TD SYNNEX Cuts to the AI Chase

This turned out to be a pretty good week for PCs. Canalys reported a 3.2% increase in shipments during Q1 just a day after IDC put the number at a more modest 1.5%. That second figure doesn’t sound like much, but after eight straight quarters of declines (and compared to the 28.7% plunge IDC recorded during last year’s first quarter) anything in positive territory is encouraging.

We should be in for even better numbers soon moreover, according to a keynote at this week’s TD SYNNEX CommunitySolv event in Las Vegas, during which Michael Hilburg, head of North America insights at HP, said that 73% of SMBs have delayed refreshing the rapidly aging laptops and desktops they bought amid the pandemic four years ago.

“There’s this bottled-up demand,” he observed.

It’s beginning to break loose already in fact, according to Charles Pia, director of U.S. commercial financing for TD SYNNEX Capital. “We’re in a refresh cycle,” he told me this week. “In the next 12 to 18 months, we’ll probably see significantly more endpoints purchased than we have over the last 12 or 18 months.”

The arrival in bulk of AI PCs later this year will help fuel that purchasing, Hilburg and others forecast this week, and it won’t be the only way AI drives hardware spending, according to Marc McClure, TD SYNNEX’s senior vice president of enterprise and mid-market sales.

“I think AI is going to feed our data center business both on-prem and in the cloud,” he said during a Tuesday general session appearance. “In some cases, folks are going to want that data a lot closer to where the application is. In some cases, it’ll be where you can harness the horsepower of cluster computing and high-performance computing.”

Where SMB channel partners really stand to make money from AI, though, isn’t hardware so much as services and solutions, and as regular readers know there are varying opinions out there about whether that’s a sooner opportunity or a later one. Based on a few days at the CommunitySolv event, however, I’d say TD SYNNEX’s take on that question is neither of the above. AI, the distributor believes, is a right now opportunity.

The same is true at Ingram Micro and D&H as well, of course, as we’ve discussed here before. Their efforts, however, lean heavily for the moment toward using Microsoft Copilot as a first, relatively easy step toward more ambitious, higher-margin AI projects. Though TD SYNNEX has Copilot on its radar too, it seems more focused than peers on full-blown, fairly sophisticated solutions.

Take a look, for example, at the distributor’s Destination AI enablement site, which it launched last August. Though you’ll spot the Microsoft logo if you look closely enough, the word “Copilot” is conspicuous by its absence. What you’ll find instead is an expanding collection of materials offering detailed guidance on exploiting here-and-now “sales plays” in AI data infrastructure, analytics, MLOps, and “Vision AI” (think intelligent video surveillance).

More impressively, you’ll find a small but growing set of pre-assembled, pre-validated solutions as well. An early example combines servers from Hewlett Packard Enterprise bearing NVIDIA processors with software from AI vision platform vendor IronYun.

“We’re doing that when we believe there’s a really repeatable, scalable solution that we want to take to market,” says Lisa McGarvey (pictured at right), TD SYNNEX’s vice president of vertical markets, alliances, and solution aggregation.

Though the main target for those solutions so far has been larger solution providers with advanced skills, McGarvey is eager to get a wider range of partners involved.

“A lot of these partners in SMB and mid-market are playing in niche areas,” she notes. “We can look at those areas and really help them build something out to give them a foot in the door to start talking about AI.”

It helps that TD SYNNEX provides level one and two support for its ready-made solutions, along with a range of outsourced services. “We know a lot of our channel partners don’t have data scientists,” McGarvey says.

Those that do, meanwhile, are often happy to partner with those that don’t. “You don’t have to be the subject matter expert. You have plenty of people in this room to work with,” observed Steve Hull (pictured far left above), president of Albuquerque, N.M.-based solution provider Westwind Computer Products, during a panel session.

The key is getting started. “We are evangelizing that as much as we can, because we know there is a huge opportunity out there,” McGarvey says.

Creative financing

Delivering AI solutions takes money in addition to skills, so TD SYNNEX is working to ensure newcomers to the field can get appropriate financing. The company has introduced deferred payment plans, for example, to prevent upfront capital costs from locking partners out of the market.

