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Improving the channel's bottom line

Improving the channel's bottom line

Westcon COO, Dean Douglas, talks to ARN about market strategies and the distributor's plans in 2009

Dean Douglas

Dean Douglas

Dean Douglas joined Westcon Group as global chief operating officer six months ago and boasts of an illustrious career in the IT space including senior management roles with IBM, Motorola and wireless engineering group, LCC International. He was recently in town to meet with the distributor’s Australian team and caught up with NADIA CAMERON to talk about growth plans, market sentiment and where distribution is headed.

What’s at the top of your to-do list? Dean Douglas (DD): The macro-economic climate is probably foremost on everyone’s to-do list. The reason it’s at the top of the list, and in its own category it seems, is that the crystal ball is very foggy. As a result, it presents an interesting set of challenges – do you gut it out and hope it recovers quickly, or do you start to take moves today that put you in a better position down the road? What we have done is the latter, and we’ve done it in a number of ways which I think will help the industry through transition.

As a distributor, customer empathy is very important for us. It’s the resellers we are concerned about and we want to make sure they have the wherewithal to buy in this climate. There will be demand – it may be less than in the past, but there will be demand. So making sure they are comfortable to go forward is important. We are fortunate that John O’Malley [Westcon Group CFO] did a great job of putting together a set of long-term financial instruments that allow us to have extraordinary lines of credit back in August 2007. We plan to use that, as well as some cash flow, and make it available to customers in order for them to be able to buy.

There are a number of different models we could take, depending on the laws of each country we operate in, and it depends on the rules the vendors have with customers. We had a meeting a few weeks ago with our top US customers and unveiled a program to ensure they don’t have cash constraints. In Australia, we will continue to underscore that.

Isn’t credit being squeezed out of the channel?

DD: Credit is being squeezed out of the channel, and that’s where the challenge lies. The opportunity is to figure out how to structure different types of deals to allow for our customers to buy product and have sufficient credit to run their business. We won’t be wildly irresponsible, but there are risk mitigating ways for both parties that allow for transactions to proceed. It’s difficult for me to talk about this in broad strokes because it does depend on the vendor, but the good news is there’s several different paths we can go down.

How are you seeing the state of the market globally and in A/NZ?

DD: So far, we haven’t seen a significant deterioration of our business in A/NZ and that’s positive. We may not – there are certain economies in Asia that will continue to do okay. It really does depend on the length and breadth of the economic slowdown. It’s interesting to see many countries in the world, and Australia is one of them, are investing heavily from a government standpoint in forward investments, or augmenting the money they would have spent in order to keep the economy going. It’s a great move that will help our industry and channels.

Has the market downturn affected Westcon’s go-to-market strategy?

DD: We continue to invest in our go-to-market and in opportunities in the SMB space. That’s probably the space that gets hit the hardest in a downturn, but there really hasn’t been much done in SMB in the past and we want to be prepared. We will look at each country we operate in and the market segments we address – be it convergence, security or routers – and monitor that closely. Given we use one IT system across the globe, we have real information we can use to manage the business.

In an interview with ARN last year, Bill Corbin [Westcon global chief for strategic vendor relations] highlighted globalisation as a key driver for Westcon. How far along is this push?

DD: We are getting a great deal of interest in creating much more efficient processes around how multinationals deploy ICT equipment and security infrastructure globally. What’s happened is that in most countries, the communications infrastructure, Web access and the like is developed to such an extent that it’s almost first-world irrespective of where you are. Entities are wrestling with managing that effectively, making sure they don’t create a security hole in those third-world markets but still provide the functionality that allows for that productivity to have real benefit to the entity as a whole. We are able to provide that capability and are seeing a great deal of interest.

Is there more to do around your globalisation strategy?

DD: Last year, we did roughly 20,000 cross-border transactions, so it’s gotten to be pretty robust. What we have done is elevated it from a reporting standpoint out of each geographic regions into a global view so it gets the investment and focus it needs.


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