IT distributor Tech Data’s (NASDAQ:TECD) CEO
says there is a greater tone of optimism among the VARs he’s spoken to today
than four quarters ago.
That doesn’t necessarily mean a quick conversion into sales, he says, but the
pipeline is more robust than it has been. And that points to 2010 as a year of
recovery rather than another year of decline.
Tech Data CEO Bob Dutkowsky shared his
thoughts on the state of the IT industry and technology sales with Channel
Insider following the IT distributor’s third-quarter earnings release.
Tech Data reported higher net income—$43.1 million compared with $16.8 million
for the same period a year ago.
Net sales declined 8.1 percent to $5.6 billion, compared with $6.1 billion for
the same period a year ago. However, third-quarter net sales represented an 8.8
percent increase over net sales in the second quarter.
As for 2010, while Dutkowsky says that we look to be at the end of declines,
the industry shouldn’t be expecting big growth. Rather, he believes, the market
opportunity will return to 2008 levels, which is an improvement over 2009.
Market opportunities for 2010 include vertical solutions, particularly health care,
and perhaps also open-source technologies, he tells Channel Insider.
Here’s where Dutkowsky weighs in on some of the other questions of the day.
Will there be a big PC refresh next year? “If there is, we are ready
for it,” he says. But Dutkowsky says he believes it will be more of an
evolution than revolution as IT shops replace PCs as they break rather than as
part of a big initiative all at once.
What opportunities are VARs seeing in the pipeline? Dutkowsky says it’s
across the board of technologies, from servers to storage to networking to
laptops to various types of software to virtualization. “Digital signage
continues to be a good segment, as is security—both physical and system
security,” he says. “The health care opportunity is really big, and literally
all the VARs want to understand how to get a piece.”
Any big changes quarter over quarter in terms of hot technology sales?
Dutkowsky says no real obvious differences here, but one set of products that
seems to be selling better than before are flat-screen TVs and digital
displays. “We think that will continue to be hot in Q4, too, in both business
and consumer sales.” Dutkowsky notes that VARs didn’t used to sell this
type of technology, but now customers want to put them in every conference
room. “It looks like it’s stronger because it is incremental to us,” he says.
Other big technologies for 2010? “Mobility will continue to be an area
that has potential to grow,” he says. And unified communications and network
security are other target areas for 2010 and for the years that follow.
What about managed services? “There hasn’t been a groundswell of
interest in managed services,” he says. “At the VAR
level, the challenge is to radically change the business model, which is
radically different. It looks nice on a PowerPoint, but as VARs decide to make
that transition, they learn it’s not an easy thing to do. When they do decide
to do it, though, we are prepared to help them.”
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