Investment Activity Yielding Channel Benefits
TD Synnex‘s Hume said the amount of investment activity in the distribution industry, such as the merger of Tech Data and Synnex to form his company TD Synnex or the Exclusive Networks IPO is very healthy for this part of the IT business.
“[Investors are] more informed relative to the vital link that we play in the entire overall IT supply chain,” he said. ”They understand the value that we bring to the market. And, in addition to that, as they take a closer look at us, they find out that we‘ve run great businesses and provide a lot of value for our shareholders as well.”
From the vendor side, Hume said, other trends are emerging where continued investment is important.
For instance, he cited the fact that a lot of distributors have invested in cloud, as-a- service and other platforms, which means the old ways of vendors focusing on building markets from a specific country perspective have given way to a global focus that distributors can provide.
“We all built our businesses from the base of the country on up,” he said. ”But using cloud as an example, Infrastructure as a Service, what happens now is vendors come to engage at the global level,” he said. ”They want to set a business plan, and then have a one-time deployment, meaning they write their API into a platform and then they would expect us to distribute that capability around the globe.”
Mergers in distribution also bring increased financial capacity, Hume said.
“From my point of view, the investment requirements on distribution get greater and greater every day with these changes in technology,” he said.