Tech Data CEO: We`re About Matching VARs with Opportunities

It’s closing in on two years since Bob Dutkowsky, the former CEO of J.D. Edwards and Egenera, came to Clearwater, Fla., to become only the third CEO in Tech Data’s 35-year history. Under Dutkowsky’s leadership, which has included a host of executive changes and a re-commitment to fostering relationships with resellers, the company has posted solid gains in both revenues and new customers. Tech Data finished FY 2008 with net income of $108.3 million, a huge turnaround from the $97 million loss it suffered in 2007. 

At the company’s spring TechSelect event in Las Vegas last week–where 250 of Tech Data’s SMB solution providers gathered to discuss trends, opportunities and business growth–Dutkowsky sat down with Channel Insider editor-in-chief Chris Gonsalves to talk about how the distributor will use its credit clout, a growing roster of VAR services, and continued global expansion to maintain the momentum.

Q: All of the solution providers here are talking about trying to get a leg up on the next big thing in the channel: Virtualization, next-gen services, VOIP, telepresence. What’s Tech Data doing to keep SMB VARs ahead of the adoption curve?

BD: We think that’s one of our value adds. That’s the role distribution plays; to see where the opportunities are going to be and begin to condition the channel, through training, education, technical support, marketing programs, and get them ready for what’s going to happen. We’re real good at the here and now. If you want to sell someone a laptop, nobody can do it more efficiently and effectively and reliably, and at a lower price point than we can.

But the real issue is, ‘what’s the next thing?’ We’ve dedicated a lot of resources to answering that question. Take blades for example. They are very large in the enterprise, but they’re not real large in the SMB space. But they are coming. And the virtualization that makes blades productive, that’s coming. The midrange storage products that are workhorses in the enterprise, they are coming to SMBs in a big way.

So, we’re dedicating a lot of resources to that and things like security problems and wireless and networking infrastructures. These are all very different things at the SMB level than they are in the enterprise.

Q. Before you start teaching the folks how, don’t they want to know why?

BD: Clearly they have to see the opportunity to make money. The best way to clearly show them that is to say that these technologies are coming whether they are involved with them or not. You can try to stop virtualization in the SMB space, too bad, it’s not going to work. It’s coming, You can try to stop VOIP in the lower-end space, but Cisco has built a whole set of products targeted at that, Microsoft has a whole set of products. It’s coming. So if they don’t migrate to that next technology–that next opportunity–they are going to get left behind. It’s our job to make sure they see the opportunity clearly, that they see the chance to make money, to retain their customers. Then we need to train them up so they are capable of supporting that market opportunity as it unfolds.

The real trick is to find the one emerging technology that is not obvious. Our theory is that, because of the strength of our relationships with our vendors who are spending billions in R&D to find these breakout technologies, that we should see these things earlier than anybody else. Cisco shows us what they are working on. HP shows us what they’re working on. We know where they are investing, so we can position ourselves and get the VARs ready for those products.