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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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What happened with Endpoint Solutions?

The gross margin profiles in the Advanced Solutions business are much richer than in the Endpoint Solutions business. And so, despite the fact that there was growth in both segments, there was an overwhelming amount of growth in the endpoint business. If you have a larger percentage of your business in that space with the lower-margin profile, then the overall gross margin actually comes down. It's that phenomenon. The fact that the predominance of the growth was within endpoint.

Obviously, the question is, well, what would you like to see? You'd like to see a bit more balanced growth because then you could take advantage of both segments and then have the benefit of the margin opportunity within the advanced segment.

What's driving the big Endpoint Solutions sales growth?

Look at the PC titans in the industry, they're pretty hot right now. HP Inc., Lenovo, Dell, they're all driving some pretty significant growth. I can only give you one person's point of view. I speak with a lot of investors and analysts. But I think it starts with the macro picture of the global economy being strong, and the U.S. economy being strong. [You] end up with more jobs and more people. And with more jobs and more people, there's more technology required to have those people do those jobs.

 
 
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