“They’re basically not outlaying any capital at all until they start making revenue,” Pia (pictured) explains. “That way we’re not putting any burden on them for getting a project up and running.”

TD SYNNEX is adapting to evolving needs in high-growth markets outside AI as well, he continues. In security, for example, businesses that have finally realized they’ll be paying security bills forever are increasingly making longer-term commitments to vendors in response.

“They’re signing up for three-, five-, six-year deals on some of the cybersecurity to a get a discount upfront,” Pia notes. That leaves their partners exposed, though, if a client goes out of business 12 months into a 60-month contract. To mitigate that danger, resellers can now transfer that risk onto TD SYNNEX in exchange for a variable one-time fee tied to the end user’s creditworthiness.

“We’re then on the hook to pay the vendor,” Pia says.

Interest rates, which appear likely to remain high for longer than once anticipated based on this week’s CPI report, are inspiring other creative financing programs, including “rate buydowns” underwritten by vendors that cut lending fees to as low as 0%.

“They’re actually subsidizing the cost of financing upfront to TD SYNNEX Capital,” Pia says.

Financing of every variety is unusually popular at present, he continues, thanks to recession fears that while waning some among large businesses remain sky-high among small ones. That includes small IT providers, who borrowed 22% more from TD SYNNEX in 2023 than the prior year in a bid to conserve their most precious commodity.

“If Covid taught us nothing else, it’s that cash is king,” Pia observes.

Your next service practice: Sustainability

Seems like there’s nothing AI doesn’t touch these days, no?

Even environmental sustainability initiatives aren’t immune, as Adam Rutstein (pictured), TD SYNNEX’s senior director of global responsibility, made clear during a conversation with Channelholic and subsequent keynote. Per late 2023 data from KPMG, he notes, 94% of businesses plan to invest more in ESG data collection in the next three years, and 51% plan to include AI in those investments.

“Data in the world of ESG can be very complicated,” Rutstein says. “Being able to eventually streamline that data through AI will be critical, as it will free up organizations to work more on initiatives that will really allow them to move the needle when it comes to sustainability.”

As we’ve written previously, moreover, what’s good for the planet can be good for your bottom line too. Indeed, the business opportunity in sustainability generally has grown so ripe, that TD SYNNEX is now readying “practice builder” materials for the field much like those already available for security, cloud computing, and yes, AI.

“We will be able to work closely with you to assess where you fall within the hierarchy of sustainability from beginner to advanced, and we will be able to tailor solutions to be able to guide you on this journey,” Rutstein told conference attendees.

Journey is the right word in this context too, he added. “There is no finish line when it comes to sustainability.”

A hopeful take on diversity in IT

Contrary to intuition, sustainability aligns with the “E” for “environmental” in ESG rather than the “S,” which stands for “social”, as in “social responsibility.” Data on cybersecurity wages from ISC2 yesterday suggests the finish line in the latter journey, if it exists, is well in the distance.

Discouraging stuff, to be sure, but also maybe a bit misleading in isolation based on the large, packed room full of people at a luncheon during the CommunitySolv conference hosted by TD SYNNEX’s Elevate business responsibility group, an employee-led community dedicated to attracting, retaining, and advancing women. Kristi Kirby, senior vice president of vendor marketing and programs at TD SYNNEX and one of five participants in a panel discussion during the gathering, recalls attending a women in tech meeting just a few years ago.

“It wasn’t that full, and you could feel the discomfort in the room,” says Kirby (pictured center). “We have absolutely made progress.”

Kaye McMillan, TD SYNNEX’s senior vice president of sales development and communities, agrees. She still vividly remembers the first disti partner community event she attended back in 2012.

“If you looked in a breakout room, there were maybe two or three women,” says McMillan (second from left above). The session she came from right before speaking with me, on the other hand, was more like 30-40% women.

“I’m more optimistic now than I was 10 years ago, or five years ago,” McMillan says.

So is Kirby, who notes that TD SYNNEX is far from the only company in IT encouraging women and men alike to speak openly about gender and racial equity. “The better part of the vendor community is actually very committed to this,” she says.

