Memo From Synnex CEO to VARs: Find the Courage to Change

Synnex (NYSE: SNX) CEO Kevin Murai described multiple challenges and opportunities facing VARs and MSPs last week during  Synnex National Conference, which attracted 1,400 attendees. The keynote covered everything from mobile opportunities (ultrabooks, tablets and Windows 8) to managed print services and cloud services. "You have to have a play in mobility and you have to have a play in cloud to address where technology is heading," said Murai, before adding later: "You have to have the courage to make change" both within your business and within your customers' business. Here's why.

Murai is not your typical technology CEO. He rarely seeks the spotlight, and his soft-spoken style avoids sensationalistic headlines. Instead, Murai's management style has allowed Synnex to extend its profitability streak to 101 quarters -- an impressive feat, considering the economic meltdown of 2008 and continued challenges in the IT market. Wall Street wasn't thrilled with Synnex's latest earnings outlook. But Murai continues to offer a consistent path forward. The VAR Guy captured portions of Murai's keynote in three separate FastChat videos accompanying this blog.

During Synnex National Conference, Murai conceded that some mobile and cloud trends are pressuring traditional markets like PCs, printers and servers. But he noted that Synnex resellers are stilling deploying millions of PCs for customers. And in the printer market, Synnex PrintSolv -- a managed print services initiative -- has caught on with the company's partners. Some additional highlights...

Video Part I

PC Challenges, Opportunities: "Yes, there are headwinds" in the PC market, said Murai. "But it's not all doom and gloom. We're still selling a lot of desktop units, and we're still selling a lot of notebooks." He sees Windows 8 Ultrabooks as a next natural opportunity, particularly in the SMB market.

The SMB Cloud: Murai expects dramatic SMB changes -- where the data closet essentially becomes a broadband connection and a switch for endpoint devices. "That probably will happen in SMB quicker than it will happen in midsize [organizations] and large enterprises," he predicted. "So do you have the right partnerships, capabilities and services to...make that a reality? And how do you ultimately embrace that?"

Managed Print Services: The printer market has also been declining, he conceded, but it is still a "very, very large market" where VARs can change the game with managed print services. "The market is either flat or in slight decline, but our managed print business is one of our biggest growth areas today."

Overall Managed Services: The next transition is really about becoming more of an MSP managing the entire environment, including cloud hosted services, he asserted. "Ultimately, when you're selling to your customers, and you're selling the end result and taking away their headaches and allowing them to sleep at night, that's where you provide the real value."

Video Part II

Cloud is Real: In North America, 77 percent of businesses already use the public cloud. Of that 77 percent, three-quarters expect to grow their businesses in the cloud by at least 20 percent this year. (Note: Murai's slides mention the data source but The VAR Guy missed the fine print; likely Gartner or IDC.)

Mobile: People want choice today. You have to be able to support and manage all types of devices -- Android, iOS, BlackBerry and more. "That provides opportunity for you."

Convergence and Machine to Machine Communications: Customers are gaining the ability to control power consumption and their environments while at work, at home or when traveling. And machine-to-machine communications will be huge, he predicted. Murai, citing third-party research, predicted more than 1 trillion devices will be connected to the Internet over the next few years.

Video Part III

Synnex Services for Partners: "We're not just a distribution company," said Murai. "We run a very large services business with a worldwide global footprint. We go well beyond what we've done only five years ago. Today we focus on our intellectual property: We own what we believe to be the best renewals platform in the world. That kicks off the opportunity for VARs with software license renewal and hardware warranty renewal. We'll invest in IT to make it easier for partners like you."

So where else is Synnex heading next? Keep an eye on the distributor's Microsoft relationship. Apparently, Synnex has formed a Microsoft-focused business unit, to assist VARs and MSPs with Office 365 and other Microsoft solutions. The VAR Guy and sister site will offer more perspectives on that really soon...
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