CompuCom CEO Kevin Shank: ‘I Have Unfinished Business Here’
‘I have a lot of people that know me here, that remember the CompuCom that was focused on those enterprise-class customers and delivering world-class service and growing fast. And I firmly believe we can do that again,’ new CompuCom CEO Kevin Shank tells CRN.
When Kevin Shank took the reins last month as the new CEO of global IT solution provider CompuCom, it was in a way a homecoming for him. Shank had spent nine years at CompuCom, leaving the company in early 2014 as executive vice president, to join Pivot Technology Solutions as CEO until Pivot was acquired by Computacenter in late 2020 to become that company’s CEO.
While CompuCom has a long history as an IT solution provider and MSP, its time as an independent company was considerably shorter. CompuCom in 2017 was acquired by ODP, the parent company of Office Depot, in a billion-dollar deal, only to be sold in December 2021 for just over $300 million to an affiliate of Variant Equity Advisors, a Los Angeles-based equity firm specializing in corporate divestitures.
Shank, in a recent exclusive interview with CRN, said that while CompuCom was a part of ODP it lost its enterprise focus. CompuCom previously had carved a strong business catering to the Fortune 1000-type enterprise customers, but the siren call of end-user computing was too strong to resist, especially as CompuCom became part of ODP, which had a strong SMB to midmarket focus.
“A lot of people saw opportunity there,” he said. “Office Depot obviously saw an opportunity there. This happened after I left. But I think that took a lot of the focus of the company away from large enterprise customers, where the company really thrived and was well respected. And it changed the focus of the company a bit.”
While selling products remains an important part of CompuCom’s business, it is only one part of the solution provider’s strategy for growing its enterprise business, Shank said.
“I see us putting some emphasis on growing [the product] part of our business because I think it leads to transformation, it leads to professional services and advisory services,” he said. “And ultimately, we want to manage that technology when it’s in place, to help deploy it and manage it for our customers. And that is our space. That’s who CompuCom is.”
Here is more about who CompuCom is and what it hopes to become going forward.
Congratulations on your appointment as CompuCom CEO. First, define CompuCom.
CompuCom is a products and services company. It’s really a technology and services company focused on enterprise-class customers, Fortune 1000-size, both public and private.
CompuCom in early 2022 became an independent company after being owned by ODP for some time. What has changed at CompuCom since the spin-out?
I think it allows us to really focus on CompuCom’s core market. And again, I would tie that to the Fortune 1000-type customers who buy technology, who integrate technology, who use technology to support their business and their customers. And when customers do that at scale and use a lot of technology, we want to be their partner. We want to be their partner in their journey where they go with their technology road map.
Where do you see customers going with their technology journey? What are you looking forward to in 2023?
When you look at the market as a whole, for every customer I talked to, it’s their hybrid working environment, their digital workplace. It’s how you get technology in and make your employees productive, and do it in a secure fashion. So I think first and foremost on a lot of our customers’ minds is secure environments and supporting employees in many, many locations in many countries, and doing that in a very secure way. We also obviously sell a lot of networking gear. And so we see there’s more video, there’s more data going over the network. Much more demand on networks. So we see opportunity at the edge especially. We deploy technology for customers at scale, and we do it well.
Regarding product mix, how important is hardware versus services for CompuCom? And how do you see that changing going forward?
Let’s break our side of the industry down into three pieces. First, customers are buying technology to transform their business and buying the services and professional and advisory services that go around that transformation. Leveraging that technology in the workplace is the second. And the third piece is managing and supporting it, and then removing that equipment when it’s end-of-life. CompuCom competes best when we are in more than one of those three areas. So I believe product is key to our strategy. I believe selling technology is key to our strategy. And it’s where we start to differentiate from some of our competitors. When products are a key part of the solution our customers are looking for, we differentiate well. Products are very important in our overall equation and where we fit in the technology space. And I see us putting some emphasis on growing that part of our business because I think it leads to transformation, it leads to professional services and advisory services. And ultimately, we want to manage that technology when it’s in place, to help deploy it and manage it for our customers. And that is our space. That’s who CompuCom is. We want to do that at scale for large blue-chip customers.
Is the mix between the different parts of the business changing going forward? Do you see services as a bigger part of the business going forward?
I want to grow both parts. I think CRN had just named me the top growth executive in North America, [on the 2022 Fast Growth 150 list] literally right before I departed my last role [at Computacenter]. So I’m here to grow this business. And I think I’m well versed in how to do that. I want to grow both products and services. One of the things that surprised me, in a good way, when I got back to CompuCom, is the global capabilities the company has developed. We have very sizable capabilities in India and Mexico, two countries I’m very familiar with. And I know the power and capability that those countries have and how they can help us support our clients. But I’m also equally impressed with what we still have in the U.S. and Canada, and the customer base that we have. So I see us with a great opportunity to bring that together with the right focus around the right customer base. And as we get further away from the previous ownership, and more back to CompuCom-focused, I think we’ll be able to execute that much better.
CompuCom is now 100 percent owned by a private equity firm, Variant Equity Advisors. What does Variant bring to CompuCom besides helping it become independent of ODP?
