Cloud computing and Shared Services top concerns for Tech Data Canada

CALGARY – Distributor Tech Data Canada (NASDAQ: TECD) launched its spring TechSelect conference here Monday with president Rick Reid identifying cloud computing, federal IT procurement and service delivery reform and Hewlett-Packard Co.‘s configure to order (CTO) Intel server business as among his current top concerns.

Addressing Tech Data Canada’s top reseller partners in Canada, Reid gave an overview of the distributor’s performance to date and outlined some of the top of mind challenges for partners going forward. And at the top of his list was cloud computing.

“It’s not a negative at all,” stressed Reid. “But we’re still struggling in just what the role of distribution will be within the cloud. We’ve identified a few key areas, such as the resale of our existing partner cloud offerings. We’re still working through all that.”

While the public cloud is growing faster than the overall software market, by 2015 it will still be just 11 per cent of that market said David Senf, program vice-president with the infrastructure solutions group for IDC Canada. And while partners expect the percentage of their revenue from cloud to grow from 15 per cent today to 21 per cent by 2014, Senf said that may be overly optimistic.

Partners are still figuring out their cloud play as well, said Senf. A minority of partners have a well-defined cloud play today; 36 per cent are in the early planning stages and 29 per cent have thought about it hard but have no hard plans in place. While more SMBs are using cloud offerings, Senf notes the dollar opportunity is still higher in the enterprise market.

Next on his list was Shared Services Canada, the federal government’s new vision for IT service delivery and procurement reform that, instead of each department buying and building their own IT services, would see them procured and delivered through a central government-wide bureau. It would see over 300 data centres cut to 10, and several-dozen e-mail systems and several networks each reduced to one.

“We’re in regular conversations with the federal government,” said Reid. “Instead of the individual ministries our resellers have traditionally sold to, they may be selling to this much larger entity in the future called Shared Services and we don’t know what that means.”

And third on Reid’s list is HP’s (NYSE: HPQ) Intel server business. About five to six years ago, he said, HP decided to have both a traditional build to order (BTO) and configure to order (CTO) businesses, which Reid called a fantastic premise. However, HP asked resellers to lock in with one distributor to procure CTO Intel servers from, and Reid said Tech Data was slow off the mark.

“The value-added distributors (VADs) had a head-start convincing many resellers to put their CTO business with them, and we’ve been lobbying HP for five to six years that’s unfair,” said Reid. “Lots of CTO sales are strictly standalone, so why not have the option to place that order with a broadline like Tech Data?”

HP has now agreed with that argument, and will allow resellers to name a second CTO distributor. Reid said he wants all Tech Select partners to hopefully pick Tech Data. While Tech Data remains HP’s largest Intel server distributor, to date he said most of the CTO business has been going to Avnet and Arrow.

Follow Jeff Jedras on Twitter: @JeffJedrasCDN.</p?

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Jeff Jedras
Jeff Jedras
A veteran technology and business journalist, Jeff Jedras began his career in technology journalism in the late 1990s, covering the booming (and later busting) Ottawa technology sector for Silicon Valley North and the Ottawa Business Journal, as well as everything from municipal politics to real estate. He later covered the technology scene in Vancouver before joining IT World Canada in Toronto in 2005, covering enterprise IT for ComputerWorld Canada. He would go on to cover the channel as an assistant editor with CDN. His writing has appeared in the Vancouver Sun, the Ottawa Citizen and a wide range of industry trade publications.

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