnex membership, do you feel these kinds of SMB-focused resellers are truly ready to start developing a cloud solutions practice?

Well, we're seeing a broad spectrum right now, from VARs that totally embrace cloud computing and want to build business around it to the opposite end where VARs are being driven by fears that the cloud will cannibalize their existing businesses. But regardless of the driver, whether it's coming from a positive place or from a threat, I don't think anyone is ignoring. I think they all need to understand it and figure how they're going to play. And that's really where I think Synnex can help. We're not coming here with all the answers, obviously. Cloud computing is still in its infancy, and it continues to evolve and the entire ecosystem continues to build. And so there are going to be partners that exist next year that don't exist today.

That said, we have put a stake in the ground in terms of what we believe our model should be and the overall channel model should be. We have been making real investments in money and people to create the kind of platforms and capabilities that our customers need to participate in the cloud.

In terms of cloud computing, there's obviously been an explosion of mobile devices and capabilities, and now there's seems to be a lot of interest today from the channel in developing mobile applications. Does that play into your cloud strategy?

Yes, absolutely. Ultimately, the view we have of the cloud, longer term, is where the content and applications will reside and be processed. And what you'll end up with is a lot of devices that will access in one fashion or another, whether it's smartphones or tablets or netbooks. The interfaces and applications have to be built today to not just properly access but also securely access all of that content and applications. Today, we have hundreds of thousands of applications that exist for consumers, and they're all sort of ad-hoc. But once you step into the commercial world, it's a very different story and in fact, it's not a one-size-fits-all world either. You're going to have specific applications designed for specific end users. But we believe that in order to really drive significant adoption of mobile devices into the commercial space, there's a gap that needs to be bridged in terms of true integration in ERP and business workflows. And that's why we invested in our mobile applications development team. Night and day, they write applications for our customers, our vendors and even Synnex, too. And it's all intended to drive true commercial applications on mobile devices.

So a couple examples of what we've already done is things like develop applications for real-time inventory management, placing orders, tracking orders and even scanning product bar codes. Those have been available since last November. We also wrote a number of conference management applications for events like Varnex so you can access and personalize your agendas and get all the details about the various sessions. Actually, at HP's APC event a few weeks ago, they had a similar application -– and we wrote that for them. There are true commercial applications that we're writing, and that's where it all ties in because there's already a lot of consumer applications out there but from a commercial standpoint, there's a big gap.