WestconGroup: From Garage Guys To Global Distribution Powerhouse

A Long Way In Three Decades

This month WestconGroup of Tarrytown, N.Y., celebrates the growth and success it has seen after 30 years in business.

During that time, the company has grown from a small operation started by three guys in a garage to a global distributor with boots on the ground in nearly 70 countries across the world.

How did the company sustain its momentum in such a tumultuous period? WestconGroup CEO Dolph Westerbos (pictured) said that over the past three decades, WestconGroup has kept "a true entrepreneurial spirit" that has moved it through many changes, constantly keeping its eyes on tomorrow.

That entrepreneurial spirit is what allows WestconGroup to continue to grow, change and flourish in an unpredictable, ever-shifting business landscape, Westerbos said in an exclusive interview with CRN.

Here, we take a look back at some mileposts in that evolution, as told by Westerbos.

'Skin In The Game'

In 1985, WestconGroup was formed as Westcon Associates. The founders, Thomas Dolan, Philip Raffiani and Roman Michalowski, began the company in a two-car garage 20 miles outside of New York. The three founders mortgaged their homes to get their first $1 million in Ethernet products, which they sold the old-fashioned way -- over the phone.

Westerbos said the founders of WestconGroup "really put skin in the game" to buy that first batch of Ethernet products. He called the men pioneers who created a channel business model for early OEMs.

Dolan still sits on the WestconGroup board and continues to direct the future of the company. "It is wonderful to have that continuity," Westerbos said.

Training And Support

WestconGroup focused on providing both education and support for its customers, differentiating itself in the market by providing technical support, training, marketing and financing assistance.

One of the first authorized Novell training centers, WestconGroup continues to focus on education and support.

According to Westerbos, the company has intentionally kept a small set of global vendors in order to provide more in-depth support for its offerings. "We have that very-focused approach," he said. "We have only 15 global vendor partners, and those 15 make up about 90 percent of our revenue."

Jumping Into Routers

In the mid-1990s, WestconGroup made one of the first large evolutions in its history when it decided to invest in routers. Up until that point, the company had focused on the Ethernet market, seeing early the potential that Ethernet had over coaxial cable.

But as telephone services became deregulated, the potential that routers had for providing high-speed connections more effectively became a paramount investment for WestconGroup. The company went all-in with its investment in routers -- an investment that paid off handsomely and grew the company.

Datatec: Being Bought To Grow

In 1998, WestconGroup executives decided that in order to continue to grow the company, they would need to put it up for sale. In June, the company was acquired by Datatec, a South African international networking and distribution company. Datatec acquired a 92.5 percent interest of WestconGroup for about $160 million, and under the name WestconGroup, Datatec consolidated its Value-Added Distributor businesses, launching WestconGroup into the European market and moving the company's headquarters to Tarrytown, N.Y.

An International Player

The Datatec acquisition allowed WestconGroup to expedite its plans for becoming a global player. Since its start, WestconGroup had its eyes on becoming international and by 1998 had already expanded into Canada and Australia as well as the West Coast of the U.S. The acquisition gained the company access to the European market and gave it the capital to begin making acquisitions of its own, expanding offerings, locations and influence.

Today, WestconGroup has expanded throughout Europe, the Asian Pacific market, South America and Africa. The company now has a presence in nearly 70 nations worldwide.

In 2011, F5 Networks selected WestconGroup as its first global distributor. Since then, Palo Alto Networks has been among the vendors to sign on with the distributor. "They always wanted to make this not only a regional, but a global company," Westerbos said of the founders' vision. "So expansion was always part of the strategy."

Comstor.net: A Big Change

In August 1999, WestconGroup bought Comstor.net from General Electric and began to distribute Cisco products in volume -- a move that transformed its focus. Cisco products now account for 40 percent of WestconGroup's business.

"It is a huge part of our company," Westerbos said. "Cisco is a very important relationship."

After acquiring Comstor.net, WestconGroup became a distributor of what was then the largest four networking vendors: Cisco, Nortel, Lucent Technologies and 3Com Corp.

Avaya And Beyond

In 2001, WestconGroup continued to look toward the horizon of the networking industry. IP-based telephony and data technologies had begun to converge, and WestconGroup looked to capitalize on the trend.

The company began distributing Avaya products after acquiring Omaha, Neb.-based Inacom Communications Inc. and Pittsburgh, Pa.-based CCA Technologies Inc. Following the acquisitions, WestconGroup established its Voda One division in the U.S.

Security Investments

In 2007, after a few years of growth in its security practice, WestconGroup made significant investments to help build its expanding security offerings with a series of acquisitions. The company acquired the U.K.-based security distributor NOXS and Minneapolis-based developer Netex, and entered into a joint venture with Index Group, an Istanbul-based distributor. WestonGroup also acquired Cernet of America Inc. and its related Mexican companyin order to support the company's Cisco and Nortel networking and security solutions in Central and Latin America.

"From the early 2000s, we started to grow our security, and I think over the last 10years, we have become, the security distributor globally," said Westerbos. He added that after adding Check Point and "all the other relevant and leading security businesses" to its offerings, WestconGroup's security practice is now the largest practice in the company.

Toward The Cloud

In 2014, Westcon Group continued to adapt to the morphing IT business landscape as it moved toward the cloud through its acquisition of Verecloud. The acquisition was made in order to build WestconGroup's foundation for cloud distribution via its cloud aggregation and brokerage platform. The company started a pilot program with Veracloud's solution, called Bluesky, in New Zealand last year. The platform saw early success and will launch in the U.S. in the near future, according to Westerbos.

Billions In Revenue

After 30 years in business, WestconGroup has gone from the brainchild of three guys in a garage to a global distributor with more than 4,000 employees across the globe. The company is now making $6.1 billion in revenue and grew by 20 percent organically just last year.

"We are more entrepreneurial than most in the industry," he said. "A lot of acquisitions have taken place [over the years], which has added new technologies, new vendor relations, new geographies for us and new talent. But, what it has always done, is strengthened that entrepreneurial DNA, by bringing in new entrepreneurial people."

The culture in WestconGroup is one of "a can-do attitude," he said, full of people who work to make their customers succeed -- many of whom have been with the company more than a decade. "There aren’t many technology companies that have people that are so loyal," he said. "Really, I am deeply proud and privileged to be able to work here and help drive the strategy going forward.

"We have come a far way in 30 years and we are very excited about the future," he said.