CDW: More Services Coming

Having identified 53,000 midsize and large customers, CDW is placing them within its new sales-force structure of five U.S. geographic regions and 32 smaller districts within those regions, Edwardson told financial analysts in a conference call on CDW’s first-quarter results.

“We chose a logical approach to balance customers with account reps and strengthen our customers and service partner relationships,” Edwardson said. “Now that we have finished the initial rollout, our corporate sales force is adapting. This will allow us to focus on providing more service offerings around the box, including core services that are simple and scalable--configuration, break/fix and warranties. It also allows us to provide adjacent services such as installation and migration. Our approach is to design and create solid partner networks and a straightforward go-to-market strategy.”

CDW didn’t detail any updates to its partner strategy or how changes might be implemented, but Edwardson later emphasized that the company’s services would include a significant partner engagement model to fulfill the services.

“I have not been enamored with huge numbers of [service] people in the field. We want to build partnerships,” he said. “That will not preclude us from making an acquisition.”

Edwardson added that his experience at Ameritech led him to believe it’s difficult to build a large, internal field-service force. “We had trucks all over the place, and trying to coordinate all that activity [was not easy],” he said.

“We’re trying to stay close to what we sell, [to] support hardware. We have been doing much of that. Our configuration and imaging capabilities have increased significantly,” he added. “With our geographic realignment, we can more effectively work with service partners around the country.”

For the first quarter ended March 31, CDW’s sales totaled $1.59 billion, up 7.7 percent from $1.48 billion a year earlier. First-quarter 2006 earnings came in at $61.7 million, or 75 cents per diluted share, compared with $61.4 million, or 72 cents per diluted share, a year ago. Thomson Financial/First Call’s consensus analyst forecast for CDW’s 2006 first quarter was for earnings of 74 cents per share on $1.58 billion in sales.

It was the second consecutive quarter that CDW’s revenue growth was less than 10 percent, the first time that had occurred since the third quarter of 2003. The Vernon Hills, Ill.-based solution provider’s sales rose 6.6 percent year over year in the 2005 fourth quarter.

CDW’s corporate sales to commercial customers climbed 5.7 percent to $1.15 billion, lagging behind public-sector sales from CDW-G, a company unit that saw a 13.4 percent increase in sales to $438.4 million.

Shares of CDW increased 7 percent, or $4.27, to $61.70 in trading Tuesday morning.