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Tech Data announced record sales and earnings for the fourth fiscal quarter ended Jan. 30 and afterward CEO Bob Dutkowsky spoke with CRN's Scott Campbell about the results and the company's strategy regarding everything from consumer electronics to the cloud. The following are excerpts from the conversation:
You're VAR business accounted for 53 percent of sales in the recently-completed fiscal year, up from 50 percent in the prior year. Meanwhile, your direct marketer sales fell to 26 percent from 30 percent. Is that a case of your increased focus on SMB VARs, or are direct marketers really struggling right now or buying from other sources?
More of the former. As we've said the last couple years, our focus is more on SMB. That's the spot vendor partners want us to cover and penetrate. They target many more backend dollars for SMB than anywhere else. They can cover the direct marketers pretty efficiently on their own. Many of them have removed back end incentives on sales to DMRs. Our numbers reflect our focus on SMB first and foremost. But some of that change is the way the vendors manage the back end.
We've also made it a conscious effort to move into the consumer electronics space. We have some of their retailer business that last year we weren't even selling to. There's growth in retail and we have new customers that would be retailers.
How did you get more involved in retailers? Are more vendors asking you to serve those customers or are more VARs expanding into selling consumer products?
It's a little bit of both. One vendor in particular asked us to handle 1,500 [retail] customers of theirs that we didn't even sell to. We built the coverage model, offered credit and grew our business with those customers. That gave us a jump start into second-tier retail. We are not talking about the big box guys. They deal direct. It's the next tier down. Those customers are very appreciative of our delivery capabilities and credit capacity. It's been a good combination.
Did I hear right on the analysts call that you expect your Advanced Infrastructure Solutions and Azlan business to be $6 billion for fiscal 2012, up from $5 billion this year?
No, we came in [Fiscal 2011] at $6 billion when we thought it would be $5 billion.
Where did that extra billion come from? What attributed to that extra growth?
We added some new products and were able to grow those aggressively in the second half of the year. Quite frankly, we're taking share in that space.
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