Vendor expands Canadian presence, plots course for aggressive growth
If you don’t think of cables as a high-value part of the solutions you’re delivering to customers, Cables To Go would like to have a word with you.
The company has made expansion in Canada a priority over the last year, and recently introduced its first Canadian country manager in industry veteran Dave Walsh. Walsh’s missions: Make cabling sexy. His approach: Point out how profitable it can be.
“You quickly realize it’s the glue in many of these solutions,” Walsh said. “It’s required, and you have to do it well.”
And you can make it a nice little margin component as well – Cables To Go’s studies show instances of partners making 28 per cent margins over the course of three years.
“This is a very profitable product,” Walsh stressed. It’s not necessarily a big part of any given solution, but compared to the slim margins often associated with hardware sales, it can make up an important part of the profitability mix for solution providers, particularly those focused on high-growth (and cabling-intensive) markets like the data centre and digital signage.
Cables To Go, based out of Dayton, Ohio, has long been available in Canada through distribution partners including D&H Canada, Ingram Micro Canada, Positive Marketing A/V, Synnex Canada and Tech Data Canada, but last June identified Canada as its third target market, after its home country and the UK. And it’s set aggressive goals for the expansion.
“We’re planning on growing 100 per cent every year,” Walsh said. “This is a core growth initiative for the company.”
In his new role, Walsh said the early-day priorities are identifying both the total accessible market and realistic accessible market and the channels by which to reach those markets.
But there’s a challenge to be addressed: getting resellers to think of cabling as a proactive, even differentiated, part of a solution. Too often, he said it’s something solution providers offer as a way of completing the solution, but seldom put much thought into. As Walsh describes it, many solution providers are aware of cabling, but only posthumously.
He’s betting that education (both on the product line and the profitability it brings) can switch that up.
The company offers three product lines, each with a variety of types of cables – its pure “commodity” basic lineup of cables and “unique commodity” products that add some additional value on top of the basic lineup, Cat5 cables with pull-through guard and protection, for example, and at the top of the line, its RapidRun top lineup, or “differentiated” product.
RapidRun is largely focused on audio/video cables, and promises greater flexibility, faster installation and easier upgradability. The product family is largely targeted at the education market, although corporate customers, digital signage and even home theatre enthusiasts are also important markets.
Although the company stresses its high-end products, Walsh says “the margins are there at every level.”
With a background in the channel, it’s already rolled out all the usual channel program elements, including co-op and MDF, incentives and even a configurator that helps solution providers walk through the 5,500 or so SKUs the company offers. The tools are available in English today, and Walsh said they would be launched in French by the summer.
“They recognize the nuances and uniqueness of the Canadian marketplace,” Walsh said of the Ohio-based parent company.
Another differentiator for the company is its channel focus, Walsh suggested. While competitors are significantly invested in the retail market, Cables To Go has largely focused on IT solution providers and DMRs.
Horizontally, company sees audio/video integrators and digital signage as big opportunities and is actively pursuing partners in those fields. That should be no surprise, given that Cables To Go figures that cabling makes up one to two per cent of the typical IT install, but more like four to five per cent in the AV world.
The company has already partnered with major digital signage display companies, working for example with NEC to do in-store signage for Yum! Brand stores such as KFC and Taco Bell. But there’s still “a white space,” Walsh estimates, in the independent audio/video integrator market.
“We’re looking to identify those partners and then pursue the market,” he said.
Vertically, Walsh said the company is pursuing healthcare and education as its most important growth markets, as both are “funded for growth,” with priorities around electronic medical records and in-ward information displays in healthcare and connected classroom strategies representing about a $160,000 per school priority.