Down To the Wire: Graybar Helps Telecom VARs By Offering New Value-Added Service

As a result, Palmer tapped a company in St. Louis that he had worked with years earlier when he himself was a solution provider. The company, however, wasn't a systems integrator or VAR. It was Graybar, a $4 billion-a-year network- and telecommunications-equipment distributor.

Despite its size, Graybar, the fifth largest IT distributor in North America, doesn't have as large a footprint in the channel as smaller distribution houses such as D&H Distributing, GE Access and Synnex. Graybar specializes in physical-layer network and telecom equipment, which isn't exactly the most attractive or easily learned market in the industry. But lately the distributor has been hot on pursuing new VAR customers by promoting its value-added services to the channel, according to Rob Bezjak, vice president of market development at Graybar.

"I think it's crucial today for distributors to add value themselves," Bezjak says. "We focus on areas that VARs sometimes aren't good at, such as materials management or project management and staged installations for large deployments."

The strategy works, according to Robert Bray, president of Telecom Services Installation (TSI), a network-solution provider based in St. Louis that has worked with the Francis Howell School District. "A box of cable is a box of cable. The value-added services and support is what really matters to us," Bray says. "Graybar puts a lot of expertise and knowledge behind its products."

Palmer, for one, took advantage of the distributor's extended support services for the hefty school-district project, which included $1.5 million of network equipment. Graybar's engineers visited the school sites with Palmer and identified faulty infrastructure as well as potential low-cost alternative solutions. "We needed support and expertise quickly, not just product shipments," Palmer says.

Is Graybar cutting into the channel's territory by offering services to end-user customers like the Francis Howell School District? Not quite: Palmer's office hired a number of solution providers for the installation and integration phases of the project, including TSI. But for the initial planning and deployment, Palmer leveraged Graybar's technical experience and product knowledge to get started in the right direction. For example, based on the advice of Graybar's engineers, the school district is deploying Voice-over-IP solutions that Palmer estimates will save the district $350,000 on cabling and other physical-layer costs.

TSI itself leaned on Graybar for a major project last year when the network integrator was charged with helping the Renaissance Grand Hotel in downtown St. Louis renovate and upgrade its entire network and telecom infrastructure. With Graybar's assistance, TSI installed fiber for broadband access and data services throughout all 24 floors of the hotel and convention center and also deployed audio/video and security systems.

"It was one of the more challenging projects we've had, and Graybar's support made the process a lot smoother," Bray says. "Graybar came out and groomed our purchasing and salespeople to find out what we ordered, and they could anticipate our needs. They were more of a partner than just a distributor."

Bezjak says Graybar is seeing signs of improvement in the network- and telecom-equipment space. "There hasn't been a ton of new products in the physical network layer over the last few years, but we're seeing it pick up," he says. "And the VAR community has been a lot more receptive to new technology and solutions lately, which is great for us."

Graybar knows that it will have to walk a fine line with its value-added services to avoid competing with VARs. Being the dominant physical-layer network-equipment provider in North America, the distributor is confident that it can win more business with solution providers due to its support services and strong presence in the government and education markets.

"Other distributors looked at getting into physical-layer networking, but they've backed away from that over the past year or two," Bezjak says. "There has been a lot of customer migration in the distribution market lately, and we think we can get a lot of those VARs."

Fast Facts

• Graybar was founded in 1869 by Elisha Gray and Enos Barton as Western Electric Co., which spun off its distribution business in 1925 as Graybar.
• Graybar's 2002 wholesale revenue was $3.974 billion, ranking No. 5 on the 2003 VARBusiness Distribution 25 list.
• The company is privately held.
• Graybar's top vendors are Avaya, 3Com, Corning Cable Systems and Belden.