The vendor view on Tech Data-Avnet TS union

Zyxel's Peter Hannah questions what the biggest ever distibution union will mean for SMB-focused vendor partners and for credit and pricing in the channel

Tech Data's acquisition of Avnet Technology Solutions took the whole industry by surprise. This acquisition will create a behemoth of an enterprise-focused organisation, with a huge breadth of portfolio. From the perspective of a vendor that sells to small, medium and mid-market customers, I would be concerned about my relevance within this super-distributor and how easy it will be to get my message across to my customers through this company. The acquisition means a considerable increase in the amount of products and services they'll be able to offer, so cutting through the noise could be difficult, with larger, enterprise solutions likely to be the initial focus. As a result, it would make sense for vendors to ascertain whether or not the partnership works in their favour.

Having been employed by both distributors, and working with them as a third party, it will be interesting to see how the two cultures merge - they are certainly different. Once the dust has settled on the integration, this distributor could be a one-stop-shop for the majority of the reseller market; products from every technology area and a raft of services to boot - it's an eye-watering proposition, if they get it right. For resellers, this could simplify the process of sourcing new solutions, with a reduction in the amount of distributors, and the possibility of bundling multiple purchases together for a reduction in costs. On the other hand, consolidation could mean the distributor has more power in terms of pricing, perhaps driving a reduction in the amount of available credit in the channel. In light of this, resellers should monitor distributors closely to scope out any changes in prices and pressure on credit lines.

With regards to the new Tech Data-Avnet TS entity, there will undoubtedly be some ‘consolidation' of staff and partner resources as they look to manage their profit margins, meaning less proactive selling could arise. As a non-enterprise vendor, it is already difficult to get access to Tech Data's sales organisation to drive opportunities and update them on our solutions. By acquiring Avnet TS, it could become even harder to be relevant inside a distributor where Cisco, HP, IBM etc. drive the agenda and majority of the engagement. It is therefore even more critical that we communicate even better with our partners and work with them to close, secure and deliver our solutions. However, I do think it is a great opportunity for specialists and value added distributors to add a more personal touch to their engagements with both resellers and vendors. Only time will tell what this has in store for the wider industry.

Peter Hannah is UK head of channel at Zyxel Communications