Tech Data has distributed Seagate’s components business products for years, but the Seagate systems business, which comes from two acquisitions in the last four years, had not previously been available through distribution in North America.
Tech Data, through its Global Computing Components [GCC] solution business, has signed a distribution agreement for the U.S. and Canada with Seagate Enterprise Data Solutions. The agreement will take Seagate systems business to market through distribution for the first time. Tech Data expects that GCC will be able to reduce the lead times required to assemble the systems by a factor of several times.
The GCC business came to Tech Data through the acquisition of Avnet.
“GCC is one of the five speciality brands within Tech Data.,” said Joe Cousins, vice president, GCC Americas, at Tech Data. “Before the components group moved over following the acquisition, Tech Data had a large presence in the components business in Europe, but only a small presence in the U.S., and nothing in Asia.”
The GCC line card is very focused on a handful of product lines.
“In the Americas, seven or eight product lines make up 95 per cent of our revenues,” Cousins said. “There is a heavy focus on storage and microprocessors, especially Intel, AMD, Toshiba, Seagate and WD.”
The extensive business that the GCC has done with Seagate before was concentrated on the Seagate components business.
“We were just distributing their components, reselling their drives,” Cousins said. “We didn’t handle their systems products at all. Then a year ago, they contacted us about this. It took a year to put it together, and has now just gone into effect. Tech Data will now build and distribute their system products, which is a complete net-new relationship.” Both the Seagate Exos and Nytro enterprise SSD systems are part of the agreement.
The Seagate systems business is relatively new, and comes from the 2014 acquisition of Xyratex and the 2015 acquisition of Dot Hill’s OEM business.
“The way Seagate got into the systems business, through these acquisitions, meant that they also bought their business models, which are not as nimble as they need to be,” Cousins said. “Their systems business was done through Seagate directly to their account base. This new deal expands their distribution network of their system product into Tech Data, extending this business through distribution for the first time.”
A key part of the relationship is that Tech Data will do all the building of the configurations.
“One way they could have decided to do it would have been to keep building the configurations themselves and ship them to us,” Cousins said. “They are getting out of that, and trusting their manufacturing to Tech Data. They haven’t done that before. That’s significant.”
It’s also to get the configurations into the hands of partners much faster than was the case under the old system that Seagate was using.
“We just have to mate the drives with the systems chassis,” Cousins said. “We will be able to greatly reduce the lead time for assembly. It used to take them 12-14 weeks. Our goal is to do this in one to two weeks.”
Tech Data will also be able to significantly expand the market for Seagate systems products through their broad reach within North America, Cousins stated.
“We will also be able to expose these products to many more customers than Seagate could.”