Saturday, November 26, 2011
Friday, November 25, 2011
Tech Data CEO: Smartphone Support Is Next Big Thing
As the CEO of Tech Data , Bob Dutkowsky sits at the
center of all things technology, from consumer electronics to enterprise data
centers and everything in between. Following the distributor's third-quarter
earnings report Monday, Dutkowsky spoke to CRN's Scott Campbell and answered
questions around HP (NYSE:HPQ)'s PSG group, and channel opportunities for
Ultrabooks, smartphones and more. The following are excerpts from the
conversation.
Everybody is concerned about global debt and the
European economy, but your European sales were up 10 percent year-over-year,
compared to a 3-percent increase in the Americas. Why did Europe perform
better?
Well, that 10 percent is net of currency. On a
constant-currency basis, it's up 6 percent. But we did have some acquisitions.
We bought Triad in October of last year, so there's a bit of that [in the
year-over-year comparisons]. The other piece of it is we're very selective in
the revenue we go after. We may have chosen to go after a little more of the
market more aggressively in Europe than the Americas. For us, revenue is one
leg of the three-legged stool. We're very interested in market share, but we're
also very interested in profitability of the business and we're very interested
in return on invested capital, things like payment terms, inventory that we buy
to get benefits from vendors to get the return we want. We sell $100 million
worth of goods a day and our average order is under $1,000. We're looking at
all three things on every deal we do.
So every opportunity is different. For example, we
may have a big direct marketer that wants us to bid on $100 million worth of
printers. That might be very attractive to a revenue point of view but the
payment terms they want might not be interesting to us. The top line looks like
better to a competitor so they win the deal.
On the conference call with analysts, you mention
that you don't think there will be any disruption going forward surrounding
HP's Personal Systems Group, a sale of which is now off the table. But looking
back, was there any disruption during the period where its future was up in the
air?
It was an unsettled month and a half when Leo
[Apotheker, ex-HP CEO] said they would sell it and then Meg [Whitman, HP CEO]
said they weren't going to sell. I'm going to say it was weeks or something
like that. During that time, HP worked very closely with us to stayed focus on
the selling opportunity in the market.
During that time, I'm sure other vendors were after
you to help them grab share from HP. How do you balance what those vendors want
with what you're doing with HP, which is your biggest vendor?
In reality, it's what the reseller wants. If a
reseller is committed to HP, it doesn't matter what other vendors bring to the
table. People are trained on HP, they're positioning HP in the market. This
answer just doesn't fit HP but all the vendors we serve. If the reseller is
committed to Apple, it doesn't matter what other PC vendors bring to table. If
they're committed to HP, it doesn't matter what other PC vendors bring to the
table. The relationship between reseller, Tech Data and vendor is more complex
than just one product. They sell multiple products, with multiple incentives
based on total revenue. When one product division does something, it won't
necessarily impact what others do.
During that time there were lots of resellers that
came us and said, 'What do you think this means?' Obviously HP was in constant
communication with us to make sure we had the facts, and what they really
thinking of. They wanted us articulating the facts, not innuendo. I met with Todd
Bradley right in the middle of that six-week period. He asked us to communicate
to every reseller could find. That's the basis of a partnership. We're together
through thick and thin.
You said on the analyst call that you expect
product constraints around hard drives due to the flooding in Thailand, but
it's too early to say how much. Do you think the constraints could give a boost
to other storage technologies such as solid state drives?
It's really hard to tell what the impact is going
to be. Most vendors think there is an early-next year resolution to whatever
challenges they're faced with. I don't think the challenge will make customers
make a dramatic shift away from hard drives. But I do think customers who buy
notebooks might instead look to buy a tablet instead. The other thing from
vendors is that I think they'll put a limited number of drives into more
fully-configured boxes. So rather than stick a valuable drive into a low-level
laptop, they'll put it into a machine with more memory or a bigger screen.
Because of that, I think [average selling prices] have the potential of moving
up just a little bit. Anytime a product gets into allocation, we may see an
opportunity to make a little more money from those products.
Also, companies that are able to make the biggest
buys and cover the most terrirory are the ones to get the most allocation.
We'll get our fair share. If there's product to be had, I'm confident we'll
have it.
We're starting to hear a lot from vendors around
the Ultrabooks that are due next year. Do you think they will be the game
changers that the manufacturers say they will be?
