SYNNEX Corp. plans to put some of the cash its double-digit growth is presently generating for it into new solutions, services, and resources for its reseller partners.
Most of those investments will be dedicated to the SMB portion of SYNNEX’s business, according to Dennis Polk, the Fremont, Calif.-based distributor’s CEO. Polk spoke this morning at the 2018 edition of the SYNNEX Inspire partner event, which is currently taking place in Greenville, S.C.
“SMB is always going to be our focus,” Polk said.
SYNNEX, which reported results for its third fiscal quarter yesterday, grew its top line 14.7 percent and its bottom line 16.2 percent, excluding costs related to its acquisitions of value-added distributor Westcon-Comstor Americas last year and outsourcer Convergys Corp. this year.
Within the U.S. specifically, meanwhile, SMB revenue is up 32 percent to date in the current fiscal year, according to John Phillips, SYNNEX’s vice president of U.S. SMB sales, who expects the year-end figure to be roughly the same.
“I don’t see us dipping below there,” he says, adding that much of that growth is coming from net new accounts. “We’re vigilant on signing up new business,” he says. To support that effort, Phillips continues, SYNNEX will expand its U.S. SMB salesforce by approximately 25 to 30 percent in the coming 12 months.
All told, according to Polk, SYNNEX has grown revenue by close to 10 percent annually on average over the last decade. “We make money year in and year out, and the important thing about that is we invest that money back in the business,” he said this morning.
Solutions and services, Polk continued, will be one of the company’s focus areas for investment in 2019. That means resellers can expect to see more offerings like TrackingForLess, the bundled solution introduced earlier this year (and previewed for ChannelPro in March) that combines GPS devices and mobile connectivity with custom-coded software to help truckers and other logistics businesses keep tabs on critical assets.
SYNNEX has several other such pre-engineered products nearly ready for release and many more in the development pipeline, according to Rob Moyer, vice president for cloud services, mobility, and IoT at SYNNEX. Among them, he continues, will be a cloud-hosted solution designed to convert an ordinary television into the core hardware component of an affordable digital signage solution.
“Turning a TV into a smart edge device and then tying it back to Google or Microsoft is so much more cost efficient than the old way, where it was a custom app built and then put onto some sort of [local] infrastructure,” Moyer says.
Equipped with specially-developed content management software and accompanied by optional outsourced assistance with installation and data analytics, among other functions, the forthcoming solution will sell for approximately $20 to $30 a month per television. Resellers can earn recurring revenue managing the system, and don’t need to acquire in-depth signage expertise before selling it.
That’s the model generally for all of SYNNEX’s solutions, which are designed to make entering new markets easier for resellers by pre-assembling piece parts into easily adopted products, according to Vice President of Mobility and Connected Solutions Tim Acker. Traditionally, he notes, distributors have forced partners to turn hardware and software components into customer-ready solutions themselves.
“[We’re] taking the engineering burden off them, putting it back on us, and giving them something they can consume,” Acker says.
Cloud computing will be another investment priority for SYNNEX in 2019, according to Polk, who said that the distributor recorded triple-digit gains in cloud revenue over the past year.
“But that was just basically keeping up with the market,” he said this morning. “In 2019 we have to invest more in this area of our business, more in our tools, more in our reporting, more in our automation to help you grow your business even faster.”
Those investments will include hiring people capable of helping partners add industry- and role-specific functionality to otherwise plain vanilla cloud offerings. “You’ll see us add more developers and more engineers to support the business,” Moyer says.
According to Phillips, accelerating sales of platform- and infrastructure-as-a-service solutions, especially from Microsoft, will be a key part of SYNNEX’s cloud push too. “Office 365 has been our bread and butter so far,” he says. “We’re really trying to grow the Azure piece of it.”
Capitalizing on the Westcon-Comstor acquisition will be a further point of emphasis next year for SYNNEX, Polk says. Worth at least $820 million, that transaction closed roughly 13 months ago. Following an extended process of complex backend integration, SYNNEX has been offering the entire Westcon-Comstor catalog to its resellers through its own ordering systems since August.
“We made a lot of progress in integration over the last year,” Polk told the Inspire audience this morning. “We really have to ensure that all that we received from this acquisition, all the great assets and the partners that we signed on and all the new customers that we signed on, are really doubled and tripled in 2019.”
Polk painted a bullish picture of the outlook for SYNNEX generally in 2019, noting that the company studies the state of the channel, the IT industry, and the economy overall when forecasting the future.
“The good news is all of those areas are flashing green lights for us right now,” he said. Fueled by high employment and tax cuts, Polk continued, the economy is making an especially significant contribution to SYNNEX’s robust top line. “There are really a lot of tailwinds to help us continue to grow,” he said.
Phillips is equally upbeat about SYNNEX’s SMB business. “It’s growing like a weed and I don’t really expect it to slow down,” he says.
