Access Q&A: Sales Split, Sun Changes, Acquisition Rumors

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CRN: When did you start looking at separating the mature and emerging technologies into separate divisions?

McDermott: We started last year. I pulled a number of key insights from the book "Good to Great: Why Some Companies Make the Leap. . . And Others Don't" [by Jim Collins]. It's really about defining your focus. It talks about what to focus on, and what to do best. And to strive for competencies.

Access has always had that focus. But as we look at the supply chain, look at Gartner reports about how vendors want to do more direct, we saw the importance of being prepared to move our services to where we can do more value.

We've seen a change in the value proposition of distributors, and have started to focus on it. We've restructured our teams and strategies against the new Sun programs and succeeded.

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CRN: Why the focus on emerging technologies?

McDermott: We saw that the emerging market is a completely underserved market. Distributors can help to provide the platforms to help [emerging] vendors get into the channel.

CRN: So what is unique about Access' approach?

McDermott: We consider our vendors as much our customers as [we do] our VARs. We have two organizations in Access, one to meet the needs of VARs, and one to meet the needs of vendors. We go as deep into our vendors' relationships as we do with our VARs. We want to maximize the vendor relationships, not only for us but for our VARs.

CRN: What does that have to do with emerging technology vendors?

McDermott: Most emerging vendors, when they go through distribution, are going through smaller regional or value-added distributors. That's not to say they aren't in bigger distributors. But most big distributors don't have the time to work with them. But the VADs are successful with them. So we feel, why not us?

CRN: How has Sun's move to cut marketing funds through distribution impacted Access?

McDermott: The difference is how we get paid. Before, Sun funds were mainly fixed rebates, and a little part was variable incentives. Now, it's mainly incentives, with smaller fixed rebates. Last year, we said we saw it coming and that we would have to change how we do business. We changed our structures, our compensation programs, so we didn't lose. Actually, we're doing better. Give a good salesperson a comp plan, and they will work with it.

CRN: Some channel partners are saying that Access' value as a Sun distributor dropped when Sun signed Avnet to be a distributor of its StorageTek storage products and much of Sun's server line. Do you think that is the case?

McDermott: I don't think so. We have 16 years of experience in this business. Sun made its decision to focus on non-platform business with Avnet. Sun felt they needed Avnet to help with the non-platform business. I don't believe it will. I don't believe everything Sun says.

CRN: Rumors are always circulating that Access could be an acquisition target. What's happening?

McDermott: Access has been a part of GE (General Electric) for nine years. We've been for sale from the day they bought us, in rumors and in reality. GE acquired about 100 companies in the last 12 months. They're always buying and selling.

CRN: What can we expect from Access going forward?

McDermott: You'll see a couple of things. We'll be offering new markets to our VARs. They ask us, what are the newest products, the newest markets? Their customers are asking them the same thing. Voice-over-IP, biometrics—these are all ways for them to add solutions. They let [VARs] focus not just on infrastructures, but on the complete solution.

On the mature side, we're making a big investment in IT tools that will launch later this year to improve our processes.

We've also redesigned some of our internal processes. Our technical sales operators used to do everything from orders to support. So we created a new Center of Excellence to manage the ordering process from taking the order to logistics. For the technical sales operators, we will deepen their technical training in order to better support customers. The mechanics—the order processing—will move to the Center of Excellence. This is already happening, and the process will continue over the next couple of months.