MSP: CDW Acquiring Sirius in Response to Tech Data-Synnex Merger

CDW acquiring Sirius Computer Solutions for $2.5 billion is its response to Tech Data merging with Synnex in September.

That’s according to Kenny Riley, technical director at Velocity IT, a Texas-based MSP. CDW announced the acquisition on Monday.

The acquisition accelerates CDW’s service and solutions capabilities. Moreover, it will enhance capabilities in key growth areas. Those include hybrid infrastructure, security, digital and data innovation, cloud and managed services.

In addition, it will increase opportunities to deepen customer relationships and expand customer reach.

Riley said this acquisition puts CDW “head-to-head” with TD Synnex in the distributor sector in terms of size.

“This news doesn’t affect us or our buying patterns, as we tend to get more competitive pricing by working directly with our account managers from the manufacturer rather than going through distributors such as CDW and [TD Synnex],” he said.

CDW-Sirius Pairing Won’t Harm MSPs, MSSPs

Bendix is a South Dakota-based MSP. Jeff Bendix, its president and CEO, said the acquisition is a “wise move and the natural evolution” of CDW’s business model.

Bendix’s Jeff Bendix

“We all know it is easier to sell more to your existing clients than to gain new clients,” he said. “This will help CDW accomplish that. However, there is a certain market segment that this type of service will work for. I do not believe most MSPs or MSSPs should have any concerns as their clients generally prefer a much deeper relationship with their IT provider, knowing their environments inside and out, having personal relationships with people, having local, responsive, hands-on service. Those are things CDW simply cannot provide, especially at scale.”

Marc Umstead is president of Plus 1 Technology, a Pennsylvania-based MSP. He said this acquisition is an example of the consolidation taking place in many industries.

“In many industries, companies are using consolidation to take advantage of scale to maximize productivity and margins,” he said. “This is another example of how smaller firms should be using their smaller size as an advantage. Smaller firms can pivot quicker, provide industry specific solutions, and provide a customer experience that companies operating at this scale simply cannot.”

Carl Fransen is founder and CEO of CTech Consulting Group, an Alberta, Canada-based MSP.

CTech Consulting Group’s Carl Fransen

“This is a very strategic move by CDW to get on board with the direction of the modern technology,” he said. “Previously, selling hardware and software was enough to keep up with the Ingram Micros and the newly merged TD Synnexes of the world. But as technology moves to toward solution selling, this will enable CDW to compete.”

The Big Are Getting Bigger

John Holland is managing director of Corporate Finance Associates (CFA). The firm tracks M&A in the technology services industry.

“It’s a significant transaction, because one of the largest North American IT channel players just grew its top line sales by over 10% with this acquisition,” he said. “The big are getting bigger in search of economies of scale. A similarly large acquisition took place in 2019 when Insight acquired the publicly traded, billion-dollar IT solutions firm PCM for sheer scale. The IT channel is consolidating, and that consolidation provides the larger players with …