Partnerships Unraveled
The weekly podcast where we unravel the mysteries of partnerships and channel to help you become more successful.
Partnerships Unraveled
Phillip Privett - Inside TD SYNNEX's Al Strategy for the Channel
This week on Partnerships Unraveled, we’re joined by Phillip Privett, a 35-year distribution veteran leading the modern infrastructure strategy at TD SYNNEX. At a time when AI is reshaping every corner of the tech ecosystem, Phillip offers a sharp, insider perspective on why distribution remains not only relevant but indispensable.
In this episode, we dive into:
- How TD SYNNEX is transforming distribution from "pick, pack, and ship" to strategic orchestration.
- The role of AI in accelerating partner enablement and redefining internal operations.
- Why credit is the unsung hero of channel agility and how it fuels partner growth.
- What it takes to combine scale and speed in a global distribution model.
Phillip brings a wealth of hard-won insight and real-world strategies for navigating inflection points, from the rise of cloud to today’s AI revolution.
If you’re building in the channel, this is the playbook you’ll want to hear.
Connect with Phillip: https://www.linkedin.com/in/phillip-privett-77965455/
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Welcome back to Partnerships Unraveled, the podcast where we unravel the mystery about partnerships, and channel on a weekly basis. My name is Alex Whitford, I'm the VP of Revenue here at Channext and this week I'm very excited to welcome our special guest, philip. How are you doing?
Speaker 1:I am doing well, alex, hope you're doing fine.
Speaker 2:I'm doing extremely well we are speaking to. I think it's fair to call you a channel veteran. Maybe, for the uninitiated, you could give us the highlight reel of what the last few years have looked like.
Speaker 1:I can do that, alex. Okay, well, my responsibility is I'm responsible here at Cedent Senate, which is the largest global technology distributor today, and I'm responsible for what we call modern infrastructure. So all the vendors go to market Three TD CENIC for what I would probably best classify it as enterprise grade compute equipment. So very large suppliers data center centric and our AI go to market through what we call Zephn, call destination AI. I've been a distribution now for in excess of 35 years and you could say it's not my. You know the last couple of years have been a really good ride in terms of distribution for me.
Speaker 2:Yeah, I think at 30 years you get your third strife, is that right? So you are officially, you're officially a veteran.
Speaker 1:I'm officially a veteran. Yeah, you could say I'm a veteran Technically. This is my, I think, through a series of mergers and acquisitions, this is the fourth company I've worked for in that period of time, so it's really been interesting.
Speaker 2:Yeah, for sure, and you're, I think, looking after the most interesting business unit in the most interesting area of the channel, which is AI, intersected with distribution, which I think is one hell of a place to be.
Speaker 1:I would agree. It's exciting, for sure. Changes every day, right, just like AI is changing constantly.
Speaker 2:It's a running joke on this podcast, because I love distribution. I spent 10 years either in distributors or running distribution and I don't know. Every five years someone tells me distribution is going to die. Whether it was the migration to cloud, whether it's tax changes, whether it's tariffs, whether now it's AI, why is distribution not dead? And maybe why is distribution able to hard pivot so well and continue to provide value?
Speaker 1:You know that's a great question, I think, you know I always go back mentally to a business report from the early 2000s and I kind of laugh about it still, because, not unlike our partner base and not unlike the suppliers that we represent today, distribution has to constantly morph Right, and not unlike the suppliers that we represent today. But distribution has to constantly morph right. You know, one of the reasons why we're not, you know, necessarily dead today is the critical need for enablement in the channel, and it's the visibility and scale that we have as a distributor that keeps us, I'd say, on the forefront of technology. It's our ability to take what the suppliers do, enable our partners to deliver that technology quickly and then put it out in the market right. So it's that scale and it's beyond something I call LSMST right Logistic, sales, marketing, financial Tech right.
Speaker 1:Those are the table stakes. To be a distributor, you have to do those things at a minimum. So it's what we do in excess of that that has actually kept us in a better place in the market and a bigger value to not only our partners but the vendors we represent as well.
Speaker 2:So yeah, you talk about LSMFT. I think a lot of people lovingly call that pick, pack and ship, which I think that is the old days distribution and, frankly, any distributor that's relying on that as their strategic value add. They died out in about 1983. I think that's long gone. We now see, or certainly I see, the value of distribution as being the people who are able to thread together complex deals, complex go-to-markets, make suggestions to partners, to vendors, around how to knit together and become that sort of orchestrator. What are some of the key inflection points that forced or drove that evolution?
