Bob Dutkowsky: Tech Data will use credit as "competitive weapon" in Australia

An expanded vendor roster, its global cloud engine and a multibillion-dollar credit line – that's how Tech Data hopes to grow its Australian footprint following the acquisition of Avnet.

Avnet Technology Solutions' Australian revenue was A$480 million in 2016, which is a scarcely 1 percent of Tech Data's anticipated 2018 revenue, but the global distributor's CEO, Bob Dutkowsky, said the country is still a "very attractive business".

"Tech Data has other countries in our portfolio that are that size. That size business is a very attractive business for Tech Data. Even though we will approach US$35 billion in sales around the world, the concept of a contained market, which Australia represents, is a market we like a lot."

Speaking on the phone from the company's headquarters in Clearwater, Florida, Dutkowsky said there is a "sense of urgency" to conclude its search for local leader following the July resignation of Darren Adams, general manager of Avnet Technology Solutions Australia & New Zealand.

Michael Costigan has stepped into the role during the recruitment phase.

"We are fortunate that when the general manager decided to leave there were other people who could step in on the interim mode," Dutkowsky said. "It has been a high priority for us to find the new leader for ANZ.

"We have looked both internally and externally and we hope to make an announcement in the near future. It is a very important geography for us, so when you have the opportunity to pick the new leader you thoughtfully work through all the candidates, and I can tell you there are several really qualified people and we are confident we can add a really solid leader in the near future."

The new recruit will report into William Chu, president of Asia Pacific, who reports into global COO Rich Hume then into Dutkowsky.

One benefit of the merger will be the arrival of Tech Data's StreamOne cloud enablement system, which Dutkowsky said would run alongside the Avnet cloud marketplace when it launches in Australia.

Tech Data will also beef up the amount of credit available to resellers.

"We at Tech Data use credit a competitive weapon. It is one of the most important things we bring, after we win the business with our skills, knowledge, technical certification and configuration capabilities.

"That credit engine is now available to the market in Australia and our balance sheet is much larger than the former company. At any time around the world we have US$3 billion in lines of unsecured credit and now with an even bigger Tech Data, we have the capacity to provide even larger credit into the marketplace.

"Australia is an important market for us. You can assume one of the things we will bring is enhanced credit capacity," Dutkowsky added.

As Tech Data squares off against competing distributors in Australia, "we know the power our our balance sheet credit extension will open doors in the market".

Mainstream vs value-add

Dutkowsky categorised Tech Data as a "broadliner" and Avnet TS as a value-added distributor, but has steered away from these labels with its rebrand under two portfolios, endpoint solutions and advanced solutions.

Having spoken to customers and vendors during the merger, "they didn't believe the legacy siloing of a broadliner and a VAD would be the way the world would work in the long run".

Tech Data's Australian vendor portfolio leans heavily toward the advanced solutions side, and Dutkowsky expects to grow market share by bringing further vendors down under.

He wouldn't be drawn on which vendors in particular, but Tech Data partners with a huge portfolio of companies, including relationships with tier-ones it does not represent in Australia, such as HP, which was worth 13 percent of Tech Data's 2017 revenue, and Cisco, worth 10 percent.

"Various vendor have different contractual relationships – one size fits none," Dutkowsky said.

"In some cases we would need to apply to the vendor to get their products added to our Australia line card. In other cases, with other vendors where we have global relationships already, anywhere Tech Data launches, a business can launch that product in that geography."