Not solely due to a sudden burst of enlightenment either. With tech sector joblessness at a mere 3% right now, according to CompTIA, employers appreciate the dangers of ignoring an issue that affects half the country’s workforce.

“If you want to recruit the best talent, you can’t not be paying attention to this type of stuff,” Kirby says.

That goes double for the best Gen Z talent, adds McMillan. “It’s more of a demand than an expectation, really, from people who are beginning their careers,” she says.

While many IT providers are too small to support a BRG like Elevate, Kirby concedes, no organization is too small to get disciplined about diversity. “I don’t think any company won’t see better results by having more of those deliberate engagements—assigning actions, assigning owners, and having accountability from the leadership to drive it,” she says.

The leadership part of that equation is critical, Kirby emphasizes. “Leadership is not a right. It’s a responsibility,” she says. “It’s not a position of power. It’s a position of service.” And the best leaders serve the business by keeping inclusion on the corporate agenda.

“If you have the conversation, then change can happen,” McMillan says.

Nerdio’s “deliberate” strategy for AI innovation

A final blast of AI for this post, and then I promise I’ll stop.

Channelholic regulars have seen me write multiple times that while lots of vendors are incorporating AI-based automation in their management products, some appear to be doing so more slowly than others. Nerdio, one of the more cautious players in that story, shipped the AI functionality it previewed for partners during its recent NerdioCon partner conference last week, so it seemed like a good moment to test my thinking again with Vadim Vladimirskiy, Nerdio’s CEO.

“That’s a fair observation because it’s true that many IT management vendors are incorporating AI into their tools. However, I wouldn’t say that Nerdio is moving at a slower pace,” Vladimirskiy says. “We’re taking a more deliberate, use-case centric approach to AI integration rather than integrating AI for AI’s sake.”

So far, that’s produced two additions to Nerdio Manager for MSP, AssistPro, an in-app, context-aware assistant, and ScriptPro, a still forthcoming tool that writes Azure shell and Windows PowerShell scripts for tasks like installing software, disabling services, and configuring Azure resources.

Those, Vladimirskiy continues, “are generative AI-based technologies, but we’re also looking at AI from another perspective—machine learning and computer vision. For example, backup validation or image testing can actually perform or restore a virtual machine and ‘look on the screen’ to make sure there are no errors that come up.”

According to Vladimirskiy, both ScriptPro and Console Connect, a remote access tool Nerdio discussed at NerdioCon, will ship later in Q2.

Also worth noting

Wait, did I just promise to shut up about AI? Fat chance, if I’m going to do a news roundup for you this week.

71% of information management professionals worried about data privacy before implementing AI. 45% went on to inadvertently compromise data privacy after implementing AI, according to recent data from AvePoint.

Just in time for this week’s Google Cloud Next conference, Snyk has rolled out functionality that checks code generated by Google Gemini for security risks.

Also just in time for the Next conference, CrowdStrike Falcon solutions are now available in the Google Cloud Marketplace.

Also also just in time for the Next conference, ManageEngine’s cloud cost management tool now supports Google Cloud Platform.

SentinelOne has shipped Purple AI, an AI-based virtual security analyst.

Intel claims its new Gaudi 3 AI accelerator is 50% better on average at inference than NVIDIA’s heralded H100, 40% more power efficient, and a whole lot cheaper.

DocuSign has entered the market for what it calls Intelligent Agreement Management, an AI-based approach to contract creation, negotiation, and renewal.

Cloud ROI data from CloudBolt and Kubernetes resource optimization data from StormForge are now available in the same place.

Keeper Security has added time-limited access and self-destructing records to its privileged access management suite.

Check Point has added unified quarantine, DMARC monitoring, and more to its Harmony Email & Collaboration portfolio.

Ivanti has a new attack surface management solution.

ESET has a new security product for small office/home office environments.

Ryan Kam is the new CMO at Egnyte.

Granite Telecommunications has incorporated services from Rapid Response Monitoring to its EPIK fire and life safety solution.