Speaker 1:Defenses in technology is probably primary right. When you look at things like cloud, you know in the early 2000s, right as that was evolving in the market, it required a depth of expertise. It required enablement of the partners to deliver on behalf of the cloud providers. If you think about it, the cloud providers had an excellent value, had a great offering. The problem was how do you get the reseller or the business partner to effectively sell and position that at the end user? So that requires two things. One, it requires enablement and it requires the ability to enable those workers. To a great extent across all markets, right from the very smallest of customers all the way up to large enterprises. They require that enablement at the retailer in order for the supplier to take advantage of the speed of market through distribution at its business partner. So that is obviously an inflection point. Is the changes in technology, when you think about AI today, very big inflection point. The critical thing there is the speed of execution of AI is requiring enablement at a much faster pace and the adoption rate, I think we all agree, is much quicker than cloud, as an example. So it's those inflection points.
Speaker 1:I think that really things like cloud, things like to some extent, believe it or not, covid was an inflection point, obviously right in terms of cyclicality of infrastructure. Today it's AI and the requirements for you know some of the large platforms for AI analysis, but also think modernization of infrastructure for networking, high-speed networking, greater storage capacities or different storage at different locations, differences in technologies. A great example of this is where do you want your data to be analyzed? If it's high-speed analysis, you're looking to get the data in close proximity to your CPU for analysis on a low-latency network. How do you pull all that together? So that requires a lot of technology change.
Speaker 1:So AI itself has caused an inflection point. The reason I mentioned COVID is because so many end companies, end users, decided to upgrade or take the opportunity for that time to change their infrastructure or upgrade, and it's almost developed this cyclicality of replacement in the market. So you see these peaks and valleys, and it's almost. You know. Whereas you might have seen servers getting updated every year, now they seem to be more on a cycle because of the utilization and depreciation of the hardware. So it's it's. There's a lot of things out there from a from an inflection point, but those are some of the big ones, I think yeah, one of the things that I've I also.
Speaker 2:What's that? What's that old expression? Necessity is the mother of invention, right? Um, distributors aren't making, uh, you know, the typical 85 margin that a software brand is right, you, you'd laugh at that, right, that's what, that's what most software companies that's. That's the sort of baseline unit economics of what sas business has to do. Um, but because of that, the requirement for distributors to make money is you have to go and hunt for new value to continue to reinforce and to rebuild and maintain margin at a certain level, and I think that's what is the sort of catalyst for people like yourself to continue to strive for. Where is the market headed? How do we capture the opportunity? How is AI not a threat but actually a mechanism for us to provide new value? Do you sort of see resonance in that strategy?
Speaker 1:Absolutely. I mean especially. You're talking about AI. Look, the ability for distribution to morph over time is a requirement. Like any business, we have to continue to add value in a certain way and demonstrate that value proposition to the suppliers to choose us as a route to their market, but also to our business partners that choose to buy from us.
Speaker 1:From an AI standpoint, probably the most critical thing there is how we not only are helping our partners understand and articulate their value proposition as it relates to AI, but how we do it internally. So, if you think about AI and its effect on us as a distributor, how do we employ AI to make our customer experience better? How do we leverage that AI to look at the data that we've represented around internal data sets? Right, when you think about distribution as a whole, when you think about CDPenix as a whole, we have a very large customer base, a very large supplier base and we are truly multinational. It's not global, if you want it, technically global. So we have a lot of data. How do we use AI to not only look at our customer trends, look at analytics, classify our customer sets so we can help enable them in better ways? I think that's probably one of the better reasons why we're adopting AI not only internally, but also helping partners adopt it.
Speaker 2:Yeah, I'm sort of fascinated by this, both on the podcast, but my job is VP of Revenue at Chanix. We often contextualize AI in sort of three buckets. Which is AI in your product? Look at Microsoft, what they're doing with Copilot Everyone sort of understands that. Ai in your operations how do I do my job better, faster, cheaper every single day. And then AI in the channel. But that's complicated because that is loads of disparate businesses adopting AI independently but potentially cohesively. I speak to channel leaders all the time and go, yeah, we need AI in the channel. And then they don't really have an understanding of what that actually means or even if they do understand what that means, how to actually deploy it. I know you've got some views in terms of why TD Synex and distribution in general is uniquely placed to drive that behavior.
Speaker 1:I would agree.
Speaker 1:I think one of it is the thing I mentioned earlier scale.
Speaker 1:It's the ability to look at our data set, which is extensive.
Speaker 1:We have a huge, as I said, a huge customer base, and that visibility extends not only to the partner level with respect to their suppliers that they're representing in the market, but also the vertical industry.
Speaker 1:When you think about all the vertical industries we serve today, from federal pub sector accounts all the way through health care, lead aerospace we literally serve all those markets right. So that visibility and the ability to employ AI helps us do a couple things. Number one, it helps us refine our processes, which is kind of what you would expect, or, as stated earlier, how we would take AI and leverage it to better our processes, better our customer experience, that kind of thing, but also to look at our data to help our customers find new accounts, new solution offerings. Are they truly leveraging the technologies available and the line card available to deliver better use case outcomes for the customer? That's something that I think we're uniquely positioned to do, but it's the leveraging AI to do that to help us really accelerate. It is really the critical thing how do we accelerate the analysis of our own data set?
