Five Questions With Westcon Group CEO Tom Dolan

Networking distributor Westcon Group can hardly be accused of resting on its laurels. After building a tremendous business around its three divisions--Comstor for Cisco products, Voda One for Avaya, and Westcon for Nortel Networks--the distributor has been aggressively adding new vendors and emerging technology practices while building a bigger presence in the SMB market. In addition, Westcon Group's Comstor division recently launched a government program, dubbed GOVx, for Cisco partners. VARBusiness recently spoke with CEO Tom Dolan about the new developments at Westcon Group.

VB: Westcon Group has been doing a lot more work in the SMB market. Why?

Dolan: I think the enterprise market has been a little flat, so manufacturers have been focusing more on the small and medium business market, which is good for us and good for distribution as a whole. To win business in the SMB market, you need the channel. And distribution is a great way to reach those SMB resellers. We've surprised ourselves on some of the revenue and market share we've picked up in the SMB space.

VB: What technologies specifically are ripe for SMB?

Dolan: Voice over IP growth is obviously very strong. You're able today to deliver a much higher level of functionality for SMB customers than maybe three or four years ago.

VB: Are vendors themselves making as big an impact in the SMB market?

Dolan: All of our vendors are doing well. We're continuing to work closely with top silos like Cisco, Avaya, Nortel and Check Point. We've added new wireless and security vendors, too--companies like Berbie, Kirk Technologies, FDC Software. Our line card is much bigger today, and we expect that to continue. A lot of these new vendors rely heavily on distribution and the channel to reach the SMB market, so it's a great play for us. We think there's going to be a big burst of wireless activity from vendors soon. We're not sure how many new vendors that will mean for us, but it could be a big number.

VB: You just introduced GOVx for Comstor. What kind of promise does the public sector hold for your company?

Dolan: We've always enjoyed a solid federal business and reasonably good state and local business. The GovX program is an extension of that strategy for Comstor. We're not just jumping into the market. The government market is an interesting one that rewards time and position, especially at the federal level. You have to build a business in the federal market over time, and we've done that.

VB: A lot of distributors today are watching their gross margins and profits crash because of competitive pricing pressure. Being a specialty distributor that's digging deeper into SMB, are you concerned?

Dolan: We're in one of the most competitive markets around today. It's lively and extreme. But there's also a real recognition that distributors bring valuable segments of business from different markets to the vendors. So I think it's a more comfortable market today for distribution because the vendors better recognize that value.