CRN Exclusive: Outgoing Tech Data CEO Dutkowsky On Distribution Evolution, The Avnet TS Buy And Why Rich Hume Has Earned His New Role

Making Way For New Leadership

Tech Data this week said CEO Bob Dutkowsky will transition from his current role to become the company's executive chairman in early June, leaving the way clear for Rich Hume, Tech Data's current chief operating officer, to take over as the distributor's new CEO.

With the change in roles, Tech Data becomes the second major distributor this year to go through a major leadership change after Synnex unveiled the retirement of long-running CEO Kevin Murai and the promotion of Chief Operating Officer Dennis Polk in his place.

When Hume joined Tech Data in 2016, he was the company's first-ever chief operating officer and the heir-apparent to Dutkowsky. Dutkowsky told CRN that Hume was not pre-destined to be CEO, but instead had to prove his mettle, which he did.

Dutkowsky also told CRN that Tech Data has seen massive changes in the 12-or-so years he held the reins, the biggest of which being its 2017 $2.6-billion acquisition of Avnet's Technology Solutions business, which gave it the technology and reach needed to compete in the forward-looking markets essential to the company's future.

Is becoming the executive chairman at Tech Data the first step in retiring?

I don't know if retirement is the right word. As an executive chairman, I remain an employee of the company. It's a way to kind of maybe bridge to retirement. That's how I might describe it. But the important role is that Rich takes over complete day-to-day operational control of the company, and my role as executive chair is to help advise him, to bring the institutional knowledge to the table that he doesn't have in terms of the tenure that I have with the company, and to work on projects assigned specifically by Rich where he thinks I might have some value, whether it's a strategic initiative or whatever.

That doesn't sound like retiring.

It sounds like someone whose responsibility has been narrowed dramatically. And I'm comfortable with that. And more importantly, we have a great person to take over as the CEO of this company in Rich, who's trained for 30-plus years for today and is ready to go, ready to lead this company to the next places that it can go. And a guy who generates extreme confidence from our customers, from our vendors, from our employee base, and from our shareholders. So we're thrilled to have Rich in this role.

What are some of the biggest changes you've seen in Tech Data since you became CEO in 2006?

Oh my God. In 2006, Tech Data was a pick, pack, and ship company. And we were really good at the PC ecosystem and picking and packing and shipping products that fulfilled that demand. And over the last 12 years, we've become an end-to-end critical player in the IT ecosystem. Today, Tech Data serves customers with technologies, everything spanning from the living room to the data center and all points in between with the deep skills and domain knowledge in products and services and software and solutions and the things that Tech Data in 2006 didn't even think about.

Can you give me an example?

Our cloud business is a billion-dollar business. In 2006, there was no cloud. Virtualization was not a technology that was on the radar screen. Now it's a huge piece of how a data center works. Converged and hyper-converged infrastructures, the most leading-edge technology companies still hadn't seen that kind of environment as an important one. And now it's critical. Software-defined networks, or anything driven by software, it was a hardware-driven world in 2006. And so all these areas that I'm describing as new and different, each of these the new Tech Data has adjusted to, and has in fact has established leadership in lots of those areas.

So that [Tech Data] that existed in 2006 when I joined has just morphed itself into a very different company, and one that can serve the ecosystem even better than the one in 2006.

How has the role of distribution changed during that time?

In 2006, it was a physical world. It was boxes and products. And today it's both a physical world and a virtual world, a world that's built of services and software and delivery methods that are different and coverage models that are different. Distribution has had to adopt to the innovations happening in the tech space. In particular, Tech Data has adjusted extremely well to these new environments.

But we believe we have even farther to go. That's one of the reasons why Rich was such a perfect candidate to take over the CEO role, because he has deep experience not only in the physical side of the channel, but also in the services and the value-added side.

So as Rich steers the company into these next areas of opportunities, he has experienced them first-hand, and will be able to lead us as we grow those areas.

Tech Data's most important acquisition was last year's $2.6-billion purchase of Avnet's Technology Solutions business. What would Tech Data look like today if it had not made that acquisition?

After the acquisition of TS, we see a company that's more global, including our [new] footprint into Asia. I see a company that has much deeper skills and a deeper bench in terms of its management team. … Our people that work in the field, there's more of them, they have deeper and broader skills. I see a company that has far more to offer to its customers and to its vendor partners in terms of the breadth and scale and capability. I see a company that has much stronger financial capabilities to [evolve]. And I see the industry leader, the company that has set the standard for what IT distribution needs to be, not only for today but for the next decade.

Without TS, Tech Data had the pieces, but combining TS and Tech Data together brought all of those capabilities together, and has become a marvelous platform that Rich is going to lead.

Rich Hume (pictured) was brought into Tech Data in 2016 specifically as heir-apparent, the next Tech Data CEO. How did that go?

It's true that after vetting out a whole set of candidates we brought Rich in. But frankly, there were a couple of things that Rich had to show to the board of directors. One, that he was as good as we thought he was. Check that box, he's better. Two, that he was as smart as we thought he was. Check that box, he's smarter. And three, that he could culturally fit into the company. You know, there's a big difference between IBM and Tech Data in terms of culture and operating environment. And check that box. He did that spectacularly.

The Board [also gave] Rich a set of tasks that they wanted him to manage for the company. And he did those spectacularly. He had to earn this job once he walked in through the door. He knew that coming in, and he executed. That's why we have such great confidence in this new leader we have in our company.

Any golf games on your calendar with Kevin Murai (pictured), who just stepped down as CEO of rival Synnex?

Kevin and I have played golf over the years. I'm not going to tell you how the scores wound up. But we've always had spirited matches on the golf course, and spirited matches in the marketplace.