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WestconGroup CEO: Synnex Deal Will Unlock Public Cloud Capabilities For North American Partners
WestconGroup CEO Dolph Westerbos said the Synnex acquisition will provide Westcon-Comstor's U.S. partners with better access to public cloud, storage and enterprise computing capabilities.
The Tarrytown, N.Y.-based distributor recently launched a relationship with Amazon Web Services in Canada, Westerbos said, but doesn't have a relationship with Microsoft Azure or AWS in the United States.
"Every one of the Westcon-Comstor partners we deal with today needs help moving to the cloud, and needs tie-ups with the likes of Azure and AWS," Westerbos told CRN. "But we don't have that same relationship in North America with Azure."
But that will all change when Synnex's $830 million purchase of Westcon Americas closes next quarter. Westcon-Comstor partners in Canada will now have a choice between going with AWS or Microsoft, Westerbos said, while Microsoft will become a key enabler for Synnex's customers in the U.S.
"In North America, it's been kind of a slower boat," Westerbos said. "This is where Synnex already has some great capabilities, so I think it will accelerate it in that regard."
Synnex's strength on both the enterprise storage and compute side should also be appealing to Westcon Americas customers, Westerbos said, particularly as it relates to the distributor's strong relationships with Hewlett Packard Enterprise, Dell and Lenovo.
"Although we don't play in that [enterprise computing] space, many of our customers, however, still have requirements for those kinds of solutions," Westerbos said. "They would have, in the past, had to go to different partners, and now they could conceivably go to one."
Little overlap exists among the key markets, customers and technologies of Synnex and Westcon-Comstor, Westerbos said. For that reason, Westerbos said the deal will focus more on leveraging revenue through upsell and cross-sell opportunities rather than taking out costs through a tough internal integration effort.
"We really think this will accelerate growth way more than we could have separately and independent of one another," Westerbos said. "This is going to change the distribution landscape quite significantly here in North America."
Synnex's partners, meanwhile, will benefit from Westcon-Comstor's phenomenal footprint in unified communications, security and networking, Westerbos said, as well as the distributor's tight relationship with Cisco.
"This is, of course, a path for Synnex to go up the stack," Westerbos said. "It's a path they've been on already in a number of relationships that they've had. This just accelerates that."
Synnex is the only North American broadline distributor not currently carrying Cisco, while 32 percent – or nearly $700 million – of Westcon's Americas revenue comes from Cisco.
"Those have not been strengths for Synnex in the past," Westerbos said.
But Westerbos said Synnex's legacy partner base should be appealing to Cisco given the distributor's formidable cloud business and robust public sector business split equally across the federal government and SLED (state, local and education) markets.
"For a company like Cisco, that's very appealing," Westerbos said. "There's a lot of opportunity there."
Many of Westcon-Comstor's other vendor partners will also benefit from gaining access to Synnex's base of commercial and SMB partners. Westerbos said endpoint security solutions from Palo Alto Networks and much of Symantec's product portfolio are targeted toward Synnex's core market segment.
For the Synnex acquisition to be successful, Westerbos said Westcon-Comstor must grow revenue and maintain seamless transactions for global vendor partners like AT&T, IBM and Verizon.
Bringing Westcon-Comstor's capability in value and specialty distribution together with the strength and breadth of Synnex's line card should create tremendous opportunities to leverage new and additional sources of revenue, Westerbos said.
"All of our messaging is around growth," Westerbos said. "Are we growing our existing partner vendors faster than we have done in the past, both on the Westcon side and on the Synnex side? That's our key metric."