Westcon's Chairman Reflects On 25 Years In the Channel

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Westcon Group celebrates its 25th anniversary this month and founder and chairman (and former CEO) Tom Dolan recently spoke with CRN’s Scott Campbell about the company’s beginnings, growth and what to expect going forward. The following are excerpts from the conversation.

Let’s start at the beginning. What was the genesis of the company? What were you guys focused on back then?

It was 1985 and we were all about PC networking. Companies like Novell and 3com were blazing new paths of PC networking. Our objective was to get into that business. We functioned as a VAR for about a year, focused on anything around that technology. At a certain point, we were landing some larger opportunities and one of our manufacturers asked us if we could take care of some small dealers that wanted to buy five or 10 network interface cards at a time. We said sure, we’d do that.

We had left our last employment and we got paid with a system in lieu of compensation. We walked away with what would called today an ERP system. Then it was an order processing system and as we got into the business of taking care of small dealers, andwe had a system to handle it. It was easy and efficient. We liked working with dealers from day one. We liked being closely associated with technology that was driving the business. After 18 to 24 months, we made the strategic decision to spin the end user business off to a couple of dealers and focus on wholesale.

What was the name of the company you guys had come from?

Access Data Products. It was a small VAR, focused on the data point, mini-computer environment and the PC market. Data point went the way of Wang, Prime, Digital Equipment, with all the big mini computers.

How long were you there?

Personally, less than six months. The other [founders] were there for a while. We wanted to divert the business’s attention to PC networking. The rest of the company was of another mind.

What was Westcon’s big break, what was the turning point?

We were originally called Westcon Associates. We did nicely. We had a nice small business and had some good customers. Then one day I read in LAN magazine, about Ethernet over twisted pair. That was the big break. We realized being in the New York area that we had unlimited opportunity for that product. We marshaled all of the resources we had to get an order into a company called SynOptics. Our first order was nearly $1 million. When it arrived, we had boxes everywhere. It covered our floor.

When you received $1 million product, how much of it did you have sold in advance?

We had no run rate, no open orders. We had to make that commitment to get the line. It was a risk that we took but it worked. We had year-over-year geometric growth and revenue. Then with the launch of the Internet in the mid-1990s that created lots of business for us. By 1996, we had offices around the U.S., Canada, Australia and in China.

We realized that we had to arrange more access to capital to maintain the growth. Interestingly, distribution’s use of capital was not as efficient as it today. In those days, your inventory was not turning as quickly. You really absorbed capital as a group. We were fortunate a company called Datatec had a synergistic vision with us. They were right in line with what we wanted to do. By 1998, when that acquisition happened, they bought the majority of the company and we had the support capital to support growth and acquisitions and built Westcon into a worldwide company.

Next: The Wild, Wild West Days Are Over

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