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GTDC’s Frank Vitagliano: IT Distribution Consolidates, But Still Key To Channel Success

‘I think the vendors will benefit from stronger distributors and ones that make significant investments because the vendors will take advantage of those. I think the solution providers and the MSPs will benefit. And then finally the end-user customer will benefit. So I view it as very positive,’ says GTDC CEO Frank Vitagliano.

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First of all, what is the Global Technology Distribution Council , or GTDC?

GTDC was formed in 1998. So it’s been around a long time. And today we have 21 distributors from North America and Europe included. Obviously the big global players are all included, and there’s a number of regional and or country-based players in Europe. And they represent more than $150 billion in annual sales. So clearly the vast majority of the distribution channel is included. And our role primarily is to educate the marketplace on the services and the value that distributors provide. And so we work very closely with a lot of the members of what I call the IT supply chain: the vendor community, certainly to some degree the solution providers and the MSPs. And we provide education, training, and also really importantly, a forum for input and discussion regarding what’s happening in the marketplace, and how distributors will continue to provide value by leveraging the services that they’ve had in place for a long time, particularly in the area of digital transformation.

What does the overall landscape of the distribution industry look like?

Lately we’ve seen a significant amount of activity. And while there’s always been activity in the marketplace, what we’ve seen recently is very significant. And it started with Ingram Micro being purchased by HNA five years ago now. And then Tech Data bought the Avnet Technology business. Then Tech Data was brought private by Apollo. And now Ingram is being purchased by Platinum. And if that wasn’t enough, we recently had the merger of Synnex and Tech Data, which is a merger, but Synnex is a public company that is actually purchasing privately-owned Tech Data.

These are really significant developments and go beyond basic consolidation. The buyers recognize the role and the value that distributors provide and more importantly recognize the opportunity for significant, longer-term value creation. And that value creation in my opinion, and I think in their opinion, isn’t just, ’Oh, I’m going to consolidate and cut costs.’ It’s more along the lines of, ’We’re going to leverage this tremendous foundation that’s been built by these distributors, huge infrastructures with decades of investment and experience and expertise, and on top of that, we’re going to make significant investments in areas like digital transformation, cloud, everything-as-a-service, et cetera.

And so as a result, I think this is a really interesting time, and honestly, I think it’s great for the industry because it will clearly enable and facilitate gross dollar investments. In other words, the merger now between Tech Data and Synnex will be very positive for the industry because they’ll consolidate their dollars in terms of making big investments in key areas. And I frankly think it’s going to also be very positive for [their competitors who will] be focused on ensuring that they can make these significant investments in key areas.

 
 
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