8. Channel Consolidation: The Distribution Landscape Disrupted

In 2020, a number of multi-billion-dollar mergers and acquisitions reshaped the channel landscape – especially amongst the IT industry’s leading distributors.

On Sept. 1, distributors Synnex and Tech Data completed their $7.2 billion merger to become TD Synnex, the industry’s largest IT distributor with annual revenue of nearly $60 billion, 150,000 customers and 22,000 employees. The merger deal, disclosed in March, was approved by Synnex shareholders in June. (That came just one year after Tech Data was itself acquired by private equity firm Apollo Global Management for about $6 billion.)

Tech Data CEO Rich Hume leads the newly combined company as CEO while Synnex President and CEO Dennis Polk is executive chairman of the new company’s board. Hume touted the advantages of the merger and potential benefits for solution providers, including having more resources to invest in developing new services and solutions for channel partners.

In December Sammy Kinlaw, senior vice president of sales communities for North America at TD Synnex, said the Synnex Varnex and Stellr and Tech Data TechSelect partner communities would remain separate entities under an umbrella organization called CommunitySolv.

With the merger TD Synnex surpasses Ingram Micro as the IT industry’s largest distributor. Ingram itself, meanwhile, was acquired on July 7 by private equity powerhouse Platinum Equity for $7.2 billion, ending four years of ownership by HNA Group, a massive Chinese conglomerate. The deal, disclosed in December 2020, came a little more than five years after the Chinese company bought the distributor for about $6 billion.

In October Kirk Robinson, Ingram Micro’s chief country executive for the U.S., speaking at The Channel Company’s Best of Breed Conference, said the distributor was making investments to help solution providers grow. Those include planned expansions in the public sector market, and investments in advanced solutions (security, data center, IoT and professional services), cloud services and the consumer business. (That same day Ingram Micro disclosed the acquisition of cloud data center consulting company CloudLogic.)

In December Ingram Micro announced a $3 billion deal to sell a large piece of its Commerce & Lifecycle Services business to France-based CMA CGM Group. The sale raises capital that Ingram Micro can devote to expanding its core technology distribution and Ingram Micro Cloud and Cloud Blue businesses.

The big changes among the major distributors were only part of a wave of consolidation sweeping through the channel in 2021. Most notable was CDW’s $2.5 billion acquisition of Sirius Computer Solutions, announced in October and completed on December 3, that creates a $20 billion solution provider with 13,000 employees.

In September systems integration giant Accenture, which has been on an acquisition binge in recent years, said it made $4.2 billion in acquisitions in the company’s fiscal 2021 (ended Aug. 31). Also active on the acquisition front were Computer Design & Integration, which acquired fellow solution providers High Availability in January and Candoris in August; Converge Technology Solutions, which bought Dasher Technologies – Converge’s 19th acquisition in just three years; and NWN, which acquired Carousel Industries in May, bringing together two Cisco Gold partners to create a $1 billion cloud communications powerhouse.