Kee Ong - CEO, Synnex Australia and New Zealand
Representing a core area of the channel, Synnex services a variety of customers across Australia, including direct and value-added resellers, system integrators, retailers, and original equipment manufacturers (OEMs).
Operating as the largest distributor across the country, with a blossoming devices portfolio, Ong believes hardware and Cloud can combine to provide the perfect storm, advising that the strategic channel play for hardware resellers involves cloud, utilising both in a managed services business.
“Cloud is important but hardware still plays a significant role within the market,” he said. “Our hardware business is still going strong and we’re helping resellers understand how to join these two businesses together and build a synergy that accelerates growth across the business, rather than just dropping your hardware business to move to the Cloud.”
Ong is under no illusions however - this isn’t new and resellers are aware but despite growing streams of literature on the topic, questions still need to be asked.
“A reseller sells hardware, so why can’t they sell cloud together?” he asked. “You can provide fantastic cross selling options but it requires an in-depth understanding of Cloud and how it can be utilised alongside hardware.”
As Ong explained, a relevant local example is a sales person pushing the sale of a server, just the one box.
“The play here is to tell the reseller to advise the end-user to look at other options to compliment that server, such as disaster recovery on the Cloud,” he said. “That’s how you start looping the Cloud into the conversation.”
But instead of just moving more boxes in the future, how can the distributor, and the vendors, help resellers focus more on selling value-added services to customers?
“Training and education depends on the complexity of the deal,” he added. “The market talks about Cloud, whether it be public, private or hybrid and with that there’s a need to create an express route due to security issues. Even for those selling devices, there’s room to cross sell security into that.”
Ong believes it boils down to having the wider awareness of what the Cloud can do for customers and then possessing the knowledge to act on it.
“Helping our partners achieve this kind of success is critical for us in 2016 and beyond,” he reaffirmed.
Growth
When advocating a strategic channel play, Ong spoke with authority after transforming a $500 million company into a $2 billion distribution powerhouse - now housing around 430 staff - within the space of ten years.
“We work as a team,” maintained Ong, insisting that one person cannot run Synnex. “It’s too big and it’s always been a team effort.”
In achieving such growth organically, Ong said the long-game approach represents a more solid basis for future success, but requires unwavering resolve.
“It takes strength to stay with it,” he admitted. “But you can’t lose faith and you must be able to deliver on your promises.”
Akin to Business Growth 101, the execution of a relatively simplistic approach to distribution is actually, one of the hardest to maintain.
Offering a wry smile when recalling the testing times of the past decade, Ong believes the easy option is to make changes, rather than stay the distance during the eye of the storm.
“You set your vision then you stick to it regardless of what the cost is,” he revealed. “You stick to it whether good or bad and it’s tested my resolve, it absolutely has. But you need to show courage and stick with what you say you’re going to do.”
Acquisitions
As Australia’s largest distributor amidst a consolidating market - think the recent acquisition of Ingram Micro, and its recent acquisition of Connector Systems - Ong openly admitted that Synnex has opened dialogue with industry rivals in past, but in terms of rubber stamping an actual acquisition, “we’ve not achieved that result so far.”
Acquisition is a relaxed topic for Ong, who in keeping the door ajar, says during the past few years the company has spoken to “at least three or four” distributors regarding potential buyouts.
“We wouldn’t merge, we would acquire,” he added. “The size of our operations means that we’d like to drive any new business into our organisation. The door is open but they have to fit into our current business. It’s not a high or low priority but when the opportunity arises, we’ll certainly look into it.”
Unfazed by recent developments, Ong said the industry has been consolidating for the “last 15-20 years”, with Synnex happy to “let the market force play” in terms of triggering a local deal.
But in keeping with his methodical nature, Ong is bound by his questioning nature.
“Why do you have to put your business up for sale?” he asked. “Each distributor in Australia has its own reason behind why they do what they do but we have a criteria and our history will show that buying for the sake of buying does not work.
“That approach creates failure not success and there’s proof out there. So many people have gone down because of that and the market remembers.
“Organisations that try too much too soon can’t handle the speed, they can’t handle the size and they can’t handle the scale. And what happens? They go under.
“You have to make sure you have the capacity and capability to handle that otherwise you’re committing suicide.”
Future
Behind the analytical exterior lies a distribution CEO open to change, just not change for changing sake.
With acquisitions not off the table - or particularly on it if you ask Ong - the focus for 2016 turns to the reseller, and how best Synnex can facilitate channel growth in a changing market.
Short on sound bites but strong on a core strategy for the year ahead, opportunity lies in combining the best of both channel worlds; hardware and cloud.
“Just have a look at it,” he suggested. “If you just focus on moving boxes I don’t think that’ll be a good business a few years down the road.”
Transformation is coming but rather than succumb to blind industry panic, Synnex plans to take a breath, step back and assess - a method that has served Ong well for ten years in Australian distribution.
This article was originally published in the March 2016 issue of ARN magazine.
