TD SYNNEX has gotten out of the business of predicting the future.
Earlier in the year, company executives echoed projections by many others in IT that the supply chain slowdowns plaguing the channel since 2020 would likely start to ease toward the end of this year.
“And I can tell you it was all wrong, because the supply chain is not good at all,” said Americas President Michael Urban during a keynote today at TD SYNNEX’s CommunitySolv event in Orlando. Now, Urban noted, people are saying things will improve early next year, or perhaps next summer.
“Let’s see how that goes,” he said cautiously.
Such was the advice CommunitySolv attendees got from TD SYNNEX leaders more generally today: conditions are strong now and likely to remain so for at least the next few months, they said. Whether or not that momentum persists beyond then, however, is anyone’s guess.
“What I can’t tell you is what’s going to happen, because really no one knows,” said Rich Hume, the distributor’s CEO, during a presentation today. “What I can tell you is it’s good to think about the band of outcomes.”
At one end of that range is more of what we’re experiencing now. “Obviously, 2022 doesn’t have the same growth attributes as what we had seen in ’21, but when the books are written, it will show that ’22 was a great year again in the IT industry,” Hume said.
Indeed, the U.S. market has been up every month but one in the last 12 and Canada has seen six straight months of growth, said Peter Larocque, president of North America technology solutions at TD SYNNEX, citing data from IDC.
All that’s really changed of late, Hume noted, are the specific sources of that growth. “We all know the PC ecosystem has slowed a little bit after an unprecedented run through Covid, but the data center and infrastructure categories are quite robust,” he said, much as Ingram Micro told attendees at its latest conference last week. Sales of cybersecurity, Internet of Things, analytics, and cloud-based technologies are strong too, Hume added.
All of that’s likely to remain true in the short term, moreover. Internal reporting on sales trends and inventory levels gives TD SYNNEX “solid visibility” into the next 90 to 120 days, Hume said, “and the market still continues to show great prospects.”
Partners are optimistic as well. “Globally, 80% of you or thereabouts say that 2023 will be a growth year for now,” Hume said.
Still, he continued, there are plenty of reasons to be wary of the future. The world remains mired in what Hume, invoking a term he heard during a presentation recently, called a “perma-crisis.”
“When we think ahead to ’23 we’re talking about inflation, we’re talking about higher interest rates, we’re talking about recessionary times, we’re talking about challenges in the entire market,” he said.
Hume declined to forecast precisely what those challenges will mean for the tech industry next year. But he did offer reasons for hope.
“We have the benefit of being in an industry that continually outgrows GDP, and it has been that way for decades,” Hume said. “Although there might be ebbs and flows, the long-term opportunity for the IT industry is like none other.”
Partners, he advised, should keep their eyes squarely on that long-term opportunity. “The best defense is a great offense,” Hume said. “Make investments now to be able to participate when the market actually returns to a very robust state to really do great with your business.”
According to Larocque, that’s what TD SYNNEX itself intends to do. “We’re going to have some failures, but we play long ball,” he said. “We’re going to run a tight ship, we’re going be very focused on what we do, we’re going to have great people, and my sense is that the market for us will continue to be pretty good, and if it tails off some then we’ll deal with it.”
As for the supply chain, Larocque observed, there are lots of reasons to think shortages will be around for a while. “You have the transportation issues—you’ve got to ship all this product. It’s not getting there. You have production shutdowns in the far east and in other areas. You have the difficulty in bringing in people to build the goods,” he said. “It’s not just one thing, it’s many things.”
As a result, Urban added, now’s a good time to order products you expect to need later, because there are still six to nine months’ worth of orders clogging the pipeline.
CommunitySolv is the umbrella organization TD SYNNEX created to house Varnex, the partner community SYNNEX brought to its 2021 merger with Tech Data, and Tech Data’s own TechSelect community. This week’s conference, which concludes tomorrow, marks the first time Varnex and TechSelect members have ever met to forge relationships and exchange insights. According to TD SYNNEX, there are over 1,000 people in attendance at the show.
