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Tech Data CEO Rich Hume On The $5.4 Billion Deal That Will ‘Accelerate Our Future’

‘They have the ability to invest organically as well as acquisitively in Tech Data. So this is a scenario where we have the fortune of potentially being acquired by someone who has the opportunity to really accelerate our business moving forward,’ Tech Data CEO Rich Hume says of the deal to be acquired by Apollo Global Management.

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There’s talk in the market that a lot of distributors are kind of running away from distribution in terms of how they run their business. Do you see this as Tech Data running away from distribution or running towards distribution, within the context of the acquisition by Apollo?

First of all, when you take a look at the traditional category called ‘distribution,’ then you map the last couple of years of the distribution growth rates to the aggregation of all the vendors, the distribution growth rates are either equal to or marginally better.

From the information I look at, there hasn't been any backing away from distribution. In fact, if anything, there's a case to be made that it's a larger percentage of the total pie. That's No. 1. No. 2 is the value proposition for Tech Data is absolutely changing, from maybe having a reputation in the past of physical IT distribution to now one towards solutions aggregation within the IT segment. This comes in many flavors.

I'll give you a couple of examples. Within our cloud marketplace StreamOne, we’re well under way with providing tried and tested solutions—things like Microsoft Azure with Red Hat, or Microsoft Azure with VMware, or Microsoft Azure with Microsoft's Small Business Server. There's a major shift, if you will, from the customer perspective coming forward to having a desire [for us to be] more of a solutions aggregator.

And this even transcends itself into our PC ecosystem business where there's a requirement and initiative that's growing around Technology as a Service, aggregating PC ecosystem content, and providing per-month pricing for that aggregated content. So I think that from my point of view the traditional IT distribution remains a major participant within our ecosystem. However, we at Tech Data are transitioning our value proposition more towards solutions aggregation.

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