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Tech Data gearing up for more familiar Q4

As life gets ever closer to returning to a more normal state, the distributor has noticed enterprise projects coming back

In any normal year, thoughts in the channel would now be starting to focus on hopes for the fourth quarter and what is traditionally a busy time. Even with the coronavirus rumbling on, there are signs that the past few months of 2020 will have a familiar trading feel.

Channel watchers have been monitoring results from the likes of Softcat and Computacenter to try and gauge the impact of Covid-19 along with the quarterly numbers from vendors. Most appear to have weathered the storm and after a few months of uncertainty are now looking forward to things starting to ramp up again.

That is certainly the feeling at Tech Data, with the senior management at the distributor already spotting signs of recovery.

“Things do feel like there is gathering pace again and we do feel that we’re getting back to something like normality, which is great,” said Matt Child, managing director for Advanced Solutions at Tech Data. “It does feel like we are stating to see normality return and I’m starting to see, in terms of infrastructure projects back up and running and a requirement for people to deploy customer services and data centres.”

Tech Data has been operating with staff working remotely and has seen some enterprise projects stall, but there is a sense that barring a second wave, the worst for now might be over.

“I do think we are getting back to something like normality, which is great. I think where we find ourselves today in terms of P&L performance and in terms of management support of employees, would we have taken that at the start of the pandemic? We would have grabbed ahold of it, because we have done lots of things really well,” he added.

“By focusing on the people I think that’s helped us get the answers we needed to get to help us drive our resellers and our supplier businesses,” he added. “All in all, we are cautiously optimistic.”

Permanent structure

The expectation is that the products that have supported customers through the pandemic – mobile computing, security and cloud – will continue to drive spending, but thoughts are now turning to making sure there is a more permanent structure in place to support the “new normal”.

“They’ll be some continuing mobility peak or perhaps more importantly the products that make mobility work in terms of having the right infrastructure in place,” said David Watts, managing director for UK&I at Tech Data.

“People have deployed well to get out into the environment in an emergency situation but now having to re-review their infrastructure and their security that enables that to really work in the long term,” he said.

“I think if anyone wasn’t clear about their cloud strategy before they’ve learned that they’ve had to be clear about it sooner rather than later,” he said, adding that partners had been using its Practice Builder support to make sure they could take users on that journey. “I think Q4 will be strong in those areas particularly, and then in the enterprise area we’re seeing large projects coming back online.” 

But where there is a slight note of caution is around the spread of the recovery across the channel, with it by no means being uniform so far.

“If you look at the data, much larger corporate resellers have done pretty well and they’re announcing fairly good results across the board and then the other end of the spectrum you’ve got some smaller customers almost in survival mode, furloughed a lot of staff and are just trying to manage the mobility peak, software renewals and stuff. It’s not equal yet that comeback,” said Watts.

“I’m really interested to see what will happen in the fourth quarter in our SMB channel. Those customers are resilient and I absolutely expect them to be there, and I’d love to see them back in full force as the high streets and small businesses, and all the things that they would serve, or niche areas of technology that they may serve, come back online,” he said.

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