Speaker 2:And so you talk about acceleration. I think lots of people call it agility, and the real challenge about building a channel is scale and agility are two sides of the same coin. Right, they are almost the opposite, and I think what we're always looking for as channel leaders is how do I have the power of an oil tanker but the agility of a speedboat? What are some of the things that you feel you can do to galvanize that agility?
Speaker 1:That's another good question. I think the challenge with our scale is that it is literally an oil tanker right. It's trying to turn everybody. I think what makes it work, though, for us in terms of speedboat agility, is really probably a couple of things, and I'll use AI as an example. But when you look at the change in technology, so, first and foremost, it's our job, really it's our responsibility, to work with the suppliers on where they're taking their technology in the near term I mean near term being the next five years. Where are you going in the next five years? And then we're working with that information as much as they're willing to share, obviously, because there's unannounced products and things like that but technology directions and roadmaps are there. We post those technology roadmaps and then we work with our enablement teams that we have to help our partners understand where that technology is going as much as we can do through disclosure, and then, at the same time, help them develop practices to deliver that technology more efficiently and quickly. Great example of that would be AI, so I'll talk about that.
Speaker 1:You know we have a couple of things that we do today. First and foremost is we have to get our own students comfortable in AI. So we have, I think we implemented actually called AI Champions, where we just announced this a few weeks ago as a matter of fact, at one of our conferences on the West Coast. It's the ability for our internal employees, our coworkers, to be enabled in AI and be basically certified in AI from our point of view right, so they can understand how do I employ my day-to-day operations. We actually have ethical use programs around AI internally here at TD Cinex and we train and enable our teams to not only understand AI but to use it in their day-to-day operations. Then we actually look at the balance of how we're going to execute and ramp our partners by looking first at the suppliers. Basically, we grid those suppliers and their AI offerings from, basically, you know, entry level up to expert capabilities, you know complex and then look at our partners and grid them as well and help them understand where they are on their evolution as an AI partner.
Speaker 1:Right, are you able to handle chatbots and some entry level things today? Or are you capable of massive implementations of, you know, large analysis systems and some entry-level things today? Or are you capable of massive implementations of large analysis systems and some of the more complex software offerings and what we do then is use that to help our partners at each level turn quickly. So it's like, if you're entry level and you're just getting started, here's exactly what you can do here the partners that you could partner with in terms of supplier or other products, and then, as you migrate up into the right, here are the suppliers that offer more complex solutions, perhaps higher margins, definitely services, opportunity for customers and implementation.
Speaker 1:How do we take that and drive it and help each partner evolve as quickly as possible to help that speedboat turn right as quickly as we can? I think if I were to sum it all up, though and I know that was a lot, but if I were to sum it all up I would say it's about the specific needs of a reseller when are they at on their journey and how do we help them move as quickly as they can up and to the right. So it's about speed right, and you can't get speed without being very specific, and I think we've done a good job of that. We continue to do that. We've done that on most all technologies right. It's about how do you take partners, put them and classify them where they agree they're all in the same boat and then we agree to get them up and to the right as quickly as possible.
Speaker 2:One of the things I sort of half-jokingly talk about in this podcast is strategy, and people talk a lot about strategy and it's this really clever concept, but actually I often find the greatest things that drive the huge amount of success are some of the real basics done extremely well, and one of the fundaments of distribution is credit and being able to fund and drive the financial performance of the channel Not the sexiest topic in the world, but maybe one of the most powerful. Philip, talk to me about why credit underpins the success of the channel. I think credit is.
Speaker 1:you know it's obviously part of the finance pillar. From a distribution standpoint, credit for distribution is a massive opportunity, especially for the supplier and, in a lot of cases, the reseller themselves. You know, as a company of our size, we spend billions of dollars of credit at any point in time. So we're talking about the ability for our supplier to have an efficient route to market through the partner because they have the available credit to implement the sales they need. But not only is it just credit, as in terms, there are programs we have, like our RSA program, where we have different ability to amplify, to extend payment terms. So maybe instead of 60 days you need 90 days at an end user to close a transaction. We have programs that are built to work with our partners and that they can leverage those to help execute sales. So without credit, everything stops. It's just the way it is. We've got to find a way to make sure our partners have not only the terms that they need but also have the credit tools and offerings that help them match the needs of the end user and execute those sales more efficiently.
