Tech Data's Bets On Tablets, Mobility Paying Off

Tablets are such a hot commodity at Tech Data that the distributor is practically selling them almost as fast as it can get them, said CEO Bob Dutkowsky.

The company doesn't release sales figures for tablets, but Dutkowsky said they've quickly become one of the fastest-growing product categories at Tech Data and he advises VARs to offer more mobile products as both commercial users and consumers increasingly want access to information anytime and anywhere.

"The tablet business, suffice to say, that's where the growth is through the VAR channel into the enterprise Dutkowsky said.

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In its recently completed 2012 fiscal year, the majority of tablet sales went to commercial accounts, not consumers, Dutkowsky added.

In addition, tablet sales have not impacted Tech Data's desktop or notebook sales because they are a different form factor for customers, who buy them to complement PCs and not replace them, Dutkowsky said.

"It fills a void. Before, if you were on the road you either had to look at a spreadsheet on your cell phone or take a laptop which is heavy to carry around and takes forever to boot up," Dutkowsky said. "All that creates opportunity for companies like Tech Data. We can take more products to solve different problems."

Dutkowsky personally owns several tablets because he tries the newest products from several vendors that Tech Data carries, he said. He currently prefers Research In Motion's Playbook because of its 7-inch screen but also uses an Apple iPad and Lenovo and Acer tablets.

The demand for tablets, as well as for smartphones and the applications for those devices, is the big reason Tech Data spent two years developing its new TDMobility group, Dutkowsky said.

Mobility sales accounted for about $2 billion of Tech Data's $26.49 billion sales for fiscal 2012, up from "about $1 billion" in the previous fiscal year, Dutkowsky said.

"VARs are salivating at the growth in the mobility market. But for a long time it was hard. They could never figure out how to make money in it. Every VAR tried it but they'd end up going to the AT&T or T-Mobile store and then try to get paid by the customer. That was no way to make money," Dutkowsky said. "We've been working to get this [TDMobility], which is almost like an ERP system for mobile products, into the U.S."

Meanwhile, one of the biggest mobile vendors in the market, Apple, continues to make big strides in the channel, Dutkowsky said.

"Apple sees the opportunity in the enterprise and their products are enterprise-ready in terms of quality and ease of use and form factor," he said. "And it's not just iPhones and iPads. Its laptops and desktops and all the infrastructure around Apple. It's aggressively finding its way into the enterprise."

Next: Ease of Use, Even For A Two-And-A-Half-Year-Old Toddler

Apple is also doing a wonderful job creating mindshare with future generations of workers, Dutkowsky added. He marvels at how his two-and-a-half-year-old grandson can use an iPod Touch with ease.

"The kid can barely speak but he knows which button turns it on, how to sweep the screen, key in the security code, pick the app he likes, rotate the screen around to do all things you have to do, change apps and shut it off. You think that kid is going to go back and read books? That kid is a completely digitally-minded person from here on forward," Dutkowsky said. "That interface has changed the way we access technology. The real opportunity is how is that going to get into the enterprise."

With up to 90 percent of all data now being stored on mobile devices, there needs to be proper infrastructure to manage it all, said Dutkowsky. Enter "big data," the data center, networking, storage and security solutions offered every day by solution providers, he said.

Dutkowsky also noted that tech data's enterprise business, including its Advanced Infrastructure Solutions unit in North America and Azlan unit in Europe, generated $7 billion in sales in fiscal 2012, which ended Jan. 31, up from $6 billion the previous fiscal year.