Synnex: Enterprise Storage Play

Synnex currently sells lower-end HP storage products and now carries the StorageWorks Enterprise Virtual Array EVA line and the HP StorageWorks Enterprise Systems Library E-Series tape libraries.

HP is Synnex's largest vendor, accounting for 27 percent of sales in the fourth quarter ended November 2004, according to Synnex.

The enterprise products are sold through a closed distribution model requiring HP certification.

Synnex will look to build the business from scratch with solution providers not currently selling HP enterprise storage, Paget said.

"That's fine with us. The business plan we put together is incremental. We feel very confident we can bring new dollars to HP and Synnex. There are a number of [solution providers] that do not carry HP storage now," he said.

Synnex will face challenges building the business because of the investments necessary to become certified on the products, said Bicky Singh, CEO of Future Computing Solutions, a Yorba Linda, Calif.-based solution provider and HP enterprise storage partner through Tech Data.

"It is more than $300,000 for the VARs to get the authorizations that are required and the type of people you have to hire," Singh said. "[Synnex does] huge business with HP, so they'll probably slowly start picking it up."

"This is further evidence that the company is focused on moving up the food chain into enterprise-class products," said Brian Alexander, vice president of equity research, technology distribution, at Raymond James and Associates. "Full-line distributors are increasingly turning toward enterprise and specialty markets like enterprise storage due to their greater growth and margin profile."

Synnex is close to adding Milpitas, Calif.-based Quantum enterprise storage products, but the deal is not finalized, Paget said.

The distributor, known for its limited vendor card compared to Ingram Micro and Tech Data, plans to add more security and networking vendors, Paget said. Synnex also intends to pursue authorizations to sell more enterprise servers, including Unix servers, Paget said.