Synnex’s Michael Urban: 5 Bold Statements On The Synnex-Tech Data Merger
Michael Urban, president of worldwide technology solutions distribution at Synnex, talks with CRN about the merger of the distribution giant with behemoth Tech Data and its impact on competition, the programs, and the people on both sides.
Staying Calm About Distribution’s Biggest Merger
Concerns about changes in the competitive environment and about impacts to specific market segments are likely overblown, according to Michael Urban, president of worldwide technology solutions distribution at Synnex.
Urban, a former Tech Data executive who joined Synnex over two years ago, this week talked with CRN about the historic merger between Synnex and Tech Data, which will create the world’s largest IT distributor with an annual revenue of $57 billion and 22,000 employees, and said there will still be plenty of competition not only from the soon-to-be-second-largest distributor Ingram Micro, but from a host of smaller distributors worldwide.
While Urban declined to explicitly say that Synnex is better at some program or process, he did hint that when combining the best of the two companies there are a couple places where Tech Data’s staff, none of whom are slated to be laid off, will benefit from what Synnex has built. And vice-versa.
For a quick look at some of the changes to expect, and what not to expect, click through the slideshow.
On How The Merger Won’t Decrease Competition
If you go to Europe, there’s a heavy, strong competition ongoing with Ingram, with Also, Arrow, with Westcon-Comstor, with Esprinet. There are still many, many distributors in the market that compete. Of course, Ingram will fight. Esprinet will fight. And Westcom will fight.
In Asia, there are hundreds of distributors. Highly competitive market. Latin America, many distributors. Many small ones. But they have in their markets the right position and the right size. Heavy competition there.
And now of course, we come to the U.S. and to Canada. Similar thing. There‘s one big distributor you just interviewed (D&H). That’s a $5 billion company. And they like to grow, and they believe they have a lot of opportunity. I get that. And they will. And our neighbors in Greenville. (ScanSource, based in Greenville, S.C.) They also will grow, and they‘ll have their focus and they will take business for sure.
My point is this: The market will grow in the next years. I‘m very positive about this year and the next and beyond, because digital transformation is accelerating over time, but with the COVID situation, even more. ... The pie will grow bigger. And, of course, we’d like to have an important part of that. And we’d like to grow with the market and even beyond.
On Comments From D&HThat The Merger Means More SMB Business For Them
I would say time will tell. Synnex is a very strong SMB partner in the market, and Tech Data is also in the SMB space, but it is more in the enterprise side. I agree with that. But we‘d like to play an important role in the SMB space. SMB is very important for us, and is clearly on our line card. This is not new for Synnex. It’s in our genes. And we continue on that path.
But again, [D&H] will find their space, I‘m absolutely sure about that. And they will grow. Again, the market is getting bigger. There’s more potential, and everybody will find their space. And that’s good. ... We will be big competitors in the market. But we will be fair competitors.
On Bringing Synnex’s Nimbleness To Tech Data
There are two things here. One is the people side, and one the system side. You can set up a system, but also you have to change the habits of people. For many years, I was driving the digital transformation journey. With the digital transformation journey, number one is people, habit, change. It‘s not the system. You can build nice systems and they work great, but it’s all about people and change. I see exactly the same thing here. So if people use our system the day after the merge, that would mean people have changed. Maybe even the Synnex people will have changed a bit, because they are learning from the Tech Data side because [Tech Data also does] some things nice. So there are things we can combine here.
Again, the system side will drive the decision process, and the system from Synnex is a very agile system built on the distribution needs of every day. If we jointly decide to use Synnex’s customer information system, I think that the Tech Data guys will say, ‘This is really great.’
On Making Sure The Merged Tech Data And Synnex Doesn’t Lose Employees
Some people will get scared and wonder what this means for them. The first reaction is, ‘Ooo, my job, is this job secure?’
What I‘m saying is, the job is secure. The most important point is that everyone understands, and we said this during our town hall this week, that we’d like to keep every job because we will change in the digital transformation journey. Some people may have a different job tomorrow. But we need them. We have people in the company, and there’s a reason: We trust them, and we work with them. And if they believe their job will disappear, fine, but go with us and find another job within the company. On this digital transformation journey, there are so many changes in the market. We are big in digital transformation. We have invested a lot of money in the last couple of years, and we continue to invest, but we haven’t taken any people out. But we move people to different jobs, we train them with our own training centers, and this is something we can bring to the Tech Data side. And we bring our people to the next stage. We do promotions within the organization.
On Bringing Together The Varnex And TechSelect Partner Communities
The reality in the world today is that it‘s very difficult for an SMB or medium-sized VAR to build up a complete solution for the end customer. But the end customers are asking for everything, right? Many end customers are asking for a public cloud solution, a private cloud solution, collaboration, endpoint devices, security, and so on. For many of our partners in the Varnex group, it’s very difficult to [offer] all the solutions. So what we said is, we can bring the Varnex members together in a trusted environment so they can complement each other and can go jointly to those end customers. Of course, one of the [channel partners] has the lead.
We as Synnex ensure that no one tries to steal a customer. It‘s a community going to a customer and jointly selling a solution.
If you look at TechSelect, it also comes more out of the marketing side. I think it has changed as well over time. But I‘m not sure that they are where we are now with Varnex. [But there will] be a good combination of both, bring the TechSelect and Varnex ideas together over time.