On the earnings call, you said you are “bullish” about distribution. Why?
If you look at the technologies that drove the growth in 2025, I think we’ll continue to have a good story for 2026. The PC refresh is not over – we should continue to see it at least for the first half. Then the memory price increase is driving an ASP increase, and usually that has a positive effect on revenue. The weight of AI PCs continues to increase, which, again, will have an impact on the average selling price.
The only unknown on PC is what will be the impact of the price increase on demand? My view is, it will be significant on consumer and less so on commercial. And we are positioned on commercial; we do very little PC resale through retail – that’s a market we more or less exited many years ago.
The hackers are getting more and more creative, so the demand for security solutions will continue to increase. The momentum on cloud is there. Companies continue to move their workloads to the cloud, so growth will be very healthy. I don’t think we’ll experience the same growth rates as a company next year in software, but there’s no reason why it shouldn’t continue to grow at least mid single digit.
In servers and compute, we still have a refresh of the existing base happening in the market, so that’s a tailwind. And the second tailwind I see for servers is of course AI. In distribution, the weight of AI servers continues to be relatively low. So as companies invest in AI factories, I think we should see some nice benefits from that, and we have the leading vendors to participate.
Storage is probably for the moment my wild card, so let’s see what comes there. That’s the area where I’m a little bit cautious still. And I hope this year we’re going to see networking come back and it should contribute to the growth of the market and TD Synnex.
How likely is it you’ll make an acquisition in 2026?
I hope it’s high because we’ve been working diligently to identify opportunities. It’s a matter of price, making sure the culture is compatible, and closing the deal.
M&A is part of the strategy. It has served us very well. The acquisition of Avnet created a lot of value for Tech Data. The merger between Tech Data and Synnex created a lot of value for TD Synnex. We have a history of successful integrations and so it’s really part of our strategy.
We are working actively and then hopefully we are going to close one, one or two. We’ll see.
What’s your most outrageous prediction for 2026?
I would say the risk of allocation is real. This memory story is interesting. It started quietly in October last year and now it’s exploding.
If indeed it gets tougher to get the memories, what happened during the pandemic will happen again. Prioritisation of memories to certain categories of product would create disruption in the market.
Doug Woodburn is editor of IT Channel Oxygen
