WWT CEO On 'Strong' Cisco Partnership, Dell-EMC, And How Smaller Solution Providers Should Evolve
Kavanaugh On The Record
One of Cisco's top solution providers, World Wide Technology understands where the market is going and how the channel needs to invest its resources. With 26 years under his belt building a $7.4 billion solution provider, WWT CEO Jim Kavanaugh talks to CRN about the company's relationship with Cisco, hopes for Dell-EMC, and the key investments enabling WWT to grow its bottom line by more than 15 percent on an annual basis.
Kavanaugh, whose St. Louis-based company is ranked No. 12 on the 2016 CRN Solution Provider 500, also weighs in on the importance of being privately held and investments around ramping up WWT's application development capabilities.
WWT is Cisco's largest revenue provider in the U.S. Can you give us an in-depth look at your relationship with Cisco?
We have hundreds and thousands of resources that are focused on Cisco and we are deeply emerged in Cisco from an executive standpoint. I know [Cisco CEO] Chuck [Robbins] very, very well – I consider him a good friend and a great leader.
Our engineering teams are immersed with Cisco, not just on products, but working on different things – products that are in beta that are not even out to the market yet that we are collaborating on with them and providing them insight about things we see that customers would want in a product that they're not thinking of, or finding bugs before rolling things out. We have a very strong relationship with Cisco up and down the food chain.
That being said, for us, what is also happening with WWT is we have a number of other very, very important partners – large and small.
Who are these other partners and how fast is your vendor ecosystem growing in 2016?
Our ecosystem of partners and products is growing significantly and this has been by design. We're going to continue to invest an incredible amount around Cisco … but over the last five years, we've brought on a whole cast of ecosystem partners that are growing at a very rapid rate. EMC is one that has grown.
How big are your EMC sales?
We were more of an opportunistic partner with EMC seven or eight years ago and today, we'll probably be $600 [million] to $700 million with EMC and growing at a rapid rate.
Do you think that will change when Dell acquires EMC?
With the acquisition of Dell and the focus that [Dell CEO] Michael Dell is putting on the integration of the two organizations and things that we're doing collaboratively with them and investments on the sales and the engineering side of it, I think that's a huge growth area for us.
Why are you rapidly expanding your ecosystem of vendor partnerships?
We are truly moving into that trusted adviser position for our customers. Customers are coming in and asking us for a level of independent opinion on different products, different solutions and how they work in their specific environment and we help them use our labs to test out and vet those solutions. That's how customers want to buy in today's market.
What are some of your key investments that have paid off that made WWT into a $7.4 billion company?
The most significant investment is the number of people we're hiring. We've hired over 2,200 people in the last three years, and we're continuing on a very high-pace hiring rate as we go into next year.
Another investment was creating a culture and a facility of innovation. There's a mind-set that needs to be created within the organization, but the physical investment in our Advanced Technology Centers and all of our integration labs associated with that ... and all of the training is crucial.
Third, we spent a lot of time, money and effort, building out these [facilities] from a quality perspective and scaling perspective. We have Integration Technology Centers that are both here in the U.S. in St. Louis and another in Amsterdam and Singapore. Those allow us to support a lot of our customers around the world. … We're putting a lot more time, money and effort growing our sales force in Europe, specifically in London and looking at expanding in Amsterdam and other areas of Europe and Singapore for support in Asia.
WWT spent a lot of time and money building a software portal for engineers. Can you describe the benefits of this software?
Our software portal and platform allows any of our engineers and our customers' engineers – anytime, anyplace – to get into the sandbox environment and these demo environments and these proof-of-concept environments that allow us to scale out -- whether they're in Singapore, New York, St. Louis, San Francisco, London. This ecosystem has been created not just to demonstrate products for customers, but to train and develop our engineers -- and train them across different products and against different platforms. So our network engineers are more proficient on virtualization, converged infrastructure, hyper-converged, [etc].
It's a platform that everything runs through that's the access point for all of our sales and engineering organizations.
How does WWT better sell to the line of business in 2016?
IT and the line of business are really converging and blurring.
[Businesses] are being challenged to move faster and faster, and the way you're going to do that is to be able to evaluate and assess different technologies that are coming at you. How do you do that faster? Through app dev and true management consultants [to] build those platforms and layer software, whether it's a mobile app or [Internet of Things] app on top of that platform to deliver a business outcome for that customer. Those are the things we're uniquely doing -- helping connect the dots for the VPs and the CIOs and the IT space.
Who are you selling to today in the line of business?
Companies are involving both senior people from the IT side and senior people -- all the way up to Fortune 500 companies – where their presidents are in the meeting or executive VPs because this is more of a collaborative go-to-market for these customers than just IT on one side and the business on the other.
How are you enabling WWT's engineers to change in this new environment?
We've cross-pollinated our traditional hardware engineers across multiple products and platforms and we're cross-pollinating our software engineers across those products. It's a unique environment, but it also provides a very unique capability to our customers.
How important is application development for WWT?
Extremely important. [Our] acquisition of Asynchrony was a very significant and strategic investment we made there. I don't believe anyone else in our space from a VAR, traditional systems integrators [perspective] is doing what we're doing from an app dev perspective. From that [acquisition] we have an app dev group – about 240 people from Asynchrony plus another 140 people – so we're close to 400 people just in our app dev group and we're hiring at a very fast clip. I don't see any slowdown for us in that space.
What is your advice for solution providers with annual revenue between $100 million and $400 million?
When you're smaller you have to be careful that you don't try to be all things to all people. It's very important through the evolution of their business as they grow to not take on more than what they should. Pick what you are good at and get very, very good at that. As you continue to grow, if there's an adjacent area that makes sense that is complementary to what you're doing, then look at expanding your total addressable market by going into those areas.
What should solution providers be mindful of when looking at expansion?
Be very careful to not try and take on the world before you've mastered specific things. That's where people get into financial trouble and they create a level of confusion within their organization by trying to do too many things and they confuse their people on a sales and delivery perspective that can be very counterproductive to different organizations.
What are your thoughts on solution providers going public?
If you look at the last 15 to 20 years, our focus has been to double our top line and double our bottom line every five years. Fortunately, we're privately held. We're not a slave to the quarterly number and we can look at things a little bit longer term and, hopefully, it allows you to make more intelligent, strategic decisions and investments that don't force you to try do unnatural acts just to hit a quarterly number. It's much more challenging to run those public companies.
You co-founded WWT in 1990. What has been your biggest achievement?
Our culture is so important to me. It's something I and our executive management team spend an incredible amount of time on. We believe in our culture and treating our employees right and investing in our employees.
Whether it's somebody who's receiving products the warehouse or it's a senior executive, we expect everybody to treat each other in the same way with the same level of respect. But don't be confused -- we're a very hard-charging organization. We're pushing every day aggressively, but you can do that in the right way.