![]() ![]() Synnex, by contrast, has beaten the market on an annualized basis the last five and ten years. Tech Data sold out to private equity firm Apollo Global last year, and is now being sold again and Ingram announced was sold to private equity in 2016 and is now in the process of being sold to yet another firm, Platinum Equity Advisors, a deal that is currently pending. Things haven’t worked out as well for IBM nor Hewlett nor Arrow, which have, at best, paced the market the last five and ten years. In the past two decades, it seems to have worked out best for Dell Technologies, which has quadrupled since it was brought public again in August of 2016 after a hiatus as a private company. Does a smaller slice for Synnex and Tech Data and Ingram and Arrow and IBM and Hewlett add up to gains for their shares? In other words, the pie is larger, it’s just that Amazon and Microsoft and Google are taking bigger slices. That process, digital transformation, also known as digitization, as I’ve written before, is expected to be a tsunami of investment by corporate customers in the coming decade. Corporations are spending like bandits to turn everything they do, from finance to human resources to manufacturing to advertising, into an automated function. The silver lining for Synnex and the rest is that while the cloud companies make life harder for all these vendors, there is also more business for everyone. IBM has responded by announcing it will jettison everything that isn’t cloud computing and artificial intelligence, putting the less-interesting, more slow-growing managed services business into a tax-free spin-off to shareholders. Hewlett Packard Enterprise has re-fashioned itself as a shop for leasing, rather than selling, computing power. The word solutions, a rather vacuous term invented by the tech industry over the last two decades, basically means finding ways to bundle stuff together and thereby “add value.”Ī solution is, in fact, what companies such as Synnex have had to do to adapt to the cloud giants. In the case of Synnex, the company hopes to become more and more of a “ solutions” company. Synnex and Tech Data, along with other distributors such as Arrow Electronics and Ingram Micro, the former public, the latter private, have had to figure out ways to play in that market where cloud reduces the value of selling computer parts. The result is that as cloud has taken a greater role in corporate IT, all kinds of efforts have been made to right-size or reinvent the moribund business of selling corporate PCs and servers and networking. Plugging into cloud computing reduces the vitality of corporate computing operations, it shifts the center of gravity. Once upon a time, buying computers was the heart of how companies got work done, because they had to build their own networks and data centers. ![]() One area that is profoundly affected is the area of technology sales, the basic business of providing corporate users with personal computers and server computers and networking and all the basic plumbing of keeping corporate work humming. The effects continue to be felt at every turn. They represent a change greater than the mobile computing revolution propounded by the iPhone, because they made possible the decoupling of the act of computing from any particular computing device. Fear, in this case, of the awesome power of Amazon and the others, who basically rule IT these days with cloud computing.Īmazon’s AWS cloud computing service, which went online circa 2006, and the copy-cat services from Microsoft and Alphabet’s Google, are the single most important technology development in the last twenty years. ![]() Sounds great, but where there’s opportunity, there is also fear. Case in point, the announcement Monday by forty-year-old technology distributor Synnex that it will pay $7.2 billion to acquire privately held Tech Data, another distributor, to create a kind of super-set of their respective capabilities.Īs Dennis Polk, head of Fremont, California-based Synnex, put it in prepared remarks during a conference call with analysts, “We have the opportunity to create value by accelerated revenue growth, scale efficiencies, increased cash flow, and greater earnings power.” That’s presenting every other company in the world with the need to consolidate whole markets and industries. There is more business for every tech company, potentially, but also a greater and greater concentration of the spoils in the hands of a few gigantic companies, Amazon, Microsoft, and Alphabet being the most conspicuous. The spread of computing technology to every corner of society is a bit of a conundrum. ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |