Tech Data a Laggard No More?

Tech Data over the years has played the role of laggard as other large distributors have rushed to adapt to changing market pressures and the evolution of technology.

It’s an approach that often has paid off for the world’s second largest IT distributor, but don’t think it will remain de rigueur. CEO Bob Dutkowsky said in an interview with The Channel Insider that the company will employ a “ready, aim, fire” approach whenever it deems appropriate.

Such was the case when Tech Data, a $22 billion distributor in Clearwater, Fla., in February entered a joint venture with wireless products wholesaler Brightstar to distribute mobile phones and wireless devices throughout Europe under the name Brightstar Europe Ltd.

Dutkowsky, who took over the company nine months ago, said Tech Data moved swiftly on the Brightstar deal because it was a good opportunity and, “if Brightstar didn’t sign up with us, it would sign up with somebody else.”

The company isn’t abandoning its methodical ways, though, Dutkowsky pointed out. In cases when it makes sense, such as figuring out how to play in managed services, Tech Data will retain its measured, cautious strategy.

Be it the measured approach or “ready, aim, fire,” Tech Data will employ on a case-by-case basis the one that best advances the company’s three-pronged strategy, he said. That strategy revolves around execution, diversification and innovation.

The execution part simply means Tech Data will continue striving to improve and invest in its capabilities. Diversification has to do with the geographic regions and types of products in which the company decides to invest, said Dutkowsky, citing Brightstar as an example of this.

The innovation prong, he said, is guided by efforts to become more efficient and be easier to do business with from the customer perspective. For instance, Tech Data recently launched a demand-generation online tool, MyOpportunityTracker, which mines VARs’ purchase data to make recommendations on follow-up calls that could translate to sales.

John Tonnison, senior vice president of IT for Tech Data Americas, said the tool, which tracks purchases as far back as a year, should generate sales for VARs that otherwise would not have happened. As a laptop’s battery life comes to an end, for instance, the tool prompts a VAR to suggest the customer buy a new battery, he said.

Dutkowsky said another example of Tech Data’s strategy was the launch this year of the Advanced Infrastructure Solutions group, focused on growing markets such as virtualization, server consolidation, and storage and business continuity.

Those technologies, based on industry standards such as x86, are growing and encroaching on what once was territory exclusive to proprietary Unix systems. Tech Data has never carried Unix products.

“We think there’s a tremendous opportunity as standard technologies replace proprietary technologies,” said Dutkowsky. “Unix is not dead, but it will atrophy over time.”

The Advanced Infrastructure group is part of Tech Data’s push to work with emerging technologies, and more initiatives focused on such things as VOIP (voice over IP) and digital signage will follow, Dutkowsky said. He also sees potential in areas such as open source and SAAS (software as a service).

“There is an opportunity there with software as a service and the channel is going to have to learn how to fit into that opportunity and how to add value to it,” he said.

Dutkowsky took over as Tech Data CEO in October from Steve Raymund, who remains as chairman. In his first nine months, Dutkowsky said, he has been pleased with what he has learned about the company—its deep relationships with supplies and customers, industry knowledge and skilled work force.

He said he is optimistic about the immediate future, especially as the SMB (small and midsize business) market, which is the customer base of the VARs and integrators Tech Data suppliers, continues to grow and create jobs.

Also contributing to his optimism is what he called positive results from the efforts the company has undertaken to return its European operations to profitability.

“Those efforts are beginning to pay off now,” he said.