Three Questions For Incoming Tech Data CEO Rich Hume

Hume On The Record

Rich Hume, a 35-year channel veteran who takes the CEO post at distribution behemoth Tech Data effective June 6, spoke with CRN about the challenges ahead and the Avnet acquisition.

Hume is taking the reins from current CEO Bob Dutkowsky, who has been at the helm of the distributor for the last 12 years and will now move into a role as executive chairman.

Dutkowsky engineered Tech Data's blockbuster $2.6 billion acquisition last year of value-added distributor Avnet which created for the first time ever a distributor with the best of both the value-added and volume distribution models.

Solution providers said Hume -- who joined Tech Data two years ago as COO after an impressive 33-year career at IBM -- is the right executive to lead Tech Data into the future as partners come to grips with new recurring revenue models.

What are the key IT industry challenges you see going forward?

You've got the cloud, you've got analytics, you've got mobility, you've got security, you've got social media. And all of these things have hit at one time.

I think the challenge for the industry, and therefore the challenge for Tech Data, is to accelerate for vendors and customers these new, next-generation technology categories such that everyone can be more productive or deliver better outcomes for their end-user customers. And so we steadfastly started investing in those categories some time ago with StreamOne, the first capability we set up to serve our customers with cloud capabilities. That said, we knew at the time that it was only the tip of the iceberg. The propagation of these things has really created an incredible opportunity.

What does the Avnet acquisition mean for the services business?

It was hugely important to Tech Data. We thought it was so important that we invested in excess of $2 billion. The price we paid was nearly equivalent to our market cap at the time. We saw it as that critical.

At the end of the day, if you boil it down to what it takes to deliver on the new value proposition, yes, there are some tools involved like cloud marketplaces, etc. But it's all about people and skills. So if you're going to make an impact and advance into these new categories, you need to have the resources that are capable and required to do that. We had a pretty decent-sized value business prior to that acquisition, but we also knew that we needed to have a much deeper bench as it related to skill and capability to get after these new areas. That is what the Avnet TS asset provided us.

What would Tech Data look like today if it had not made that acquisition?

Without that deeper foundation at the bench, it would be a much more challenging road to navigate. Without that acquisition, we'd be short of the skill and capability to participate in that market. And I would say, we would be more of a status-quo type of player as opposed to one that's put itself into position to really accelerate into these new categories.

We know this is what customers require. We know that data and digital transformation sit at the epicenter of all of this transformational change. And we know that there's a couple of key components and building blocks to serve those needs. It is the cloud, it is business analytics, it is hyper-converged technologies, it is around having much more secure environments because things are not served as close to the core as they used to be. Some things are kept in the public domain, some are kept in the core. And even the core is being attacked from all these different threats. You add all of that up, and I think that we would have been more challenged in being able to execute the strategy that was defined by the company previously.