TD Synnex's Dave Watts lays his three big bets for 2023
Distributor's UK MD reveals key investment priorities for next year
Tech Data and Synnex knocked Ingram Micro off its perch as the world's largest IT distributor when they joined forces last year, with Q3 revenues of $15.4bn giving it an annual runrate of above $60bn.
Talking to CRN following the decision to drop the Tech Data name in the UK last month, TD Synnex UK&I managing director Dave Watts claimed the union will lead to "more investment" but no change in strategy.
Brushing aside the economic gloom, Watts said he agreed with data suggesting most resellers will grow by five per cent moving into 2023.
Drilling down further, CRN asked him for his investment priorities and big growth bets for 2023.
SMB
Penetrating further into SMB was a prominent theme at the recent Cisco Partner Summit 2022, and was also Watts' top pick as TD Synnex aims to make its cloud and e-commerce tools a utility for the long tail of smaller resellers in the UK.
"Our bet is, and always has been, SMB," he said.
"We're a large company. We deal with the largest VARs in the UK and we have a very bespoke relationship with them. But the vast majority of our customers in the UK aren't that. Context provided some data that shows that, in Europe, 70 per cent of resellers are nine people or fewer. And that is typical of the UK. So when I think of our customer base, that's who I think of. They are generally businesses that came out of technical expertise that have grown over time supporting a specific or a local market.
"When I think of those customers, and where we are investing, we're a utility to those customers.
"Ask salespeople in those smaller customers what tools they're using during the day, and I bet InTouch [TD Synnex's online platform] and our customer service tools will be in there, as well as our software renewals and - increasingly - our cloud platform - alongside their email.
"We understand the channel is full of thousands of small customers who can't invest in that stuff themselves. There's no way that you could build a cloud platform if you're 20, 30, 40, 50 people and a few million pounds' turnover. That's our job. How we help them grow and how we provide the utilities for our SMB customers continues to be our big investment."
Security
Gartner last month predicted that IT security spending growth will accelerate from 7.2 in 2022 to 11.3 per cent in 2023.
It picked out the increase in remote and hybrid work, the transition from VPNs to zero trust network access and the shift to cloud-based delivery models as three growth drivers.
"I think everyone's going to say security," Watts said.
"Pre hybrid cloud, it was critical. But once you're running in different environments, it became even more critical. Then we hit the pandemic, and suddenly you've got a much more mobile workforce and it became even more critical.
"There's a lot of investment in making sure everything that was done during the pandemic is secure, or secured in the most optimal way. And now you've got people coming in and out of offices and mobile. Is your office environment secure in the right way? Is your infrastructure secure in the right way? It's very pressing. And if you see data from CIOs and CTOs and what they're saying around what their priorities are, security is still right at the top. And we all understand the reason for that.
"Our biggest vendor there would be Sophos, and we have an array of vendors around endpoint solutions in the enterprise, as well, and we can support any security practice with the vendors that we have."
GreenLake and other hybrid cloud platforms
GreenLake is now a $7.7bn business and is growing at 86 per cent annually, HPE CEO Antonio Neri revealed last month as he unveiled his vision for the vendor's as-a-service offering.
During a keynote at CRN parent company The Channel Company's Xchange Best of Breed event in Atlanta, Neri said his ambition is for GreenLake to be a "North Star" for HPE customers, with the "entire company inside GreenLake".
Although Watts was sceptical over vendor claims of the market moving to 100 per cent as a service, he picked hybrid cloud as a final investment area for TD Synnex.
"The final one would be cloud, hybrid cloud and on-prem - and the decision-making process about those [three] things, and where you're investing your money," he explained.
"I think the market's settled down a lot. It's been quite a long time since anyone said it was all going to be public cloud. People are now understanding that it's going to be much more hybrid. And now they're understanding the hardware manufacturers' versions of that. Probably the most mature one is GreenLake but all the manufacturers are going to need a version of that.
"It requires a different understanding, technically, and a different understanding financially. And it needs to be sold, because not everyone understands that that might be the solution to their problems. So that whole on-prem journey to the cloud, with a better understood hybrid version in the middle, continues to contain a lot of our customers' time and thinking."