Changes in the market benefit Tech Data’s unique model: Quaglia

Monday is the kickoff for both the launch in Canada of the full StreamOne e-business platform in Canada and the internal realignment of Tech Data Canada’s sales division along the same lines as the AIS in the U.S.


Joe Quaglia, Tech Data Americas president

These are heady days for Tech Data Canada. As ChannelBuzz reported a week ago from the Fall 2014 TechSelect event, Tech Data is launching its full StreamOne e-business platform in Canada now. Today is also the formal launch date for the realignment of Tech Data Canada’s sales division along the same lines as the AIS (Advanced Infrastructure Solutions) division in the U.S. The distributor is also giddily optimistic about its prospects going forward, as a congruence of multiple factors in the IT industry position it and its Canadian operation well for success going forward.

Tech Data Americas president Joe Quaglia, who was in Toronto late last week to visit Tech Data Canada’s headquarters, reaffirmed the news that the full SteamOne offering, including its application store, will be live in Canada as of the start of November. Previously, only the StreamOne software licensing tool has been available here. The application store in the U.S. has allowed the purchasing of approximately 100 cloud-based, SaaS, and license-based software solutions, and allows partners to provision a customer with one bill which can include multiple solutions from more than one vendor, all white labelled to be billed from the partner.

“Rick [Reid, Tech Data Canada president] has done an amazing job of building an amazing franchise here in Canada, and this launch of StreamOne in Canada will being even more leverage between the U.S. and Canada, which will help us more,” Quaglia said.

The restructuring of Tech Data’s own sales division to better segment the critical AIS space, and which goes into effect at the same time as StreamOne, will also be impactful.

“We have had AIS on the marketing side in Canada for a long time,” Reid said. “November 1 will align the sales division in the same fashion, beginning in central Canada. We want to upscale the support that the VARs need to address the market space. We will stay true to our strategy of enabling our workforce from a North American perspective.”

AIS, the data centre solutions practice which is the heart of Tech Data’s value-added segment, has grown to the point where it is 35 per cent of their total business, and Quaglia said that it will continue to get emphasis because it is the fastest growing and higher margin part of the business compared to broadline.

“We were born on broadline business, and that’s what made Tech Data who we are today, and broadline is still a very vibrant, big part of our business because of our ability to optimize and leverage that core infrastructure and core engine,” Quaglia said. “Because we can leverage that core for our specialty business with a unique value proposition, it gives us a competitive weapon. We launched our AIS business in 2007 and it is our fastest growing part of our business, because of the leverage we get from the core.”

The trend in the marketplace requires such a strategy, Quaglia said.

“More volume is going through distribution today than in past years, and that’s very positive, but there are opportunities in the value space that are constantly being re-innovated, leveraging more software, software defined data centers, and service offerings,” he said. “Doing this we will grow our value added double digit, every quarter, and take market share.”

The massive charges underway in the data centre market now, with the rise of software-defined networking and concurrent rise of the hyperconverged infrastructure vendors, also works to Tech Data’s favour, Quaglia said.

“Complexity creates opportunity,” he said. “The ability to bring better compute models that provide more efficiency require Tech Data and our value proposition to reduce those complexities so they are sellable in the market.”

Quaglia also sees the breakups of HP and Symantec as positive for Tech Data solution providers.

“We are very excited about it,” he said, referring to HP. “We applaud their actions there because we believe HP can be a lot more nimble and flexible as two 60 billion dollar customers than one 120 billion dollar one. Separation can create a lot of opportunity, and they will depend more on the channel to help them.

“Symantec made a tough decision, to give themselves some independence and focus versus trying to compete in all things to all people,” Quaglia added. “They can now bring very focused channel programs independently across the two businesses, so it should be better for us and solution providers than as a single big company.”

Finally, the finalization of the Lenovo acquisition of Motorola Mobility, which turns Lenovo’s North America smartphone presence from nothing into significant, will also ramp up Tech Data’s mobility business, since Lenovo is a key vendor partner. Compared to Europe, where Tech Data’s mobility practice is strong, it has been weaker in North America, particularly in Canada, although efforts were made to begin to ramp that practice up after the Lenovo deal was originally announced early this year.

“We are excited about the opportunity with Lenovo,” Quaglia said. “Things will depend on what their business unit plans will be for the channel as well as retail, and we are in discussions with them about that right now. Our ability to leverage go-to-market capabilities will be very opportunistic for both Tech Data and Lenovo.”

Even if most of the Lenovo smartphones wind up going through retail, Quaglia said channel opportunities will still be enhanced.

“We think the devices are only one component to a mobility channel opportunity for partners,” he said. “You have to extend it to security, content management and user management. The spectrum of mobility for partners goes from the smartphone to security and device management, and that opportunity got much bigger overnight.”