I’ll answer it this way because I think it’s true of all private equity entities. I’ve worked for private companies, PE-owned companies, and with a public company called Pivot [Technology Solutions]. I’ve been part of three or four different private equity companies. What PE brings is speed of change. CompuCom needs to be quick to take advantage of changes in the marketplace. And what Variant brings is a lot of talent around the industry, and lots of energy around quickly changing the business in a positive way. PE companies like to invest in companies and change the enterprise value of those companies. And one of the reasons I’m here, I believe, is that they’ve seen my ability, and CompuCom’s, ability to do that in the past, to combine assets and make a better company. You’ve heard the old saying that one plus one equals three. I think we have a wonderful chance to do that with the right equity partner, and I think Variant is the right equity partner help CompuCom to do that.
You were part of CompuCom until Dec. 31, 2013, and so you left the company before it was acquired by ODP.
[In August of 2013,] we sold CompuCom to Thomas H. Lee Partners, a very sizable private equity company out of Boston. At that time, CompuCom had grown to the point that, if you look at the Gartner Magic Quadrant back in those days, we were the leader in the desktop workspace business, and so that was a time when I could part ways.
After you left CompuCom, you probably kept at least one eye open on what was happening here. How did CompuCom change between when it was independent and when it was acquired by ODP? And how is it different now that it is independent again?
If you think about what was going on in technology at that point, it was the advent of tablets. People were carrying more powerful smartphones. People were wondering where the desktop and laptop technology was going to go in the future with all these other new devices. And there was this big discussion about whether it was going to be ‘N plus 1,’ a laptop plus all these things, or were laptops going to go away and it was all going to be about tablets. Well, the future has now spoken. And it’s all of the above. I think CompuCom had really carved out a very solid foundation in end-user compute and service desk in that Fortune 1000-type customer base. We were a very well-known, well-branded company, and very well respected in that space. And I think some of the changes in the industry, after [I] left, led it to look at, should they shift the business? Should they look at going downstream into the midmarket and small- and medium-size customers? Look at what was happening with Best Buy and the Geek Squad and around retail.
A lot of people saw opportunity there. Office Depot obviously saw an opportunity there. This happened after I left. But I think that took a lot of the focus of the company away from large enterprise customers, where the company really thrived and was well respected. And it changed the focus of the company a bit. I can’t talk about whether that was good or bad or indifferent. I had left CompuCom and became CEO of Pivot and helped Pivot on its journey later to sell it to Computacenter in November of 2020. You’ve seen the results: When I departed Computacenter, CRN had just named me the No. 1 [Fast Growth 150] executive in North America. I’ve been in the industry 30 years. I know a lot of the private equity companies, and the public companies. I know a lot of the OEM partners, the distribution partners. And I saw a wonderful opportunity to come back and help CompuCom, and I want to be here. I probably had other opportunities, but I wanted to be here. I have unfinished business here. I have a lot of people that know me here, that remember the CompuCom that was focused on those enterprise-class customers and delivering world-class service and growing fast. And I firmly believe we can do that again.
Private equity has been an important part of CompuCom.
One funny story comes from when we were owned by Platinum Equity. A little background: Platinum Equity, out of Beverly Hills, [in 2004] acquired CompuCom, which was a public company. I was not part of that. And then they bought a carved-out portion of General Electric, GE IT Solutions. I came in from the GE business. We took a business that was very process-driven. Back in those days, GE was the most admired company in the world, the first company to hit a billion-dollar market cap. And we brought an operating discipline and a service-focused way of doing business to CompuCom, which was very entrepreneurial and grew up in the whole PC explosion. We put those two companies together and made a wonderful business. We grew it organically significantly.
Here’s the punchline: [Platinum Equity Chairman and CEO] Tom Gores sells the business roughly three years later. I can’t even tell you the return, but it was a good one. He ended up buying the Detroit Pistons shortly thereafter. So I like to tell everybody, A, I know the owner of Detroit Pistons and B, CompuCom actually led to his acquisition of the Detroit Pistons. So it’s kind of a little funny. Is it 100 percent accurate? Could be. I just don’t know if it is or not, but I’m pretty sure it was a part of it. It’s definitely a part of it.
After Court Square Capital Partners bought CompuCom from Platinum [in 2007], we went out and acquired Getronics. And that was owned by a telco in in the Netherlands, KPN Ventures. Again, we integrated those businesses and made a much stronger CompuCom and a much happier customer base. And we provided more scale, more reach, more touch and more capabilities to our customers, and we helped our customers on their technology path. …
I know [private equity is] not always the answer, but my experience with PE firms has been very positive. They buy companies to invest in them and grow them. 100 percent. That’s been my experience. And I just laid out the track record with Platinum Equity, Court Square. Not only growth through inorganic methods, we grew the businesses organically. We made a better company, and we won in the marketplace. Same opportunity with Variant. I’m very happy Variant owns CompuCom. I’m very happy we’re back focused on the right marketplace. And I’m very happy that a lot of the people that know how to go on that journey are here with us today, and the new people I’m very impressed with as well.
So what is your mandate from the board as the new CEO?
They want success. I wouldn’t say that I’ve got a chiseled-in-stone kind of mandate, but they want success. They want growth and success and happy customers. This business at one time, and it’s still here today, is client-focused. We’re humbled when we come into our customers. We want to grow with our customers. And we want customers to be around a long, long time. And that approach to our customer base is so important to the heritage of the company and where it’s going. And I fully want to support that as we take the business forward. But the board wants success, they want profitable growth, they want to invest in this business and to lead down that path of being a good partner who delivers what they say they’re going to do, who listens closely, is very intimate with our customers.