TD Synnex CEO Rich Hume: Significant Investments To Come

‘When we look to the future and think about the technologies that are emerging right now—cloud, analytics, security, IoT—we’re in a position now where we were both previously investing and now we pool those investments together,’ new TD Synnex CEO Rich Hume tells CRN.

TD Synnex, the new No. 1 IT distributor formed from the merger of Tech Data and Synnex, is ready to invest in innovations and programs aimed at helping solution providers improve their business, said TD Synnex CEO Rich Hume.

Hume, who previously served as Tech Data CEO, Wednesday told CRN the merging of the former No. 2 and No. 3 distributors will bring a lot of benefits to channel partners and vendor partners far beyond the new scale of the company.

“Of course, they don’t care about size,” he said. “They care about the value that we’re going to bring to them in terms of their engagement and relationship with us. When we look to the future and think about the technologies that are emerging right now—cloud, analytics, security, IoT—we’re in a position now where we were both previously investing and now we pool those investments together. So there’s a bigger, if you will, total pile of money to use to build capabilities and capacities that will be much farther-reaching than when we were apart.”

[Related: Done Deal: 5 Things To Know About The New TD SYNNEX]

Hume declined to be specific in terms of the amount of money but said that as a stand-alone company, Tech Data had less than a half-billion dollars of EBITDA and TD Synnex will have EBITDA in the $1.6 billion to $1.7 billion range.

That money will be used to make sure TD Synnex follows the digital journey that both distributors were on, Hume said.

“The simple way of thinking about this is we both were duplicating investments,” he said. “We put those two piles of money together and [will] use them now to expand our capacity and capabilities.”

The kind of investments TD Synnex will be able to make that Tech Data or Synnex could not make on their own will mean increased opportunities for channel partners looking at how to take advantage of major shifts taking place in the IT industry, Hume said.

The IT industry as a whole will continue to grow at a CAGR (compound annual growth rate) of 5 percent to 6 percent over the next five years, he said. However, he said, certain areas such as cloud, analytics, security and services are seeing double-digit growth.

“[Those areas] carry most of the growth in the entire IT TAM [total addressable market], if you will,” he said. “So as both of us have done in the past, and now together, we’re steadfastly focused on accelerating the investments in cloud, security, IoT, analytics and services as we move forward, aligning with where the growth is in the market, and obviously with where the customer demand is. So we will now jointly make significant investments in those areas.”

Hume also discussed the entry of TD Synnex as the new No. 1 IT distributor amid the competitive landscape.

“Look, everybody has their own business plan and they have their unique strategy,” he said. “It’s hard to predict what might happen out there. The only thing that I would say is that the market is a healthy, competitive market. We had long-standing competitors that are in the market and we have a lot of respect for them. And we continue to believe that we’ll compete with them. And our commitment to our customers and our vendors is that we’re going to make the investments required to make sure their experience with us is top-shelf.”

Hume was the right choice to lead TD Synnex, said Sean Powers, chief relationship officer at RTM, a Bedford, N.H.-based solution provider.

Powers, who has worked with Synnex during his 19 years at RTM and at his previous job as well, told CRN he is enthusiastic about the formation of TD Synnex and Hume’s leadership.

Tech Data, and now TD Synnex, have made it clear that channel partners can expect more investment, he said.

“Communications have been really strong on that,” he said. “We’ve had high touch from Tech Data, and with TD Synnex, I think it will get even better.”

Tech Data has been transitioning to a solution focus, and Synnex has shown itself to be strong in logistics, Powers said. And he said he looks forward to seeing how TD Synnex continues that journey.

“I have a long history with Tech Data,” he said. “I’ve been working with the same salespeople, technical people and engineers for years, and it doesn’t seem like anything is changing. There are people at Tech Data who know my kids’ names. Relationships are everything.”