Synnex Signs Distribution Deal For Time Warner Business

Synnex has inked a distribution agreement with Time Warner Cable Business Class, unlocking cable, fiber-based Internet, voice and TV opportunities for solution providers.

The agreement follows a similar deal between the Fremont, Calif.-based distributor and Comcast Business in 2013, allowing Synnex and its channel partners to service 44 of the 50 largest U.S. cable markets.

"Now is the time to get into this," said Brandon Reid, Synnex's director of sales and business development. "The end users are demanding bandwidth upgrades."

[Related: Synnex Seeks To Ride Dell Distribution Wave With Client, Enterprise Offerings]

Synnex's cable practice is growing exponentially due to increased cloud usage and a desire to update networking equipment. Reid said both of those trends are driving demand for increased bandwidth.

"There's no cloud without connectivity," he said.

Solution providers can aid clients in meeting their connectivity needs by conducting site assessments and carrying out an entire networking equipment refresh, both of which end users would be hard-pressed to get directly from the cable company.

The channel also can add value -- and boost margins -- by wrapping products such as Microsoft Office 365 around the Time Warner offering.

Over the past year, Synnex has signed agreements with several hundred solution providers to resell Comcast Business. Reid expects similar success with Time Warner.

Channel partners who capitalize on Time Warner's offering can expect margins of at least 20 percent, and up to 50 percent, Reid said. VARs can either structure the agreement as a one-time, up-front commission, a perpetual annuity-based business or a hybrid of the two.

Synnex can provide channel partners with as much or as little assistance as they'd like, Reid said, from letting the solution provider do all the work to carrying out all the deployment and installation activities on their behalf. Margins aren't altered based on the amount of assistance requested by VARs or MSPs, he said.

VARs familiar with the cable market typically like to complete their own deals because they have their own sales force and better reach in the end-user community.

Although Synnex has a majority of America's major cable market carriers, Reid said the distributor is evaluating adding carriers if they fulfill a significant gap.

Rules and regulations stemming from the proposed acquisition of Time Warner by Comcast -- which was publicly announced in February and approved by shareholders in October -- are still being written, but Reid said the deal shouldn't have any impact on Synnex's cable offerings.

Many existing AtNetPlus customers lack the bandwidth needed to support cloud services or VoIP, resulting in latency, stability issues or failover circuits, said CEO Jay Mellon.

"Just about everything we do eats bandwidth," said Mellon, noting that clients often don't realize that a lack of bandwidth is causing their cloud-based applications to run slowly.

AtNetPlus has resold Time Warner products for eight years, but signed an agreement to go through Synnex in hopes that the distributor can provide the Stow, Ohio-based solution provider with a stronger voice, better pricing and higher commissions, Mellon said.

Mellon sometimes finds that his sales force is competing against Time Warner's direct sales team for contracts with local governments, a situation he's hoping Synnex can help them avoid.

"On the surface, it's worth investigating," Mellon said.

He also said he would like Synnex to invest in messaging and marketing to combat preconceived notions that Time Warner Cable Business Class suffers from some of the same shortcomings as Time Warner's residential service.

PUBLISHED DEC. 22, 2014