IT spending may be tight in North America, but Tech Data Canada isn’t seeing it.
“I’m very pleased with what’s going on in Canada,” said Rick Reid, president of the broadline distributor’s Canadian division, following the release of the company’s latest quarterly report.
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Data had revenue of just over $5 billion (all figures U.S.) for the period ending April 30, with a net income of $33.5 million. That was up from the same period in 2004.
However, it was short of analyst’s expectations.The distributor blamed the poorer than expected results on sales in Europe and the Middle East. It’s started a multi-million dollar restructuring program for those areas.
The company doesn’t break out sales figures for geographies, but Reid said in this country “we continue to grow at a rate faster than the (IT) industry,” with revenues up seven per cent over 2004.
Generally the industry was expected to grow at about four per cent this year over last.
According to a recent Gartner report, IT spending by North American enterprises continues to trend downward from anticipated 2005 budgets, with larger organizations are most likely to be reining in IT capital spending.
“We’re not seeing that,” said Reid. While he wouldn’t cite numbers, he said there was a “dramatic increase” in the last quarter in shipments.
Part of that he credited to a five per cent increase in government spending.
Spending by all buyers on software was up 30 per cent over the same period in 2004, while sales of supplies and consumables rose almost the same amount.
However, there was a “slight drop-off” in the division’s components business. “That business is under pressure as there’s a move from white boxes to notebooks,” he said, a move system builders here haven’t adapted to well enough.
As for Ingram Micro Canada’s move recently to dismiss general manager Murray Wright, partly in the name of supporting that company’s North American-region strategy, Reid said there are no plans now for Tech Data to assume more control over its Canadian subsidiary.
However, he noted that the division already has integrated its logistics, human resource and accounting systems with its U.S. head office.
“I believe strongly that the sale and marketing entity is so unique in Canada that it has to be managed and controlled locally.
“Tech Data will always have a form of Mr. Canada in place as that go-to person to pull all those different entities if required.”
Wright’s replacement will be based here, but Ingram took away the country manager’s sales responsibilities and created a separate vice-president of sales for Canada, also based here.
