‘[AI] is going to impact more or less every technology we take to market as a channel,’ said incoming TD Synnex CEO Patrick Zammit. ‘Of course you have the software. One of the most popular applications now is Copilot from Microsoft. But AI PCs are coming, AI servers, AI switches, AI storage. That technology is going to have an impact across the board.’

Big Focus On AI

Incoming TD Synnex CEO Patrick Zammit said the $57.6 billion distribution powerhouse is ready to help solution providers tackle the AI solutions opportunity that will impact every nook and cranny of the IT landscape.

“We know that AI is going to be very pervasive,” Zammit, who takes the reins from outgoing CEO Rich Hume effective September 1, told CRN. “If our partners don’t embrace it, either from a technology standpoint, infrastructure standpoint, or delivering a business outcome—most probably, they will—they not only miss a business opportunity with their end users, but there may be a risk that then don’t stay relevant for their end users. So it’s really important that they get into a position to advise end users.”

Zammit said TD Synnex is doing its part to power partners into the AI era with its Destination AI initiative, an “enablement tool” to assist partners in building out their AI and data practices.

[Related: TD Synnex CEO Rich Hume: ‘I Fought The Good Fight’]

“AI is an algorithm that works only if you have a data lake. Our partners who want to become active and successful in that space not only need to master AI, but they also need to master how to build a data lake,” said Zammit. “And we have both competencies.”

Zammit said AI is going to impact every technology that the distributors bring to market. “Of course you have the software,” he said. “One of the most popular applications now is Copilot from Microsoft. But AI PCs are coming, AI servers, AI switches, AI storage. That technology is going to have an impact across the board.”

Partners need to “adjust the way they’re going to take those technologies to market and basically explain to end users how AI will impact their business operations and how to leverage it,” he said.

What’s more, Zammit said, partners will need to “get comfortable” talking to line of business executives that specialize in vertical use cases rather than just CIOs or IT executives. “This is a powerful and impactful change for our partners which we need to embrace,” he said.

Below is an excerpt from CRN’s conversation with Zammit.

When you became TD Synnex’s chief operating officer in January, did you know at the time you were on track to become CEO?

I spent six years in distribution in addition to 24 years with Avnet. It’s true. If you look at my CV (resume), you will see some other names like EBV Elektronik, which was a subsidiary of Avnet. So a total of 30 years. In fact, I have been active in two distribution sectors. One was electronic components, and the other was IT. To put things into perspective, it’s important to have that background in mind. The definition at TD Synnex has been to prepare the succession plan by appointing a COO. And if you recall, Rich [Hume] went through exactly the same process. And so I would say, I was aware that if I met the expectations, the outcome would be CEO.

I will become CEO on the first of September. Rich is still the CEO. It confirms that the board has the confidence [in me and] officially stated that I will replace Rich. Rich is happy to retire by September 1. So I’m going to continue to work together with Rich through the transition, which I want to insist is working extremely well. Rich and I have had a very trusted relationship.

One of the biggest issues now in the channel is how to get partners engaged with AI, and bringing AI to their customers. It’s a two-fold issue: AI-based tools that partners can use to help their customers, and AI-based tools that partners can use to build their customers own operations. Where is TD Synnex now in terms of these?

After 30 years in distribution, I strongly believe that distribution brings a lot of value to the IT industry, and in particular helps accelerate the adoption of technology. We are not just a service industry. We are also a technology industry. So that’s a mission we have. TD Synnex has already launched an initiative called Destination AI. Before AI became so popular in the last year and a half, we had already developed a specific business unit around data and analytics, and developed a series of skills to take solutions to market. Destination AI is inheriting all that know-how we’ve built over the years. Basically, it’s an enablement tool to help our partners to build their AI and data practice. AI is an algorithm that works only if you have a data lake. Our partners who want to become active and successful in that space not only need to master AI, but they also need to master how to build a data lake. And we have both competencies.

The second thing is that what is really fascinating about AI is that the technology is going to impact more or less every technology we take to market as a channel. Of course you have the software. One of the most popular applications now is Copilot from Microsoft. But AI PCs are coming, AI servers, AI switches, AI storage. That technology is going to have an impact across the board. And for partners who are going to be active in that space, they need to adjust the way they’re going to take those technologies to market and basically explain to end users how AI will impact their business operations and how to leverage it. As a distributor, we have a lot of expertise to enable, train, and support our partners.

Does TD Synnex have to evangelize with partners, or are partners reaching out proactively?

We need to create awareness. I’m not using ‘evangelizing’ on purpose, but we need to create awareness so that the partners who are really interested are going to come to us for enablement and education. It reminds me a little bit of what happened when the public cloud came. ‘As-a-service’ was quite disruptive on partners’ model. S o we had to help partners not only on the technology, not only on how to take it to market, but also to understand the impact on their business model and operating model. For AI, if you want to focus on the business outcome, for example, it will require that our partners get comfortable talking to the end users’ lines of business, and that they specialize in specific verticals and use cases. This is a powerful and impactful change for our partners which we need to embrace.

How important is it for a distributor like TD Synnex to take the lead in training channel partners in these areas?

