Bell Micro Branches Out

DON BELL HAS BEEN A BUSY MAN THIS FALL. THE CHAIRMAN, PRESIDENT AND CEO OF BELL MICROPRODUCTS OVERSAW THE ACQUISITION OF PROSYS INFORMATION SYSTEMS AND THE APPOINTMENT OF FORMER INGRAM MICRO EXECUTIVE MIKE GRAINGER TO THE SAN JOSE, CALIF.-BASED DISTRIBUTOR'S BOARD. BELL RECENTLY SPOKE WITH DISTRIBUTION EDITOR SCOTT CAMPBELL ABOUT THE LATEST INITIATIVES AND WHAT'S NEXT FOR THE COMPANY.

CRN: What led to former Ingram Micro president and COO Mike Grainger being named to Bell Micro's board?

BELL: We're always trying to find people to put on the board in various ways, whether it be for governance, financial knowledge, knowledge of the industry or good solid, overall management experience. I've known Mike Grainger for the past 10 years or so. I knew he had a very big job with the leading company in our industry. I thought he would make a good board member.

CRN: Grainger sits on the board of another public distributor, ScanSource. Were there any concerns about a conflict of interest?

BELL: We don't compete with ScanSource. I have the utmost respect for them, but they are in a different part of the market. We don't see any issues, and Mike had that OK'd by them and us.

CRN: Is it true that the Bell Micro board has a mandatory retirement policy for its CEO at the age of 70? If so, is Grainger's addition to the board a precursor to him joining the company in an executive position?

BELL: No. Mike will strictly be a board member. We hope sometime there will be a succession, and Mike will be a key contributor in picking my successor, as you would expect a member of the board to be. As far as mandatory retirement, there is none in the company. Heck, I'd sure like that. I'd have more fun.

CRN: Bell Micro has long been a storage-focused company, but it seems like the company is branching out. Is it going through a transformation or an evolution?

BELL: We're continuing to go through an evolution of the business. If you don't do that, you're in trouble. Our business is made up geographically of North America, Latin America and Europe. It's no secret that we are having profit problems in Europe, as are a lot of people. We are spending a good amount of time there to get it fixed. In the U.S. operations, we continue to make good money with our enterprise [distribution] group and Rorke Data and our reseller [unit]. They continue to flourish, and we will continue to roll out value-add in our business.

CRN: Over the past few months, Bell Micro has added vendors such as Red Hat and D-Link. Are you looking to expand beyond storage, or do you view this as rounding out your storage solutions?

BELL: I think it's more rounding out. That's the case when you look at other companies we've signed, like Apple, where we sell primarily their enterprise storage products but have access to the whole product line. We'll expand our product offerings in that area. We came at this from a storage-centric view. We represent a lot of the leaders like Hitachi [Data Systems] and [Hewlett-Packard]. As we look at this market, storage is tied to things like networking and computers. We will round out those product areas but stay with a limited line.

CRN: Why were you looking to buy a reseller like ProSys?

BELL: We bought a reseller, TotalTec, in 2001. We had always planned to expand that concept, but we were busy doing other acquisitions and didn't roll out that concept as well as we wanted to. We've been talking a couple of years with ProSys. The business will generate almost $500 million now. We are hoping to grow that business to $1 billion by the middle of 2008. We're looking at more acquisitions on the West Coast and Midwest. We hope to do it earlier, but we don't want to jump into something for the sake of doing it.

CRN: You've managed to run distribution and solution provider units with minimal conflict for several years. Does ProSys affect that model?

BELL: We run the businesses independently of each other. They run on different systems. Information is not shared. We concentrate on doing that, and we do it very well. A year ago, a [distribution] customer called up all angry and said we were competing with him. A week later, he called up and said he wanted to have dinner. I said, 'Oh, my god.' I took a deep breath and said, 'How is everything?' He said, 'Fine.' I said, 'How about the problem?' He said, 'You fixed it.' There is co-opetition. Our challenge is to build a technical capability to supply to end users and other resellers that complement the business we have.