Speaker 1:I think that's something we do exceptionally well. I think we've done that well through the years. I think our credit team is one of the best on the planet. I think that's something we do exceptionally well. I think we've done that well through the years. I think our credit team is one of the best on the planet. I think we have a great job. In fact, they're trying to leverage AI now in terms of how do they look at credit facilitation more quickly to offer those credit offerings now. So we look at that partner's history terms, current, you know anything. They want to hear from an audited standpoint and we'll leverage that to help make credit decisions more quickly. So once again, you have a unique opportunity in the market, helping us deliver things like basics, like credit, more effectively.
Speaker 2:And then to me it's funny because we've spoken a lot about ai and technology and sort of understanding where the partner is, but credit is one of the things that fundamentally drives agility right. That's a partner's lifeblood. How do we go and drive execution and drive deal value and drive performance without needing cash in the bank?
Speaker 1:right. You've got to have the facility to take those orders. As I said, I think we do an excellent job of that today. But of the value propositions that we offer today, if you look at the basic block and tackle LSMST, I think they're all equally important, but credit is one that can be the stopper. That's the one that could cause you a problem. I think our partners would say you know that while it's been an interesting ride through the past couple of integrations, we now, as TD Finix, have come to a place where we have probably the best offerings we've ever had and the best credit management teams that we've ever had in terms of getting that out there.
Speaker 2:I mean, that's the critical thing is making sure that when you get the order, the credit is available to take the deal, and that's critical, that's perfect, because I've sat in distribution and I've got to end a quarter and not done my due diligence properly. And then you get there and then order gets rejected and you sit there and go, oh no, and I found that while some people label themselves prevention officers, I found, when push comes to shove, the really great ones are the ones that work out. Okay, how do we get this done? What information do we need? To make a decision and proactively tackle that? And that really is the lifeblood of how you get, how you work through these opportunities.
Speaker 1:Alex, I believe we are there today. You just encapsulated exactly what I'm talking about, right. We have a really good team. They're no longer the sales you know the impediment, right, they're actually the ones helping us facilitate the deals. I mean we've had. We've We've had a program, if I may, for years.
Speaker 1:We call it RSA Receivable Services Addendum which is where, say, I'm a partner with a $5 million line of credit, that's great, I can pay, I can transact a lot of business on $5 million in credit. However, I'm not down a deal that's $15 million. Okay, maybe my credit, maybe my finances aren't in the state for a $15 million transaction, and even if they are, does that mean I'm basically out of my daily business until that particular receivable state? We have a program that we've employed, as I said, rsa. That allows two things that I think are really unique in the market. First is, we will look at that end user and credit qualify them as well. So you know you can think about it as a reseller. You're worried about the end user's payment and their credit capabilities and capacity and all that. However, when you look at the size of CD Cinex and the capability we have to look at the market and all the deeper details. We have the ability to look at that end user and give the partner a better view as to whether or not that end user is capable of that credit to be fair.
Speaker 1:Number one. Number two we have a program that's a very low cost. Actually. It caps out at a very low amount where we will facilitate the order, we will help with the collections of that, but we also take the credit responsibility. So the bad debt risk. So now we take the risk off the reseller. They still have their day-to-day net terms account and then we have this opportunity to go take down these large transactions which, by the way, benefits the reseller over time in terms of their net terms account. They're taking down these $5 and $10 million transactions. Now they may have a $20 million line of credit with them because they're facilitating RSA to do that.
Speaker 1:But eliminating your bad debt at a reseller is huge, right, that is a big deal. So this program is both beneficial in allowing a partner to take down orders they couldn't normally take, but it also takes a lot of the risk out of the way for the partner. So you know things like that where everybody benefits, right, supplier gets the order, customer gets the transaction. They don't have to worry about the bad debt. You know, as long as you're following through on everything they're required to do implement taping services and so forth Everybody wins right. So it's about bringing products to market that are unique. That'll help our partners grow quickly, and that's a great example of one right there.
Speaker 2:Love to hear it. Well, I'm hoping, Philip, I've got enough credit in the bank to ask you one favor, which is we always ask our current guest to recommend our next guest. Who did you have in mind?
Speaker 1:I think I would like to recommend a gentleman by the name of Nick Rogers. So Nick's the VP of Ecosystem for IBM Americas, based out of Atlanta, georgia. Nick's a great guy. He's got a lot of experience in the channel, has run various components of IBM's go-to, still have a lot of direct opportunities with large strategic partners. How he leverages partners in the market to really represent IBM and scale the growth of their portfolio in the market. I think Nick's a great person with a lot of history. On that I think he'd be good to talk to.
Speaker 2:Awesome, excited to have Nick on. And Philip, thank you so much for coming on and sharing your wisdom. It's been awesome. No, thank you very much.
Speaker 1:I appreciate the opportunity.
Speaker 2:Thanks, Sam.
Speaker 1:Thank you.