One of the beauties of new technology is we don't
have to make that market, the vendor has to make that market. They have to
convince [customers] that the Ultrabook is the next great thing. They will come
to us with incentive dollars, but to be frank they haven't come to us yet.
We're selling stuff on the shelves. We're still selling notebooks, we still
have some Netbooks and the tablet form factor is obviously hot right now, along
with smartphones.
Speaking of mobile solutions, can you update us on
TDMobility, your new initiative to get VARs more involved with phones and
carriers?
TDMobility is launched. That was a combination of
Tech Data , Bright Star and the organization we bought together, OTBT, which
has a VAR activation offering. TDMobility is in limited launch. We haven't
opened it up to all VARs yet because we want to make sure the processes work
because potentially there's a lot of volume to be thrown at it. VARs are out
there selling laptops and systems but their customer doesn't draw the line
between laptop and smartphone. They do e-mail on both of them. The reality is
the VAR didn't sell them the smartphone and doesn't get paid to support it. But
to the [end user's] mind, it's e-mail and the VAR's responsibility is e-mail.
The problem is the VARs don't get into it because
the phones are subsidized by the carriers. A phone costs $600 but you can get
it for $99. With VARs, the more cell phones they sold, the more cash flow
problems they had. That's what TDMobility does. That's what ActivateIT
does…Thirty days later Tech Data pays the VAR the rebate and the VAR gets the
cash flow. It's a unique offering in the channel.
All the carriers have wanted to get to VARs, but
they can't figure out how to. They already know how to get to consumers and to
big business. TDMobility solves that problem.
These numbers may be off a bit, but Intel said for
every [600] cell phones sold, the world needs another server. For every [122]
tablets, the world needs another server. Someone needs to manage that data.
Eighty percent of the world's data is created on mobile devices.
Follow @venkateshcv
Google Slashes Price Of Cloud Chromebooks
Google has cut the
price of its Google Chrome books line of cloud notebooks, the search giant
revealed this week.
The holiday price reduction comes as Google also tweaked the
Chromebooks interface.
"[W]e're excited to share that beginning this week Acer
and Samsung Chromebooks will be available starting at $299. The updated prices
will be available through our online retail partners," Google Senior
Product Manager Venkat Rapaka wrote in a blog post about the Chromebook price
drop.
The price cut shaves about $130 off of Samsung's average
Chromebook price, and about $50 off of Acer's.
Google first unveiled Chromebooks at its Google I/O
conference. Chromebooks are billed as cloud-in-a-box notebooks that access apps
through a Web portal. The devices, viewed as laptop hybrids, run Google's
Chrome OS and Chrome browser over Wi-Fi and 3G for users to access Google Apps
and other business applications via the Web. So far, Chromebooks have had an
uphill climb in the tablet-dominated computing landscape.
Google channel partners are also still awaiting the green
light to start selling Google Chromebooks. Google has said that Chromebooks
could reach the channel by the end of the year. In the meantime, some cloud
solution providers have been launching services around Chromebooks.
Along with cutting the Chromebook price, Google this week
also updated the Chromebook interface, giving the operating system a facelift.
Some new features include a new login screen; a revamped New Tab page that
Google said makes it easier to manage apps, bookmarks and most visited sites;
and Google has added new shortcuts to the New Tab page including shortcuts to
the File Manager on the Chromebook and to music apps and games in the Chrome
Web Store. Google also retooled the Chrome Web Store to let users scan images
to find apps and extensions.
Google also revealed that Samsung will launch a new black
version of its Wi-Fi only Chromebook Series 5 in the U.S. for the holidays.
Google Chromebooks from Samsung and Acer went on sale in
June. The cloud-focused notebooks come equipped with Google's Chrome OS and
look to be a lower-cost cloud alternative to the Windows PC stranglehold.
Google also launched a subscription service for Chromebooks through which
businesses can rent them on a three-year refresh cycle with support, warranty
and Web-based management included for a roughly $30 monthly fee per unit.
Google has already teamed up with Citrix and VMware for some
enterprise applications to work on Google Chromebooks. And in August, Google
updated Chrome OS to add support for VPN, secure Wi-Fi (802.1x) and access to
virtualized applications through Citrix Receiver, enhancements that could make
Chromebooks more attractive to enterprises.
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