One of the key players in the NexInnovations fallout, Tech Data, is breaking its silence about the situation leading up to the Mississauga, Ont.-based solution provider’s downfall.
Rick Reid, president of IT distributor, Tech Data Canada, makes it clear that NexInnovations filed for bankruptcy under the Companies Creditors Arrangement Act (CCAA) and says the company was having trouble offsetting their high expense base with their current business. This, he says, forced NexInnovations to eventually shut its business down.
“The decision to shut down NexInnovations was a Tech Data decision,” Reid said. “We consulted with the U.S. and it was a joint decision to do this. We felt it was within our rights to exercise this decision.”
Reid added that margin pressure was quite likely a contributor to NexInnovations troubles.
He goes on to say that margin pressures are faced by everyone in the industry and that NexInnovations was not the only company going through this.
Reid maintains that Tech Data had a successful partnership with NexInnovations and explains any difficulties the company was previously facing had nothing to do with Tech Data.
Greg Myers, vice-president of marketing at Tech Data Canada, says in such a competitive industry, there are always ebbs and flows with organizations, both big and small.
“Everyone needs to realize how to manage a business matching with the realities of the day,” Myers said. “If you’re going to continue to do the same things today that you did the same yesterday, you’re going to be disappointed. Only the strongest survive in this business.”
For the channel, Reid says when a company is at the size of what NexInnovations used to be, it is an easy target for many other resellers.
With respect to the current channel situation, Reid says partners now have a wealth of opportunities readily available at their fingertips.
“This is a great opportunity and an outstanding deal for many resellers to now participate in the business that used to be NexInnovations,” Reid said. “It’s an opportunity for partners to win more business all around.”