Tech Data executives said the breadth of their portfolio and geographic footprint is unmatched by other distributors following the $2.6 billion acquisition of Avnet Technology Solutions.
"The scale of what we've done versus what Synnex and Westcon are doing are at completely different levels," said Bob Dutkowsky, Tech Data's chairman and CEO. "So when the vendor thinks depth of skills and global footprint, they don't compare Synnex-Westcon to Tech Data-TS [Technology Solutions]. It's on a completely different level."
Dutkowsky likened Synnex's September acquisition of Westcon-Comstor's $2.18 billion North American and Latin American businesses to Tech Data's November 2012 acquisition of Specialist Distribution Group, a $1.75 billion broadline and data center distributor operating in the United Kingdom, France and the Netherlands. In contrast, Avnet's TS unit did business in all of the world's major geographies.
Tech Data is uniquely positioned today with an IT distribution market share of greater than 30 percent in both North America and Europe, according to Rich Hume, the Clearwater, Fla.-based company's executive vice president and COO.
Although Synnex holds a 10 percent stake in the $2.35 billion Westcon International business – which operates in Europe, the Middle East and Africa, and Asia-Pacific – the Fremont, Calif.-based distributor currently only has a direct presence in North America, Latin American and Japan. Synnex declined to comment for this story.
Tech Data's $36 billion business is evenly weighted, Hume said, with half the company's revenue coming from endpoint products like PCs, mobile phones, and printers, and half the company's sales stemming from advanced products like storage, networking and servers. Peers like Synnex and Ingram Micro do more in the broadline space, while others such as Arrow focus almost entirely in the specialty arena.
"I don't think you're going to find anywhere near that type of balance with any of our competition in the market," Hume said. "When you take a look at the comprehensiveness of our portfolio, is truly is unmatched even with the new combinations you see emerging through acquisition in the market."
Just seven months after the $9.65 billion purchase of Technology Solutions closed, Hume said that 40 percent of customers in the United States and Europe already source both endpoint and advanced products through Tech Data. This number is only expected to grow since analytics, security and hybrid cloud benefit from both broadline and specialty capabilities.
The Technology Solutions deal also gave Tech Data the largest data center distribution practice in the world, Hume said. Before the TS acquisition, the company was already Europe's largest value distributor stemming from its February 2003 purchase of European specialty distributor Azlan Group.
Although the Westcon Americas deal gave Synnex a nearly $700 million gateway into Cisco, the distributor still has holes in its line card around data center vendors such as EMC.
The breadth of Tech Data's capabilities allows the distributor to serve as a truly agnostic consultant in attempting to help partners determine which end user workloads can go off-premises and which would do better on-premises. Dutkowsky described Tech Data as the "Switzerland of technology" since the distributor does not have an agenda around whether end users select endpoint or advanced solutions.
"If you only have a narrow line card, then you lead with your line card," Dutkowsky said. "If you have a broad line card, then you lead with, 'What's the right answer?' Because you know that answer is in there someplace."
Tech Data has been selling server, storage and networking products for a quarter-century, Dutkowsky said and is therefore familiar with pretty much every vendor that could be incorporated into a hybrid cloud solution. Less expensive industry-standard architectures are going to drive the hybrid cloud world, which he said plays well into Tech Data's strengths when going up against pure-play value distributors.
"It's going to need a velocity, volume distribution engine that Tech Data has that quite a few of our competitors don't have," Dutkowsky said. "As the workloads shift to a hybrid cloud world, we know where it's at, and we have the engine to address is. And no one else does. That's a big competitive advantage."