Synnex Canada: One year later

VARs should expect to see more signs of change, challenge and growth over the next few months while doing business with Synnex Canada, according to its president Mitchell Martin.

One year has passed since El Segundo, Calif.-based Merisel Inc. agreed to sell its financially-shaky Canadian

subsidiary to Fremont, Calif.-based Synnex Corp. for $30 million in cash. Since then, Martin told CDN in a one-on-one interview, Synnex as a whole has continued to progress as a global player.

Its Canadian office has made some major strides of its own, Martin said. One of the most recent ones is winning the bid to be the exclusive distributor of HP’s new value-designated Compaq Evo PC models.

The predominant target market of this product line, he said, is small and medium business – a very important portion of Synnex’s overall strategy.

“We continue to work very well and put a large degree of focus internally into that segment with high market share with most of the vendors that we support,” Martin said.

Resellers catering to the SMB space will now be able to offer a competitive product to price-conscious end-users, he said. “I think a lot of that business today is defaulting to the direct channel . . . So it’s nice to have something that [resellers] can compete with on the PC side. The product is very price-competitive, more so than anything I’ve ever seen offered to that market segment through the channel.”

He said Synnex is looking into working with other third-party vendors to provide solutions and bundles with the HP value line – the next phase of the launch. So far, he said, “we’re having trouble keeping the product in stock, which is nice to see in the slow summer months.”

The other major news this year was the acquisition of the North American assets of Gates/Arrow Distributing from Arrow Electronics Inc. in May. Martin said although Gates Arrow had a very small presence in Canada, Synnex is in the process of working out possible deals with several vendors that previously distributed through Gates in Canada.

Although he wouldn’t give any specifics, Martin said the list would include vendors offering “more complex technologies that require a more value-added approach as opposed to commodity distribution – most notably networking.”

At press time, he said resellers should be watching for upcoming announcements within the next 90 days.

It hasn’t all been smooth sailing for Synnex over the last 12 months. The distributor has gone through some adjustments, but in the end, business has been made more efficient for the distributor’s customers. “It takes a while to reorganize and change to the degree that we’ve changed,” Martin said.

One of the big challenges was the core systems conversion from SAP to Synnex’s proprietary system.

“Distributors are very system-dependent because our business is very high-volume and low margin,” he said. “We rely very strongly on automation. When you go through changes that fundamental, each month in the following year you improve drastically.”

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Jim Love, Chief Content Officer, IT World Canada

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