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Tech Data leaps into professional services pool

Buy of US-based STG will cause channel conflict, some resellers howl

Distie Tech Data has crossed the Rubicon into end-user land – ruffling a few feathers in the process – by acquiring North American data centre and professional services outfit Signature Technology Group (STG).

The deal was made public last night and reseller customers are digesting the implications, which range from potential channel conflict to – more positively, at the other end of the spectrum – the chance to resell services with a different company.

“The addition of STG strengthens our data centre offering, further diversifies our services portfolio, and – most importantly – provides added value for customers,” said Joe Quaglia, Americas president at Tech Data.

“STG has trusted relationships with some of Tech Data’s most strategic channel partners,” he added.

The acquired biz sells professional services to deploy kit on-premise and virtually, cloud assessments and migrations, and technical staffing to “ensure IT departments have skilled resources and coverage”.

STG sells direct and via third parties to small and large commercial customers, and to the public sector. It employs 125 staff, all of whom will remain on board, as will CEO Charles Layne, a former Insight exec.

The team at STG carry certifications for 23 OEMs and technicians support 300,000 devices for end-users in North America, the company said.

Tech Data’s tone implies it is going to largely sell the services via its network of resellers – at least, that would seem the bigger opportunity – but some US-based ‘solution providers’ still voiced concerns about the encroachment by the distributor.

One told US channel publication CRN that Tech Data already has information on his customers – it drop ships to customers worldwide – and another warned of encroachment on his professional services arm.

We called a couple of Tech Data’s local customers and the consensus was that it would be shortsighted of the company to sell direct.

“The hand that feeds it will be far bigger than the STG operation, and with competitors vying for business, I would think Tech Data has too much to lose [by selling direct],” said one.

Talking exclusively to The Channel, Tech Data Europe president Néstor Cano said the US transaction has yet to close, but it “will look” at the possibility of replicating the service in Europe.

He said the company is still concentrating in Europe on developing the mobility, enterprise and broadline businesses, and on integrating acquisitions made to date.

After this, he said emerging areas including Internet of Things and building a bigger services/cloud operation would be under close consideration. Tech Data already has a cloud aggregation service, but as with other distributors, this has been slow to gain momentum.

Cano insisted – as he would – that European resellers have nothing to fear by his company’s manoeuvring, saying that to him this does not feel like a land grab for tech services customers.

“This is more about helping [North American] resellers to transition to the cloud, the data centre and Internet of Things. Many of our competitors have technical services people in those areas,” he explained.

Tech Data is not alone is moving beyond straight product distribution. Most of its major competitors have launched similar services. Arrow has a professional services team and Avnet has spent the past few years acquiring MSPs, whose services it then punts to resellers.

Falling product margins are forcing suppliers at all tiers to rethink their businesses, with consultancies starting to sell product, resellers getting into services and so on. What a time to be alive. ®

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