We know that AI is going to be very pervasive. If our partners don’t embrace it, either from a technology standpoint, infrastructure standpoint, or delivering a business outcome—most probably, they will—they not only miss a business opportunity with their end users, but there may be a risk that then don’t stay relevant for their end users. So it’s really important that they get into a position to advise end users.

Can you talk about the work TD Synnex is doing with the IBM watsonx AI and data platform?

IBM is a very typical example of a vendor that is completely transforming. They have declared hybrid cloud and AI as their priority. When you look at the solution they want to bring to market, they are really targeting enterprise-type end users. They want us to recruit and enable specialists on their technology on their AI solution who are repeatedly going to repeatedly sell it to as many end users as possible. In that case, they are not asking us to add an enormous number of partners. [The reason for that is] because it’s a big investment for IBM to find those partners who are really committed to IBM, committed to the IBM and AI solutions, and repeatedly take that solution to many end users.

What kinds of investments is TD Synnex making into its High-Growth Center of Excellence which is based In Europe?

TD Synnex is absolutely data driven. And we found out that the partners who bring to market a combination of hybrid cloud, cybersecurity, and AI are growing faster. So the Center of Excellence we’ve created basically brings all those competencies in one place to support that specific category of resellers. The Center of Excellence includes pre-sales support, proofs of concept, all the usual activities and resources and capabilities to help the reseller win at the end user at scale.

What are some new investments we can expect from TD Synnex there going forward?

We love to try new things. If this is indeed successful, we will expand in the U.S. and outside the U.S. We have this entrepreneurship spirit. Yes, we have this end-to-end portfolio. But then for every technology, we developed specific value propositions and specific go-to-market activities, and that has a positive impact on our partners. The Center of Excellence around the high growth technologies for partners is just one example. We are looking at other similar initiatives. I cannot speak about them yet, but something in the same spirit to target specific partner segments so they can win in the market and accelerate their success.

Much of your career has been spent in distribution in the European market. You will be taking over TD Synnex on a worldwide basis. Talk a little about some of the big differences between distribution in Europe and North America, and some lessons that you can bring from Europe that might help build the business in North America?

You’re right. Most of my career has been in Europe. Nevertheless, eight years ago, I got appointed global president of Avnet, so I have experience also in North America, meeting with North American partners. When you compare the two markets, I would say that, clearly, the innovation and the adoption of innovation is much faster in the U.S. The second big difference between North America and Europe is that the European market is significantly more fragmented. The countries are creating that fragmentation, where in the U.S. the business is more consolidated. The U.S. has fewer partners, but they are significantly larger in size. And that makes a big difference. What we had to deal with in Europe is how to support the midsize and the SMB markets. In North America, that’s one area where I’m sure I can help. In Europe we have to leverage digital tools to address especially the SMB market. And that is something which I can share with and bring to the North American team. And by the way, we’ve already done the first pilot. It’s one of our differentiators. We have this very unique data lake of information on resellers and end users. And we are utilizing that data to develop personalized digital campaigns.

And for the SMB market, this is very effective. We used to address both customer bases with a standard message, but that doesn’t work anymore. We have so much data about our customers. By becoming significantly more data-led, you can really come up with campaigns which address the needs of customers. That’s what we’ve developed in Europe, and we already started using in North America.

Since you became COO and started getting ready to eventually be CEO, have you had a chance to meet with the CEOs of some of your big OEM partners like HPE, Lenovo, and so on to talk with them about the business?

I was doing that already when I was in Europe, and I continued. For me, the focus of coming into the job and moving to the U.S. was really to meet the North American representatives of our vendors in addition to the global leaders. For us as a distributor, we have two kinds of customers. We have, of course, our [channel] partners, but I see our vendors also as critical customers. And so I need to understand not only what their strategy and value proposition are, but also what they expect from us so that we make sure we stay relevant and create value for them. So for me, it has been always extremely important to stay close to the vendors.

As you talk to these global vendor CEOs, what are some things they’re asking TD Synnex to do for them and their partners?

TD Synnex is in a very strong position. The reason we are today so valued by vendors is because we’ve been consistently developing value for them. All our vendors are in a transformation mode from a technological standpoint and from their go-to-market standpoint. We need constantly to adjust to make sure we are perfectly aligned.

What are the key themes? The first is to help them transform. They’re coming up with new products. They’re moving from a traditional licensing model to a consumption model. They’re asking us to support them in that transformation, to basically bring not only the solutions but also the way to consume the solutions to the resellers for them to bring into the end users. The second theme, which is a consistent message, is they need us to broaden their partner base. Every vendor’s priority today is to reach to a broader customer base. I can’t think of any vendor where we are not today working on a program to expand the partner base for them.

Ingram Micro appears to be on the way to an IPO. How will that impact the distribution business?

Ingram Micro has been and will remain very good competitor. The fact that they might go public now isn’t going to change anything. The only [change] is going to be more for the financial world where they will have a benchmark. But on a day-to-day basis, from a competitive standpoint, I don’t see any impact. They have their capabilities, we have our capabilities and differentiators. We believe we are extremely well armed to compete in the market. And that IPO will not change much.