Arrow's Coleman Outlines Services, Expansion Goals

ARROW ELECTRONICS HIRED ED COLEMAN AS PRESIDENT OF ITS NORTH AMERICAN COMPUTER PRODUCTS GROUP BECAUSE OF HIS EXPERIENCE TRANSFORMING COMPUCOM FROM A SOLUTION PROVIDER FOCUSED ON PRODUCTS TO A SERVICES-RICH BUSINESS. COLEMAN RECENTLY TALKED WITH EDITOR HEATHER CLANCY ABOUT HIS GOALS TO DO THE SAME FOR THE DISTRIBUTOR AND ADVICE FOR HIS SOLUTION PROVIDER CUSTOMERS IN 2006.

CRN: Talk about strategic priorities for 2006. What do you see happening in the market?

COLEMAN: From CompuCom, I am carrying with me the same philosophy: A services business is the only long-run differentiation you can have. In this business, we have to make sure we continue to focus on delivering the highest-quality services in our space. That&'s a big one for me. It&'s somewhat philosophical, but it&'s also actionable.Second, resellers are all looking to grow their way up the value chain and focus more on solutions rather than just hardware/software product fulfillment. We&'ve got to be right alongside them and leading them, helping them develop [and] take solutions to market. The third one is geographic. We just completed an acquisition of [DNSint.com] in Germany. That gives us a foundation to build a strong business in Europe.

CRN: Are you looking to other emerging markets, such as China or India?

COLEMAN: Not at this point. Our long-term goal would be for [Arrow] to be a global business. Right now, we are focused on this first expansion outside North America. We will build that business, and down the road, we may look at other geographies.

CRN: Why is the European market important for you?

COLEMAN: It&'s a real growth opportunity, and it&'s important to be a global player as opposed to a regional player. It also helps us build stronger relationships with manufacturers we represent. DNS is the leading Sun distributor in their marketplace. We think combining gives us a stronger and deeper relationship with Sun. DNS also has a growing relationship with IBM. They have relationships with some key software suppliers that we would like to have similar relationships [with] in North America. Likewise, we have OEM relationships in North America that we would like to expand into the DNS marketplace.

CRN: What impact does European expansion have on a VAR in Houston? What does a North American enterprise VAR gain out of your European expansion? Are they also looking to grow globally?

COLEMAN: Potentially. I think that&'s a case by case with individual VARs. Better, deeper, tighter relationships with the manufacturers, that helps all of our reseller partners that deal with that manufacturers&' products and services. Also, the European distribution market has tended to be a leader for increased value-add. We can learn from DNS how to work our own way up the value add chain. CRN: What product areas are you looking at in 2006?

COLEMAN: We&'re growing our government business. We&'ve been quite successful, but there are tremendous growth opportunities out there. Our services business is a real opportunity to add value to resellers. CRN: Can you provide a specific example of that?

COLEMAN: We&'ve worked with resellers on traditional break-fix renewal service contracts. They&'ve been selling manufacturers&' contracts. Beyond that, there are lot of service opportunities in managed services that you need a set of skills to take advantage of, up to higher value more consultative services as well.

CRN: What role does an Arrow play in that MSP area?

COLEMAN: We can help them understand what it takes to sell those services successfully and with some of the traditional services: training, education, go-to-market strategies. Also there is a business planning element of this, which is helping the VAR assess what opportunities for managed services are in their marketplace today.

CRN: What is Arrow doing around software?

COLEMAN: The various OEMs that we represent are very similar in their key solution areas for 2006 and beyond. It&'s compliance solutions, backup and recovery, e-mail infrastructure, workload migration solutions, storage management, virtualization, ILM [information life-cycle management]. They all require a reseller to go to market with a combination of hardware, software and services packaged together. Our role is to help them develop that solution, represent the product lines necessary to build the solution as well as a technical and professional skills to design the solution.

CRN: Anything else on your mind?

COLEMAN: A big area is making certain we focus on business quality. If we&'re doing the same things two, three, four years out that we do today and our resellers are doing the same thing, that&'s not a good place to be. We need to help them bring more value to the end-user marketplace and work their way up the value chain. Together, we can create a healthier channel that is ever more necessary to the OEMs.