Q&A: Arrow ECS Co-President Gilroy Takes Stock Of Changes

After Arrow Electronics announced that it picked long-time Hewlett-Packard executive Dave Pansen to head up the HP business unit of its Enterprise Computing Solutions division, Arrow ECS co-president Kevin Gilroy sat down with CRN to talk about where the company is heading now that it has the acquisitions of KeyLink Systems Group and Alternative Technology under its belt.

CRN: What are solution providers going to from Arrow that is different in the next three to six months that they might not be seeing now?

Gilroy: I think they'll see a number of things. I think they've already started to see some of the advantages of a number of our acquisitions. The Alternative Tech acquisition, based out of Denver, has given our customers across the board and our HP customers' access to additional product lines that compliment the HP product line, for example, VMWare or Citrix.

They've seen that and we'll continue to look at our portfolio and make sure that we have a line card that's appropriate. We're not looking to be a broad-liner. We're looking to be a very focused solutions distributor, a value-added solutions distributor, and we'll continue to both organically and where appropriate through M&A continue to build out a solution product set that delights our customers. We're spending a lot of time listening to our customers and what they want to see from us.

I think they'll also see from us, we already do an enormous amount of work in the small and medium business space. You'll continue to see us target that market. Optimize the enterprise "w e still do a lot of work there and we're happy with the work there. There's always room for improvement but you'll see us with a laser-like focus on the small and medium business space, solutions in the small and medium business space, enterprise-lite in the small and medium business space.

CRN: Arrow has named Pansen to head the HP group, but its IBM operations are lead by Eric Williams and Mark Taylor as two divisions " the ECS and the KeyLink IBM groups. Why the difference?

Gilroy: You have to look at the organizational structures that we've put in place. In IBM we did announce, and again there are different reasons for it talking to our suppliers and taking a look at the way that some of the customers buy, we have announced that we'll be hiring a world-wide or global IBM leader. We're out on a search to do that right now, so it's a little bit different structure. With HP we decided to keep it regional.

CRN: Are they going to be considered for that or are you looking to bring in somebody from the outside?

Gilroy: We will go outside for the global leadership position for IBM.

CRN: Any idea when that will be?

Gilroy: We do have a pipeline but we're going to be very deliberate about that decision. Mark and Eric are doing a great job running North America. We have some leadership in Europe doing a great job running the IBM business there and growing that business organically so there's really no rush. We're going to find the right person.

CRN: What do you say to VARs that have some concerns about the changes in general at Arrow and the end of some long-time relationships they've had?

Gilroy: I think there is change, particularly in the HP business unit, but we're not bringing in somebody that the channel doesn't know. Dave Pansen is a very well-known channel executive with a great history. He's been a participant in many of the HP advisory councils. He knows most of the customers. He's been written about in your publication. He knows Arrow from managing distribution and he knows it well. He also knows HP from having worked there for 18 years or so.

In addition, I'm there and I know HP pretty well and the customers pretty well. Between the combination of Dave and I, I don't think there's much concern. In the Arrow and KeyLink HP business units we have very strong sales leaders that are in place. The customers' sales teams are strong. We're not making any changes there.

The customer-facing [team] won't change. The executive team has one change in Dave, but again I think based on his background this won't be too uncomfortable for the partners He has a very aggressive plan next week to reach out to the customers and most of them, not all of them, but most of them, he knows.

CRN: Can you guarantee that there will not be changes in the sales staff?

Gilroy: Dave's going to run the business. I'm not going to micro-manage him, but at this point in time, I don't see in the foreseeable future any changes in the sales force.

CRN: Once VARs see executive changes they worry about their local field relationships.

Gilroy: Dave managed KeyLink and Dave managed Arrow, so he knows the management team at legacy HP Arrow very well. He knows the sales management team at KeyLink very well. Again this wont' be the traditional entry into the company from somebody on the outside. He's coming in as a very familiar face.

NEXT: More changes ahead for Gilroy's team?

CRN: The team that's going to be reporting to you now, are they fully in place or are you still looking to fill in any gaps?

Gilroy: I'm still looking for a global manager for IBM, and I'm looking for a global manager for software/solutions. We think there's synergy. We have a huge software business and are building that both in North American and Europe, and we think it makes sense to make sure we have a global leader there with the right thought leadership. We have strong in-region managers running the quarterly business and the yearly business, but we will reach out and hire thought leaders in both software ad the IBM global position.

CRN: You know HP very well and you know IBM very well as a competitor to HP. What about the Alternative Technology vendors? Is there anything that's stuck out in terms of what they do well or the vendors that they have? Do they compliment the traditional Arrow business better than you expected?

Gilroy: They have. Alternative Tech has been just a real fantastic opportunity for us " the cross selling that's going on, the teaming that's going on between our legacy business units and Alternative Tech have been nothing short of stellar. Our VMWare business is a great example. It's growing very rapidly. We're doing extremely well with them. The Citrix business is doing extremely well. Those are two providers, that obviously VMWare under the EMC banner I knew a bit about, but I've gotten to know them a well. The Alternative Tech business model has some really interesting characteristics to it. There are some deep training programs that go on there. There are certification programs. It's a very intimate business. They have a broad customer list but they maintain a very intimate, working relationship with those customers. The suppliers are delighted. The customers are delighted.

[Alternative Technology president and COO] Bill Botti, who manages that business for me has just been a super dynamo on the team, not only running his business in Denver but he's also shared a lot of his experiences, a lot of his creativity and a lot of his best practices with the other business units. Best practice sharing is going on at the highest level now and it's also going on at the working level. We're really excited about optimizing Alternative Tech across all of the platforms.

CRN: Can you give us an example of a best practice you'd like to see move throughout Arrow?

Gilroy: I think their training and certification practice is really superb. People go to Alternative Tech and can get quickly certified on products. They're a real high-speed on-ramp into the marketplace for our VAR base. They do that in a very credible way, but a very high-speed way. We have VARs in our practices, our HP practice and our IBM practice, they want to get into some of the product lines that Alternative Tech has. That on-ramp is high speed. They can get into that product set through the certification and training programs very fast. They can get up and running quickly.

It's one of the fastest on-ramps to a product that I've seen since I've been in the channel which is 25 years.

CRN: Can you give a good cross-selling example that's come out of Alternative Technology and one of the other groups?

Gilroy: We've seen it across all of the platforms. We've seen the storage utilization practice grow as we match up some of the capabilities of Alternative Tech with our storage platforms, EMC for example. We've seen the server virtualization business go up. Hardware and server virtualization software optimizing the customer solution, we've seen that.

We've seen a lot of Citrix security practices and solutions are being put in place with our traditional hardware sales. We're seeing the solutions become a bigger part of our business every single day. The transformation from pure hardware to solutions is going on at a faster pace than I would have expected before I joined Arrow.