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Tech Data UK boss on if devices demand will continue, who will be hit hardest by supply issues in 2022 and drawing up Net Zero goals

David Watts looks back on a year of supply chain volatility and which segment of the market will be hardest hit in 2022. He also tells CRN that Tech Data has made progress in drawing up Net Zero carbon goals

Looking back on 2021, have the supply chain issues played out as badly as you thought they would?

They are still there of course, but if I reflect on the year I would say they haven't been as bad as we thought. It's definitely a big feature of the market and not every vendor is impacted equally. The more disrupted part of the business in our experience is the enterprise side of the business. And the reason for that is because one supply issue can impact an entire project. With laptops, for example, you've either got a supply of high-spec laptops, or you haven't. But generally speaking that is not impacting a project, it's impacting a rollout refresh of laptops.

If you can't roll out a server, or you can't roll out a part of the network that is part of a bigger project, then that's going to hold back a lot of technology sales for one project. So the bigger impact we're seeing is on the enterprise side of the market.

Do you have any more visibility about how these issues will play out next year?

We're very reliant on vendor information around their own components sourcing. For the top two vendors in the server market, for example, what they would say to us is: ‘you will be living this world for the first half of next year for sure'. And on the endpoint product market it's similar, but probably not as chronic as it is on the enterprise side of the market.

Will demand for devices continue to increase?

My personal view is that we'll be in growth. I'm aggregating lots of different viewpoints that I hear and data that I see. Demand is outstripping supply and I think those budgets will be there next year.

I think once the supply improves, the demand will chew through it. I also think we're in this stage of the pandemic where people are now getting back to the office and have probably been running maybe one laptop throughout the pandemic. They're thinking that, now they're back in the office, they need another device for when they're at home. Lenovo have said there will be three devices per household a while ago. I think what they mean by that is, when the world normalises, people will be a device down because that device has been in the house all day. And now two or three days a week it is not in the house anymore.

Also, notebooks have worked hard and they're going to need a refresh. What's interesting is that there's sometimes a dynamic where the spend of customers is going in cycles. We've now had this long, elongated cycle where we need more endpoint devices and more up-to-date versions, that it's possible the spend now, as we go back into the office, will move to the datacentre, move to the network and move into the office infrastructure. I wonder whether that might happen.

You previously told us that a lot is happening at Tech Data from a sustainability perspective. Is there any more news you can share on that front?

There's loads of energy globally and in Europe. We are recruiting ESG heads globally and in Europe, and we've got some significant budgets to drive ESG and sustainability. Our UK head is Kevin Wragg who is starting out as director of environment and quality compliance. The quality compliance bit is for environmental management systems (EMS), which is ISO 14001, so he's going to take us through that.

And then we're working with a company called Arete which is run by a guy called Steve Finnegan, a professor at Liverpool University, who is going to execute on our Net Zero carbon plan. At the moment they're analysing our data across all of our facilities, all of our couriers and everything. And then they'll show us what our starting point is and then we come up with a date when we can achieve Net Zero.

And then if we drive the right activity, we can come up with a Net Zero carbon date.

Around ESG there's loads of stuff you can do around community and advocacy and stuff like that. If you really want to get to a decent Net Zero carbon aim, then you really need to pull around the data about what you're actually producing as a company to know what difference you need to make. So that's why we're spending a decent amount of money understanding that position and then we invest to change that position to a Net Zero carbon one.

When can you see Tech Data announcing its Net Zero carbon goals?

We know our absolute aim through this process is to come out the end of it in a few months' time, probably the end of Q1 next year, to say our aim is to get to Net Zero carbon by this point.

By the time we say that, we will know exactly what our plan is to achieve it. The danger at the moment is that we could have a date - I've got a date in my mind - but I don't know yet if that's too easy or if it's unachievable.