Westcon CEO Stays In Front Of Market

Tom Dolan, president and CEO of Westcon Group, Tarrytown, N.Y., recently spoke with Managing Editor/News Larry Hooper at the distributor's Voda One Convergence summit in Tempe, Ariz. Dolan spoke about Westcon's IPO status, what solution providers should know about the convergence market and what's next for the distributor.

CRN: Westcon Group filed for an initial public offering in March 2004, but nothing has happened. What's the status?

DOLAN: We have stepped out of the registration process. I believe we will step back in at an appropriate point. The company has sufficient capital to run and to grow at or above the speed of the market and to make the acquisitions that we need to make. So, there is no urgency to go public. I hope it's an eventuality.

CRN: Given recent successful IPOs such as Google, is sometime soon appropriate?

DOLAN: My view is very company-centric. It's a result of having been a founder of the company and with the company so long. My job is to run the company well and serve our customers very well. Our investors and our board of directors are certainly interested in an IPO, so that's a goal.

CRN: You mentioned acquisitions. Are there particular gaps you are considering filling?

DOLAN: What's happening in the industry is that our area of focus, networking, has really become an area of focus on convergence. As you have seen us do in the past, we often need to make a stepped increase in skill level in an area that complements what we're doing. For example, in [2000] we bought PBX distributors [Inacom Communications and CCA Technologies] so we would have the full voice capability to be as prepared as we are today to support VoIP and convergence. So, as you see us make moves in the future, you will see us plotting toward what we expect the next wave of opportunity for our customers to be.

CRN: What is the next wave in 2005?

DOLAN: There's a number of very exciting developments on the table. For example, the role of your mobile phone vs. your desk phone is going to change.

CRN: You are talking about wireless WAN to wireless LAN roaming?

DOLAN: Yes, roaming, and jumping on your corporate network and eventually having classes of professionals who only have one handset and don't have a desk set. Then you add the PDA and e-mail and instant messaging and that's convergence. As that occurs, we are going to need to add certain elements to our game plan. The personal experience that people have with the advanced mobile sets is that it's very difficult to get all the features working, so that's going to be an opportunity for our customer base. CRN: What role would Westcon Group play in that?

DOLAN: Telephony and data infrastructure were sold for so many years because everyone needed it. Then your late-adopter [customers such as] government and schools became very active. When your percent of business from schools becomes high, you know you are in the late adoption phase. The early adopters now are buying return on investment based on applications. Here [at the Voda One Convergence Summit] are about 23 different applications that will run on a converged voice and data network. In the same fashion, a year or two from now, you should be seeing us complement this mobile to roaming. And then we'll have the training. More of our focus is on training the salespeople how to sell. And of course we provide training on how to install and support the product. But the essence of what we do as a value-added distributor is help people get into markets and then be successful in markets. As the markets evolve, we have to be slightly in front of it.

CRN: When it comes to selling products that are "in front" of the market, do you have to sell the concept to VARs, too?

DOLAN: Usually [with VARs], it's more of how do I take this generic technical proposal and apply that to my customer base? And what do I do to my company to make it successful in the market?

CRN: Where are we on the convergence adoption curve?

DOLAN: We still sell a lot of traditional telephony. And we sell a lot of desk sets. But you can see the portion of new quotes that involve an IP component or that are IP—that number is going up dramatically. Well over half involve an IP component.

CRN: Are applications driving these sales, or are the companies replacing their phone systems future-proofing with IP?

DOLAN: All of the marque sales involve an application, but probably 70 percent go out without an application driving it. We do see that changing.