Tech Data Undergoing Digital Transformation, Urges Partners To Do So As Well

Tech Data is making itself into a major provider of digital transformation technology and services to the channel and wants partners to be ready to meet the digital transformation needs of their own customers, says CEO Rich Hume.

A combination of new technologies, a strong economy and a digital transformation push is making the IT market grow faster than expected, bringing new opportunities to solution providers that move quickly to help their customers navigate the changes.

That's the word from Rich Hume, CEO of Tech Data, who this week is presiding over the Clearwater, Fla.-based distributor's annual Tech Data Partner Summit, being held this week in Scottsdale, Ariz.

Hume, who in April became only the fourth CEO of Tech Data in the company's 44 years of operation, told solution providers that analysts last year had been expecting the IT market to grow only 2 percent to 3 percent, but in reality the market has grown two times to three times as fast as expected, from PCs to the data center.

[Related: Hume To Succeed Dutkowsky As Tech Data's New CEO]

"This is one of the most robust growth periods in IT. … I've never seen such uniform growth across all the products and geographies," he said.

Key drivers of that growth are a strong global economy and a strong U.S. economy combined with low unemployment, Hume said.

However, he said, these drivers do face headwinds including rising interest rates that may impact business' willingness to invest in new capabilities, as well as the repositioning of the U.S. government on the global stage. "Tariffs raise costs," he said.

New technologies including hybrid cloud, security and the Internet of Things are already a part of the conversation for solution providers looking to differentiate themselves, Hume said. "There are some things you don't have to talk to a consultant about," he said.

All those new technologies are impacting not only how customers address IT needs, but also impacting how Tech Data approaches the market, Hume said.

Tech Data is heavily investing in new capabilities to bring partners new offerings related to cloud, analytics and IoT, security and services, he said. This includes new focuses on hyper-converged infrastructure, software-defined technologies, edge technologies, tech-as-a-service and portfolio management, he said.

This has led Tech Data to go through its own digital transformation process. The company has in the past 18 months gone through a huge transformation to meet the new IT requirements of business with its acquisition of Avnet's Technology Solutions business, which gives it the edge when it comes to value-added distribution, Hume said.

The integration of that business is now complete and is having a huge impact on Tech Data. "I would not want to be in this job if we didn't make this acquisition," he said. "Hands down. I wouldn't want to be in this job."

Going forward, Tech Data's strategies include further digital transformation, including a process redesign, more automation, a new focus on advanced automation, and increased capabilities for its cloud marketplaces, Hume said.

Tech Data has also gone forward on its global business optimization initiative, which Hume described as going through each of its processes to make sure it is automated as a way to move more resources to other parts of the business.

Tech Data under Hume is very much moving in the right direction, said Adrian Jagow, managing partner at Talevation, an Indianapolis-based startup solution provider focusing on reselling IBM's Kenexa Assess on Cloud software for finding and assessing talent.

Talevation is on an ongoing digital transformation journey in how it uses the cloud, Jagow told CRN. The company had been bringing the Software-as-a-Service offering to customers in general, but needs to look at how to do so on an industry-to-industry basis. It will rely on Tech Data's StreamOne cloud marketplace platform to change how it works with customers, he said.

"We're using StreamOne to conduct business on the back end," he said. "We are integrating with Tech Data and IBM. But IBM is not used to handling credit card transactions. We can do it with StreamOne."

John Murphy, executive vice president at Advanced Systems Group, a Denver-based solution provider that works with Tech Data, told CRN that Tech Data's digital transformation moves are spot on with what is happening in the market.

Murphy cited the example of Zume Pizza, a Mountain View, Calif.-based startup pizza company that, instead of making pizza in a fixed location, bakes them in trucks as they are being delivered. The company early this month reportedly received $375 million in funding, giving it a valuation of over $2 billion.

Zume Pizza is showing how digital transformation is being done, Murphy said. "You may be Domino’s, have an app to order pizzas, and think you have digitally transformed," he said. "Now someone makes pizza on the way to your location."