Synnex and Westcon are the latest two distributors to hook up in a trend for consolidation in the distribution industry.
In a pact announced this week, Synnex will purchase the Westcon-Comstor brand in the Americas from owner Datatec, and will become a minor shareholder in Datatec’s Westcon distribution operations elsewhere. Datatec will also take a minority stake in Synnex.
Distribution deals are almost always about scale — adding size. And this deal is no exception. But Bob Stegner, senior vice president of marketing for Synnex North America, said it’s not about doing more of the same.
“The thing that makes it really nice is that there’s not a lot of overlap in the two entities,” Stegner said. “We’re focused on the server/storage infrastructure area, and they’re strong in security, UCC, and networking.”
The deal gets Synnex access to a number of important vendors it did not previously work with, including Cisco, Juniper, F5 Networks, Palo Alto Networks, and Polycom. Of course, that first vendor name is the big one. Cisco had long been a major name missing from the Synnex line card, while Westcon considered Cisco so strategic that it largely rebranded its North American business, promoting “Comstor” from a separate brand for its Cisco-centric business, to part of the company’s main go-to-market brand.
“The great thing is that two sets of customers get access to multiple new vendors,” Stegner said. “That makes it much easier to go do your shopping.”
And, for Synnex, means not sending VARs who might be otherwise loyal elsewhere when Cisco ends up being part of a solution.
Datatec had been looking for a suitor for its Westcon business for most of 2017, and Stegner called its move to sell the Americas distribution business a “recognition of the consolidating distribution market.” That consolidation, it its latest form, kicked off last year with Tech Data purchasing Avnet’s Technology Solutions business, a deal that closed earlier this year.
The Westcon-Comstor focus areas would seem to fit well with Synnex’s practice of building focus areas with the “Solv” suffix around key areas, building Synnex’s expertise around security and network, and adding a particularly “Solv”-friendly area in UCC.
For the time being, the two companies will continue to operate separately, although the Westcon-Comstor brand will be folded into Synnex after closing. The deal is expected to close, pending approvals from various governments involved, by the end of the summer.
“By then, we’ll have the game plan in place to implement everything,” Stegner said. “But the important thing to customers right now is that the Synnex team and executives, and the Westcon team and executives, remain the same, and remain focused on your business.”