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CRN Exclusive: Tech Data CEO Rich Hume On The Stock Drop, Advanced Solutions, Services And Cloud Growth

Tech Data CEO Rich Hume says the distributor is focused on driving more advanced solutions sales after high growth in the low margin endpoint business dragged down margins.

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Driving More Advanced Solutions Sales Growth

Tech Data CEO Rich Hume says the distributor is focused on driving more Advanced Solutions sales after high growth in the low-margin endpoint business dragged down margins.

"At the top level, we'll be very focused as a management team on selling more Advanced Solutions as opposed to the endpoints," said Hume. "Obviously, we're going to service both. But to the extent we can shift our sales into more advanced, that's very helpful. And then even within the endpoint portfolio, spending more time on things that have better profit outcomes is a good way to think about it."

Hume's comments came after Tech Data Thursday reported a 10 percent increase in sales to $8.89 billion for its second fiscal quarter ended July 31 – well above the Wall Street consensus of $8.73 billion.

Although net income jumped to $77.7 million, or $2.01 per share on a non-GAAP basis, it was 10 cents per share below the Wall Street consensus of $2.11 per share. That led Thursday to a 14 percent drop in Tech Data shares to $76.26.

During the company's quarterly financial conference call, Hume introduced a new Global Business Optimization (GBO) plan aimed at creating a more agile and nimble worldwide distributor.

The GBO, which comes just three months after Hume took the helm of the Clearwater, Fla.-based distributor, is expected to result in annual cost savings of $70 million to $80 million in the next two years with approximately half of that reinvested to accelerate strategic priorities, while the remaining savings will fall to the bottom line to improve Tech Data's profitability.

 
 
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