Any doubts remaining about distributor Tech Data’s strategy of diversifying its broadline business with new, higher-touch, more solution-driven approach? According to CEO Bob Dutkowsky, you shouldn’t. And he’s got the data points to back it up.
A few years ago, Tech Data’s revenues were very much centred around the traditional desktop business, Dutkowsky told a gathering of Canadian channel press at the distributor’s Canadian headquarters in Mississauga, Ont. Thursday morning. Fast forward to the present, and revenues are about an even split between that broadline business, and four new value-added practice areas: the data centre, software, mobility, and consumer electronics.
“This is not your father’s Tech Data anymore,” Dutkowsky quipped.
That balance is not entirely the case in Canada, and may never be, admitted Tech Data Canada president Rick Reid. The mobility play isn’t quite as developed in Canada and is it in the U.S. as yet, for example, and the second version of the company’s StreamOne software program, in which the distributor is launching what it describes as an enterprise app store for VARs, won’t launch in Canada until this summer.
In Canada, data centre is a star underneath the company’s Advanced Infrastructure Solutions banner, representing what Reid calls “the fastest growing part of our business today.” But the company has historically made the decision not to dabble on consumer electronics in this country. There are hints, though, that could change soon.
“There are opportunities presenting themselves to get us into that space,” Reid said. But he cautioned that the company was not seeking to be a full broadline distie in the CE space. “That’s very well taken care of today by the two incumbents. All we could do there is split that business, and we don’t want to do that.”
Dutkowsky discussed his approach to working with subsidiaries, describing a fair bit of freedom for Tech Data organizations outstide the U.S. to decide their own fate and what directions in which to invest, assuming, of course, they meet the revenue and growth expectations from Clearwater.
The CEO described Canada as a consistent, predictable country for Tech Data. “They don’t always hit it the furthest, but it’s always down the middle of the fairway,” he said, adding that Canada “is leading the way” for Tech Data in a number of areas, most notably execution of the overall strategy and the configuration business.
Looking broader at the business, Dutkowsky said that by mixing the broadline and value-added business, and building up the capacity to spin up practices around hot new technology areas, he feels his company has a unique advantage over its competitors in terms of agility.
“Wherever the world, wherever technology goes in the next five years, we’re in a good spot,” he said. “A few short years ago, we were not. And many of our competitors still are not. But now, we’re the real, true end-to-end IT distributor in the world.”
And moreover, with its focus on the data centre as the infrastructure, software as the deliverable, and endpoints, mobile devices, and consumer electronics as drivers, Dutkowsky said he feels that Tech Data now has “the most robust cloud practice in the channel,” and is aiming to help solution providers figure out their own role in the cloud.
I had the opportunity to sit down with Dutkowsky during his visit to discuss one-on-one his strategy for growth with the distributor. Check out part one of our video interview below – Dutkowsky also discusses what he sees as the two biggest opportunities in underserved markets by the channel. (Here’s a hint: they’re areas in which Tech Data is investing heavily.)
That cues it up for parts two and three of my chat with Dutkowsky, which will tackle Tech Data’s software strategy and the opportunity in the mobile market, respectively. Be on the lookout for those on the site very soon.