- Priyanka Pugaokar

The year 2016 was indeed happening and full of surprises for the IT channel business. The year was marked by several strategic acquisitions, mergers and splits, which in turn had a greater impact on the channel partners. Whether its Dell-EMC merger or Ingram Micro getting dissolved in the Chinese conglomerate HNA Group, partners were astonished to see the consolidation of business, which indeed is a future of the industry. While all the major channel plans of the companies are slated for roll out in 2017, partners are already gearing up for the transformation which is expected to impact their business positively.

Deal

Channel Times takes partners in the flashback to have a quick glance on the major tech deals in 2016 to refresh the memories of the passing year.

1. Ingram Micro Now Part Of HNA Group

What could be termed as biggest consolidation in the history of IT distribution business, the Chinese conglomerate HNA Group announced the acquisition of IT distribution major Ingram Micro for a mammoth $6.0 billion. As per the terms of the mega deal, all Ingram Micro lines of business and all regional and country operations are expected to continue unaffected. However, the company has ceased trading on the New York Stock. Ingram Micro will remain headquartered in Irvine, California and will continue to be led by CEO Alan Monié.

Ingram Micro India is quite bullish over its cloud business. The company has announced a couple of channel initiatives for its cloud partners such as addition of Microsoft Azure and IBM Connections to its Cloud Marketplace. Ingram Micro has announced a new recurring revenue stream and a subscription service bundle for SMB focused channel partners to meet the growing demand for “as-a-service” offerings.

2. Tech Data Acquires Avnet’s Services Biz

In yet another consolidation, US based wholesale distributor of technology products and services Tech Data has acquired electronics distributor Avnet Technologies’ IT services business for $2.6 billion. The deal is a win win for both the distributors as it complements their business in different geographies. Tech Data has strong presence in Europe, but not in Asia, whereas, Avnet is strong in the US and in Asia. Avnet has also acquired its rival its British competitor, Premier Farnell for over USD 850 million.

Avent is heavily focused on its channel expansion across the regions. The distributor has launched a new initiative that provides accelerated growth capabilities to channel partners of IBM by helping them generate industry-specific data analytics solutions. Avnet has also launched a managed security service program, known as Recon, for channel partners. The company, which has a prominent presence in India recently appointed Sundaresan K as country general manager of Avnet Technology Solutions, India to drive profitable growth and enhancing Avnet’s solutions specialist offerings for the local market.

3. Dell And EMC Now Dell EMC

In a largest technology merger in history, Dell (now Dell Technologies) completed acquisition of EMC Corp for its $60 billion to become a one-stop shop for IT solutions. With this mega deal, Dell has become the world’s largest privately controlled technology company which will now play strong in the both servers and storage segment which an added portfolio from EMC. Since the company has completed acquisition, there are many anticipations and speculations about the channel strategy of the combined forces. Dell EMC is likely to merge the two partner programs to create a unified partner strategy post-merger that will launch on February 1.

The program has been designed in collaboration with partners and draws from the best aspects of the partner programs of both the vendors. Dell has also announced stringent process of Deal Registration (DR) to protect partner’s interest. Dell EMC has also announced an appointment of Tian Beng as channel business head in the APJ region. Channel partners in India have welcomed the new channel initiative, but they said they would prefer to wait for the actual implementation of the program before judging the announcements.

Mergers and acquisiitions

4. Symantec’s Blockbuster Blue Coat Deal

Like consolidation of IT distribution industry, the year 2016 also marked some of the crucial mergers in the security segment. A leading player in the enterprise security space, Symantec completed the acquisition of Blue Coat Systems for $4.65 billion to leverage Blue Coat’s regional reach and lead in the web security. The acquisition also complements Symantec’s product portfolio and creates the industry’s largest pure play cyber security company. Michael Fey will serve as President and COO and Thomas Seifert will continue to serve as Executive Vice President and CFO of Symantec.

Symantec has expressed its active interest in the integration of products, teams, and cultures, and their channels as well. The company says channels are expected to be the primary path towards distribution and sale of the combined product portfolio. Symantec’s partners in India are very optimistic about the merger. According to the partners, Blue Coat’s acquisition, Symantec will now have a complete portfolio of security solutions which ultimately help its partners to take the brand to the customers in a better way.

5. Avast Brings Rival AVG Technologies On Board

In yet another high profile acquisition, Anti-virus solution provider, Avast Software acquired its rival AVG Technologies in approximately $1.3 billion deal. Combining Avast’s and AVG’s users, the new organization will have a network of more than 400 million endpoints, of which 160 million are mobile. With the acquisition, Avast has also expanded its SMB business and added AVG’s strong reseller base, enabling Avast to support more and larger organizations. The new entity will have one of the largest network of sensors for threat detection, positioning it well to be the go-to security solution for the Internet of Things (IoT), especially in consumer applications.

