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'Change Or Be Changed:' Zones Nfrastructure CEO Dan Pickett's Lessons For Forward-Thinking Solution Providers

‘If we don't continue to change and be an adaptive company, then we're not going to be able to change proactively on our terms—we'll be forced to changed reactively because of our competitors or market forces,’ says Zones Nfrastructure CEO Dan Pickett.

Zones Nfrastructure CEO Dan Pickett had to navigate a lot of change to get the company he started in the basement of his parents' liquor store to life as the $2.5 billion powerhouse it is today, and he argues that solution providers of all stripes can learn and use the lessons he's applied along the way to keep themselves on top of trends transforming the IT market today.

Those lessons, Pickett said at the 2018 Best of Breed Conference in Philadelphia Tuesday, can be boiled down to: Change or be changed; ensure market alignment; and pick your spots and engagement.

"If we don't continue to change and be an adaptive company, then we're not going to be able to change proactively on our terms—we'll be forced to changed reactively because of our competitors or market forces," Pickett said. "Zones was a reseller that was struggling with integration, and struggling to add the 'V' to reseller and be a value-added reseller," he said.

Change, for solution providers, often comes in the form of their customers' need to adapt to increasingly demanding and competitive markets, Pickett said. "Customers are looking for outcomes. They're not looking to buy stuff. They're looking to buy outcomes. Your outcome better be better than your competitors, or you're not going to win."

The force of change has led major IT vendors to innovate their business models, emphasizing services over products, cloud over on-premises solutions, software over hardware, Pickett said. That drive is moving quickly toward widespread adoption of technologies like artificial intelligence, machine learning, natural language processing and the Internet of Things.

Some old-school companies have transformed to meet the challenges of new, tech-focused competitors. Pickett pointed to Cadillac, which has introduced a car subscription service that meets the demands of a market that no longer prioritizes car ownership and is increasingly intolerant of the traditional dealership and car financing experience.

For solution providers, a certain amount of focus is required, Pickett said. Trying to be all things to all customers is an untenable strategy, he said. "If we had a business where we were going to be second choice, third choice, that's not going to help you grow," he said.

Pickett said Zones, which acquired the company he started, nfrastructure, in 2016, whittled its pipeline from $3 billion to about $1.75 billion, "but the quality of the pipeline, and ability to win" was greatly improved.

"If you can't be first choice, you're wasting your capital," Pickett said. "Where can we play and win? We got more defined and focused around the strategy. There has to be addressable market that warrants the investment. If we can't answer, 'Why Zones?' then we shouldn't be in the business. We do network infrastructure. If we can't answer why Zones over Verizon, ATT, WWT, then we shouldn't be in the business."

That focus allows Zones to align more tightly with the market and customer challenges, Pickett said. The company now counts Microsoft and other global heavyweights among its key customers. Zones now concentrates on workplace modernization, network optimization, and data center transformation while selling security across the whole stack.

With a tightened focus, Zones can make sure it is aligned closely with the needs of its customers, Pickett said. "Our vision for Zones isn't what matters," he said. "Your vision as a customer is what matters. We offer choices, and we bring in engineering, bring in folks who understand finance and billing, who understand cloud and consumption."

Zones has also found success allocating capital around its financial drivers, Pickett said. "Invest in one area, and it drives return in that area, as well as sister areas," he said Closer focus on key vendors, he said, will pay off in the attention those vendors show key solution providers.

"More focus on them will result in more focus on you," Pickett said. "Treat them like a customer in a way that they'll be incented to invest and drive your model.

Taken together, the strategy has been a huge success for Zones. Pickett said the company recently closed its largest deal ever, a $300 million, multiyear agreement.

Mike Mahanay, vice president and CMO of CTL, a Beaverton, Ore., solution provider, said Pickett's message is relevant and timely for solution providers keen to capitalize on customers' evolving needs. "We've been in business for 30 years," Mahanay said. "We're coming from that system builder background, so we can relate to a lot of what [Pickett] was talking about, especially getting salespeople to sell solutions rather than just hardware. We can see that same thing from our perspective. It was really interesting to hear about their transformation, and how they're approaching disruption in the industry and be a disrupter themselves."

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