It’s been a common occurrence for the channel, forever watching the Australian Securities Exchange (ASX) ticker codes, waiting for DDR to spike.
Otherwise known to the industry as Dicker Data, news of its purchase has been both predicted and expected.
But for those passing by the Sydney suburb of Kurnell, home of Dicker Data’s expanding empire, seldom was a For Sale sign ever raised.
While ownership of the Australian- born business perhaps has come close to changing hands in the past, the future poses a different reality for the underdog distributor.
Well, Dicker Data is hardly a dark horse.
Fresh from reporting revenue of $1.2 billion for the 2016 financial year, the business is no longer the whippersnapper of the Australian channel, rather the wise old head examining its options.
“Our long-term strategy has to be focused on becoming bigger, or we’ll end up screwed,” Dicker Data chairman and founder David Dicker said.
Predictably candid, Dicker’s perception of the market is simple — eat or be eaten.
It’s the law of the channel jungle, a jungle now crammed with overseas predators waiting to pounce. So in response, Dicker is going for the jugular too.
“We need to look to the overseas markets ourselves also,” he said. “I’m working on what our opportunities are currently and examining the possibilities out there.
“Our plan is to look at the UK market or Europe. Asia is complicated and the US is too hard to get into.
“I’ve been thinking about it for a long time but things are still progressing as it will come down to the vendor aspect and whether we can bring vendors across. If so, then it could be viable.”
While no means an admission of European expansion, Dicker is merely acknowledging that action - in whatever capacity - is required for Dicker Data to remain at the forefront of distribution.
In looking ahead to the future, the ASX-listed business is once again building blocks for growth, in a market that lies potentially over 16,000km away.
“If you look at the UK market,” Dicker explained. “Culturally, it’s very similar to Australia. It’s probably the market that is most similar to here.
“It’s a much bigger market and is geographically compact which is a huge advantage over Australia. From my point of view, it ticks every box.”
Despite concerns over the implications, if any, of Brexit, the UK market represents a lucrative opportunity with IT spend currently hovering around the US$180 billion mark, compared to $85 billion in Australia.
Gunning for growth
Renowned as predictable and profitable, Dicker Data has climbed the channel ladder in Australia for over 35 years, now selling to more than 6,500 resellers across the country, backed by a host of flagship vendor brands such as HP, Hewlett Packard Enterprise, Cisco, Microsoft and other tier-1 players.
Behind only global titans Ingram Micro and Synnex in terms of local revenue, the ASX-listed business has become a force to be reckoned with on both sides of the Tasman.
“I think we’re probably still perceived as a bit of an underdog,” Dicker argued. “And Ingram is still perceived as Ingram. In fact, I don’t think the dynamic has really changed there.
“Ingram is 40-50 times bigger worldwide than we are so you have to be realistic.”
Irrespective of perception however, the proof continues to be in the pudding for the business, with Dicker Data winning distribution rights to Hewlett Packard Enterprise in early 2016, taking on and taking out competition from multi-nationals such as Avnet and Synnex.
With 2017 now underway, such momentum continues across the board, as vendors see value in aligning with local distributors, emphasised through new deals with Trend Micro and Seagate.
“We’ve always pushed the advantage of having a local distributor rather than being a multi-national, which I still think is a valid argument,” Dicker said. “The numbers are what matter though. If you are making your number, you’re in good shape.
“If you aren’t making your number, then you’re under threat. On the commercial side in Australia we’re number one, but again, that’s only in Australia.”
But despite plans to continue growth through proactive reseller enablement, Dicker is shrewd enough to acknowledge the turnaround at Ingram Micro and the continued success at Synnex.
Both distributors are reporting over $2 billion in revenue and equally, have strong local ambitions.
“We have to respect the competition,” Dicker added. “That’s the nature of the game. “Ingram has expanded in Australia for 20 years and they have been trying to kill us ever since they started but they haven’t been able to.