Rich Hume On Blockbuster Synnex-Tech Data Deal: ‘One Plus One Equals Four’

‘From a partner perspective, this is a huge win with (the combined company having) the broadest portfolio and the ability to have more capacity for investment that will accelerate next generation technologies,’ says Tech Data CEO Rich Hume, who will lead the new combined Synnex Tech Data.

Tech Data CEO Rich Hume Monday said the blockbuster Synnex-Tech Data merger paves the way for a next-generation technology distribution behemoth that amounts to a “one plus one equals four” combination.

“From a partner perspective, this is a huge win with [the combined company having] the broadest portfolio and the ability to have more capacity for investment that will accelerate next-generation technologies,” said Hume in an interview Monday with CRN.

Tech Data had already been investing heavily in its StreamOne cloud platform, while Synnex had been making a big bet on its Stellr platform. Now the two companies can eliminate duplicate efforts, freeing up cash to “accelerate” next-generation technologies moving forward, said Hume.

“Cloud platforms are extremely critical to the future. By us combining, we‘ll be able to bring expanded investment into those next-generation technology areas,” said Hume.

Tech Data’s StreamOne bet comes as the distributor is investing $750 million investment in next-generation technology areas such as cloud, security, analytics, internet of things and artificial intelligence.

The blockbuster Tech Data-Synnex merger, announced Monday, creates a $57 billion giant with more than 150,000 customers and 22,000 employees. The combined Synnex and Tech Data will overtake Ingram Micro as the world’s largest IT distributor, coming in nearly $10 billion larger than Irvine, Calif.-based Ingram Micro, which had $47.2 billion in sales in 2019.

The proposed $7.2 billion merger of publicly traded Synnex and private-equity-owned Tech Data will be led by Hume, with Synnex President and CEO Dennis Polk serving as executive chair of the company’s board. The combined company will be 55 percent owned by Synnex shareholders and 45 percent owned by Apollo Global management, which bought Tech Data for $5.4 billion in June 2020.

Financial muscle is key to building out a cloud platform that will pave the way for partners of all kinds to drive digital transformation growth, said Hume.

“The vision is for us to be able to provide industry-leading solutions across the entire IT portfolio, making the investments necessary to make sure that we keep pace with all of the change within the technology market and bring state-of-the-art capabilities and solutions to our our stakeholders, vendors and partners,” said Hume.

Hume credited Polk for having the vision to bring the two distributors together. “Dennis and I have known each other for a good period of time, and when we started to talk in earnest around this we realized what a great opportunity it would be to bring these two companies together,” he said.

“I have always been very complimentary of Synnex,” said Hume. “They‘re a good shop, and now we have the opportunity to bring two good shops together to create something magical for our partners and vendors moving forward.”

For Hume—who has played a critical role in the channel for 37 years in both the vendor and distribution world—the deal is a seminal moment in his career.

“I‘ve been in this industry for 37 years, and I can count on one hand the meaningful moments that were really game-changing,” he said. “For me personally, this is one of those meaningful moments that I believe will drive pretty substantive change for our joint companies, as well as our customers and vendors.”

In fact, he said, the deal will bring benefits for decades to come to both partners and vendors based on the combined company’s ability to invest in future technologies.

“This merger puts us in a position where we can more meaningfully invest to make sure that the transition [to advanced technologies for partners and vendors] is successful so we can move business into the future and continue to provide the excellent service to customers and vendors that we have had historically,” he said.

As for the post-pandemic future, Hume said IT continues to be at forefront of the economy. He said he expects digital transformation to play a big role in the hybrid work-from-home and from-office workplace of the future. “There is going to be more of hybrid IT environment with work at home and at the office,” he said.

Furthermore, Hume said, as more people get vaccinated there will be pent-up demand in the data center market. “That will emerge as an opportunity, probably in the back half of this year,” he said.

Bob Venero, CEO of Holbrook, N.Y.-based solution provider Future Tech, No. 96 on the CRN Solution Provider 500, said with Hume leading the combined company he is confident that the blockbuster deal will bring big benefits to partners.

“Rich’s partner expertise is unmatched from his days at IBM through now leading Tech Data and Tech Data-Synnex,” said Venero. “With Rich at the helm I know that we’re going to see value out of this deal.”

Venero said Hume is always on the front lines ready to work with partners to ensure customer success. “We recently needed help and support and Rich made sure we got it. That led to a very happy customer and success for Future Tech. Rich is a long-time supporter of the channel community. He knows what it takes to get things done for partners, and he knows how to invest to make sure partners are successful.”

Frank Vitagliano, CEO of the Global Technology Distribution Council, the industry trade association for IT distributors, said the blockbuster deal is another example of the high value that the marketplace sees in distribution as a driving force in the digital transformation economy.

“Distributors absolutely shined during the COVID-19 pandemic and are being viewed positively with regard to how they will play a big role moving forward in digital transformation for customers, partners and vendors,” he said.