The company has not disclosed its plans for the consolidation of the channel partners yet and there will not be any immediate changes to its current channel strategies. However, both the entities will eventually merge its channel initiatives in a unified partner program. Avast Software has recently announced the appointment of former Symantec executive Kevin Chapman as its SMB channel chief.

6. Accenture Acquires Oracle Partner Redcore

Accenture has acquired Redcore, a Melbourne-headquartered IT consulting business for an undisclosed sum. Redcore provides security services and IT service management for a wide range of clients, including government agencies and companies across the finance, health, retail and telecommunications industries. The firm, which has presence in India specialises majorly in Oracle. Company’s other partners include a host of software and security vendors, including CA Technologies, BMC Software, SailPoint, HID Global to name a few.

With the acquisition, Accenture has expanded its IAM services and security-as-a-Service capabilities as well as to strengthen its leadership position in the Asia-Pacific region.The company intends to integrate Redcore with the Accenture Security business post completion of the takeover.

spin off

7. SonicWall Goes Solo; Splits From Dell

While on the one side the security industry witnessed high profile mergers and acquisitions, it also saw splits and spin offs in the fiscal 2016. Network security firm SonicWall officially spun out of Dell Technologies as an independent company. According to SonicWall the separation will accelerate the growth of the company which was once upon a time was a market leader in the network security space. In conjunction with the creation of an independent SonicWall, the company named Bill Conner as its president and CEO.

Realigning its focus on the channel after separation, SonicWall also announced a new SecureFirst partner program. According to the company, SecureFirst partner program has the best features of both Dell and SonicWall’s channel programs. Indian partners have welcomed the move as they believe that the new entity would be more agile and focused on its business and channel strategy and hoped that it would soon regain its position in the UTM and Firewall market in the country.

8. Intel Spins Off Security Business

In yet another important update, Intel announced to spin off its McAfee cybersecurity unit in a deal worth approximately $4.2 billion, just six years after acquiring the company for $7.6 billion. Intel will get approximately $ 3.1 billion cash and retain about 49 percent stake in the new company (Intel Security). Investment firm TPG will invest approximately $ 1.1 billion in McAfee and own 51 percent of the company. The transaction is expected to close in the second quarter next year.

Intel Security recently unveiled new products, renewed security strategy, partner program and logo at its Focus 16 Security Conference organized in Las Vegas. The new entity announced new partner programs as part of the Intel Security Innovation Alliance, including integration with Check Point, HP Enterprise Aruba and MobileIron. Intel Security recently elevated Jagdish Mahapatra to the role of APAC Channel head who was leading India and SAARC operations of the company.

9. HP Buys Rival Samsung’s Printing Biz

Once rivals in the printing space, both HP and Samsung surprised the industry when they announced a strategic tie up to by Samsung’s printing business unit for approximately $1.05 billion. With the acquisition, HP gets a big printing presence in Asia, as well as Samsung’s laser printing technology and around 6,500 printing technology patents. HP will also inherit 6,000 Samsung employees once the deal closes. By acquiring Samsung, HP also eliminates one of its printer rivals and gains a possible boost in revenue to offset declines in its printing business.

The deal has evoked a mixed reaction among Indian partners who sell both the brands. While the channel partners believe that the deal would help HP maintain its leadership position in the segment, they are unsure how the company will market two competing products while ensuring that there is no cannibalization. Though HP has not revealed the channel cards yet, it is expected to announce the clear roadmap for channel business as the acquisition progresses.

consolidation

10. Oracle Buys Cloud Storage Company NetSuite

Oracle which seemed very aggressive on its cloud roadmap in 2016, announced a slew of acquisitions to enhance its cloud portfolio and surge the competition. One of the important acquisitions was the cloud storage company NetSuite for approximately $9.3 billion. Oracle has been demonstrating healthy growth in its cloud business over recent months in comparison to competitors. NetSuite’s acquisition is a strategic move that aims to help Oracle compete against the likes of Salesforce.com Inc., Microsoft and SAP SE. Similarly, the collaboration with Oracle is expected to benefit NetSuite, to leverage the market opportunities with synergy generated by both cloud vendors.

Both Oracle and NetSuite have not disclosed their channel play post completion of the deal yet. However, channel partners in India are very optimistic about the much talked about the Oracle-NetSuite deal and is hoping for the best outcome from the $ 9.3 billion acquisition. However, partners demand more clarity on the impact of the deal on the channel business and opportunities, as well as challenges coming up with synergies of two cloud veterans coming together.