Leader of Tech Data integration effort with Avnet provides update

The structure of the new company has in the process of being set, and the acquisition remains on track to close in the first half of 2017.

Rich Hume, EVP and COO at Tech Data

Rich Hume, EVP and COO at Tech Data, came to Canada recently for a meeting with the Tech Data Canada team. Since he is also the leader of Tech Data’s integration efforts with respect to the Avnet Technology Services acquisition, he provided ChannelBuzz with an update, and his assessment of where things are going.

Hume, who joined the distributor early this year after spending over 30 years at IBM, emphasized that Tech Data sees the integration of Avnet as critical to Tech Data’s ability to perform in the modern data centre.

“A lot of the tech transitions within the data center space have been underway,” Hume said. “This has seen a move from traditional storage to flash and memory based storage and a move from the traditional data centre to hyper-converged. There are really good high growth opportunities that present themselves from the transition.”

Hume emphasized in particular cloud analytics, security, and hyper-converged.

“There are great growth opportunities within those categories,” he stated. “We’ve been very focused and we see Avnet as providing a great foundation for a better opportunity to get ourselves established in a material way in those opportunities. As we come together, we will be aggressively taking advantage of those opportunities to drive our business. We do have a heritage of strong execution. So we will take the best practices of both organizations and come up with a well thought-out execution engine that brings really high value.”

Avnet was available for acquisition because on its own, it had been having some difficulties coping with these transitions, in particular the disappearance of much of the traditional server-focused element of the data centre. However, Hume said that the core skillsets at Avnet remain first-rate, and that the merger will provide new synchronicities which will leverage those skillsets.

“It varies a bit by geo in terms of what we were doing differently, but globally, Avnet provides a lot of integration services to industry,” Hume said. “Hyper-converged content might well be from multiple vendors, so there is a need for configuration services, which they can meet. They have a really well defined model around those type of capabilities for the market. Even though many of our vendor overlap, they have relationships with specific vendors where they have a very good strength and we might only be moderate. The reverse is also true. It results in an overall expansion of the skillset, so that we will be able to provide more full services.”

Hume, who leads the Tech Data side of the integration efforts, said that everything remains on track to close the deal in the first half of the 2017 calendar year.

“We are hopeful everything will stay on schedule and on track, and are pleased with the engagement of both companies,” he said. “As we get more engaged, we feel more confident. It would be fair to represent both of us as very excited about the future and anxious to get to the close, so that we can bring the best of the very full portfolio together. I see the future as very exciting.”

Hume indicated that the companies have already worked out a new joint management framework.

“We think about our business as two categories – broadline and value, and that internal to the geographic footprint, there is a segmentation of the needs of customers and vendors as being very different in the two categories,” he said. “As a result, we have aligned our management systems to meet those needs. That has been a fundamental part of the integration process – thinking about the structure of the organizational design and how we will run the new company.”

Hume also stressed that both the value and broadline segment would be better off post-acquisition.

“Globally we have an 8 billion value footprint, and this will more than double our value footprint,” he stated. “At the same time, we have a strong SMB footprint today with our partners, and we will accelerate our current partner ecosystem. We fully intend to not only maintain but continue to improve the services we provide to both segments. We do a good job managing them both today, and I think we have demonstrated we know how to serve both quite well.”