Tech Data’s new CEO, Rich Hume, starts his CEO gig at the top. How will he keep the business in the pole position?
June 6 marked the end of an epoch at Tech Data, the Clearwater-based IT distributor that surpassed Publix this year for the No. 1 spot in the Business Observer’s Top 500 list of the largest companies by revenue.
That was the date Bob Dutkowsky, 63, stepped down from his position as CEO, ending a wildly successful 12-year run. The new CEO is Rich Hume, 58, a fellow IBM alumnus who joined Tech Data in 2016 as COO — and is Dutkowsky’s handpicked successor.
Dutkowsky’s tenure saw Tech Data’s annual revenue rise to more than $36 billion, when it struck deals with tech-sector titans like Apple, Cisco, Hewlett-Packard and Microsoft. Under his leadership, the company successfully took advantage of the rising demand for mobile technology and cloud computing among businesses large and small worldwide.
Now Hume has the unenviable task of figuring out what the next technological must-haves will be in the workplace.
“You cannot stand still because what was valued three to five years ago is now expected and the expectation continues to be higher and higher.” Rich Hume, CEO of Tech Data
As a distributor, not a manufacturer, of IT products and services, Tech Data has to remain well ahead of what propels innovation — the companies and products that only a select few insiders might be talking about today, but could very well be household names a year or two from now. Trend spotting, however, is just half the battle — Tech Data also has to figure out how to develop an ironclad supply chain to meet the business demands of tomorrow.
“The IT industry is going through a level of technology transition that's unsurpassed,” Hume says, citing data security as an area that will drive major growth. “And so we’ll be looking to digitally transform the totality of Tech Data such that we serve [customers] more productively and efficiently. You cannot stand still because what was valued three to five years ago is now expected and the expectation continues to be higher and higher as you move through time.”
One of Tech Data’s intrinsic advantages in the marketplace is the breadth of its offerings. For example, it can supply the hardware for a PC environment consisting of hundreds of workstations and dozens of servers, or it can sell access to data-center services that keep businesses’ information stored in the cloud. It also can provide marketing, logistics, warehousing and credit services to its customers.
“We differentiate ourselves versus our competitors by offering a very broad, end-to-end portfolio,” Hume says. “Resellers are looking for one distributor to work with to provide an entire landscape of technology to them as opposed to having to go to multiple sources.”
Hume’s long tenure at IBM, which he joined in 1984, set him up well to know what Tech Data’s clients look for and where the company should allocate resources. He held leadership positions in several key areas of Big Blue, including its PC division, Intel-based server division and IT services unit.
“It was the culmination of all of those experiences that really aligned well with the needs of Tech Data as they looked for their next CEO," Hume says. "And I was the executive at IBM in charge of the relationship with Tech Data. So that gave me the opportunity to know the company at a pretty detailed level from a vendor perspective.”
Joe Mertens, president and CEO of San Antonio-based IT solutions provider Sirius, a longtime customer of Avnet and now Tech Data, has known Hume for more than 20 years, dating back to Hume’s IBM days. He says Hume took the time to call him directly when Tech Data acquired Avnet Technology Solutions in a $2.6 billion deal that closed in early 2017.
“It was a really good transition for us as they integrated Avnet into Tech Data,” says Mertens, adding that the transition from Dutkowsky has also been smooth. “Rich is such a balanced, polished and very detail-oriented executive. His history at IBM, running their worldwide channel organization, was very good experience for him … it gave him the manufacturer's point of view. And then I think the last few years he’s spent at Tech Data, he's learned the distribution side of the business pretty well. So I think he’s very well equipped for this new role.”
As he settles into the position, Hume will continue to have a sounding board in Dutkowsky, who remains with the company as executive chairman of the board. Hume also intends to bring his own leadership style — which he describes as “collaborate, inclusive and fact-based” — to Tech Data.
“I like to engage in the dialogue across the entire organization,” Hume says. “I fundamentally believe you want to get to the person who's the subject matter expert as it relates to issues or insights, and most of the time that is not necessarily the people who report directly to you.”
Hume realizes his commitment to Tech Data includes the responsibility — and pressure — of continuing the growth track. Even with a slight dip in 2016, this is a company that had $22.1 billion in sales a decade ago, in 2009. It's grown 66% since then — a large target to follow.
“There's one thing that I think about every day and that is my primary objective, which is to be in service to the 14,000 people who work at Tech Data,” he says. “Obviously, we are responsible to our shareholders and giving them a good return on their investment. But I fundamentally believe the way to get that done is through people. If I can help our people develop their careers and help them meet their professional and personal objectives, then everything else will fall into place. That’s my philosophy.”