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March 28, 2022 |

TD SYNNEX Strikes Upbeat Note at Meeting of Varnex Partner Community

Despite headwinds from supply chain slowdowns and hiring challenges, market conditions are strong for TD SYNNEX and its partners, according to communities leader Sammy Kinlaw (pictured) and other company executives.

What’s true for ChannelPro readers is apparently true for TD SYNNEX and its partners as well. Just shy of seven months after one-time rivals SYNNEX and Tech Data officially merged to form TD SYNNEX, and some two years after a pandemic brought global economies to a standstill, the mood at the spring 2022 meeting of the distributor’s Varnex partner community in Greenville, S.C., is decidedly optimistic.

“The marketplace right now is super robust,” says John Phillips, vice president of SMB and MSP sales for the legacy SYNNEX portion of TD SYNNEX’s business.

Indeed, revenue through the U.S. Varnex community was up 33% year over year in the distributor’s first fiscal quarter, which ended last month, and 33 of the group’s roughly 400 members grew revenue by $1 million year over year in the same period.

“That is a mic drop if I’ve ever seen one,” said Sammy Kinlaw, senior vice president of sales communities for North America at TD SYNNEX, during a keynote this morning.

Expectations for the future among Varnex partners are strong as well, Kinlaw added in a conversation with ChannelPro, noting that he queried seven members of his partner advisory council on the topic during a meeting last weekend.

“I didn’t have anybody in the room out of my seven that did not predict growth this year,” Kinlaw says. “I know, a small sample size, but through my own one-on-ones, through hosting roundtables, through having monthly meetings with my advisory [council], nobody’s come to me and said, ‘I might go out of business,’ or ‘my cashflow is really in jeopardy,’ or ‘I’m losing.’ That is not the mindset.”

For TD SYNNEX itself, at least, that wasn’t the mindset before either. The SMB business Phillips oversees grew revenue north of 20% in both 2020 and 2021, thanks in great measure to spiking sales of laptops, webcams, cloud solutions, and other products suddenly in high demand among home-bound workers.

“Both of them were really good years,” Phillips says.

Data center infrastructure sales are sustaining that momentum now, according to Senior Vice President of Advanced Solutions Stacy Nethercoat. Embracing new digital business models often involves updating outdated back office hardware and software, she noted during a general session panel discussion today. 

“In the process, that brings in a conversation about hybrid cloud,” Nethercoat added. “That’s a massive opportunity for all of our partners.”

Kinlaw agrees, citing analytics and the Internet of Things as additional near-term opportunities. “We think there’s double-digit growth in those areas,” he says. 

Security, predictably, remains a growth area too. “It’s white hot, and it’s been white hot for some time,” Phillips says. “Quarter after quarter after quarter, it just continues to grow.”

Even the endpoint market might have some life left in it, according to Kinlaw, who once led Tech Data’s endpoint solutions business. Though analysts including IDC expect PC sales to slow in 2022 following two unusually strong years, he expects device revenue through Varnex members to continue rising. 

“Endpoint, no surprise to anyone, is still recovering from backlogs that we’ve been carrying for a year,” Kinlaw says.

In addition, the federal government will distribute hundreds of billions of dollars this year through the FCC Emergency Connectivity Fund, a more than $7 billion program aimed at helping local schools and libraries purchase laptops, tablets, Wi-Fi hotspots, and other items in support of remote learning solutions.

“That’s going to drive a lot of business,” Phillips predicts.

For all the good news it shared with partners today, though, TD SYNNEX acknowledged continuing headwinds as well. Those backlogs Kinlaw referred to, for example, are likely to persist, according to Americas President Michael Urban, especially now that rising COVID-19 infections in China have led to temporary lockdowns of Shenzen earlier this month and Shanghai today. Though conditions will improve somewhat after the summer, he said during a presentation this morning, “quarter three, quarter four will not be great in supply chain.”

The implications for end users are clear, he added. “If they’re ready to buy something, order now, because they will get it maybe a couple of months from now.”

Hiring and retaining staff will pose continuing challenges this year as well, speakers emphasized today. According to Kinlaw, in fact, staffing was the number one business concern cited by Varnex members in a recent poll.

“That was loud and clear,” he says. “They were afraid that if they want a contract, they couldn’t service it or they couldn’t manage it.”

Multiple executives pointed to TD SYNNEX’s services arm as a potential remedy to that problem. The company offers outsourced assistance with everything from wireless site surveys, network rollouts, training, and a wide range of other tasks.
 
“Lean on us,” said North American President Peter LaRocque this morning. “We have a lot of folks.”

This week’s Varnex conference, which is the first to take place in person since the pandemic, concludes tomorrow. TechSelect, another of the three communities Kinlaw heads up, will meet face-to-face in Phoenix two months from now, and some 1,200 members of the CommunitySOLV organization Kinlaw leads will convene at a mass gathering this November.


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