Exclusive: Westcon CEO Says Company Shifts And Investments Are Paying Off

It's been approximately seven months since Dolph Westerbos took the CEO role at Tarrytown, N.Y.-based distributor Westcon Group, and the company has been making key investments and seeing significant success since. In an exclusive interview with CRN, Westerbos sat down with CRN to discuss the company's state of affairs and where it is making investments for the future.

While the distributor has a solid foundation, he said that Westcon has been making some key changes to make itself even more competitive, based on feedback from reseller and vendor partners.

Those changes started with cutting back on complexity. Westerbos said that he has cut the leadership team back to 11 leaders, which helps the distributor make quicker, more nimble decisions, as well as the number of vendor brands it supports. While it does add a bit to the complexity, Westerbos said the distributor is also expanding globally and standardizing across approximately 70 countries as well as making key acquisitions, such as the Intact Integrated Services acquisition in April.

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What distinguishes Westcon from its competition is its global footprint, its people and its deep specialization in what it sees are key solution areas, Westerbos said.

"In many ways, all distributors form important functions and there is a core of functions that is very transferrable between our competitors, and everybody is looking for what makes you unique," Westerbos said. "What I love about Westcon and was surprised by, we go deeper I think than our competitors ... We're not trying to be everything to everyone. Where we're specializing, we like to go really deep, really understand both our customer issues and our vendor issues and build enough technical expertise but also industry and market expertise. I think that depth of relationship and that depth of technical expertise is key."

The five key areas that Westcon dives into are security, unified communications and collaboration, data center, services and cloud. As a result of their specialization, those business groups are all on the rise. In particular, he said that security is a big driver for growth.

"Security is on steroids. As technology solutions are becoming more complex, as the end users tie into enterprise environments, as cloud is a hybrid of private and public, all that drives an increased need for security. That is the space that we excel in. We have a strong portfolio of solutions. That part of our business is very strong," Westerbos said.

Unified communications and collaboration has been a fairly steady business over the past few years, but the growth in that area is starting to ramp up, he said, especially around the Microsoft Lync ecosystem and other new solutions. Data center solutions continue to grow, as well, he said.

As Westcon expands its resources globally, Westerbos said that the company's global deployment solutions business has been growing faster than the more traditional pieces of the business. That part of the business provides solutions and services to help customers expand globally. Westerbos said the growth is being driven, in part, by cloud and managed services, which extend across country borders much more easily than physical assets.

Westerbos said that the distributor is seeing growth in its services business, and is investing heavily in that area going forward. The global services practice was just created earlier this year, but Westerbos said he spearheaded an initiative to make it a separate division and is building a global business around services. The investment is in two parts. First, he said that Westcon has key services successes in individual regions and is working to globalize those areas. Second, he said that Westcon is investing in key capabilities areas. For example, he said that the Intact acquisition, which officially closed last month, added 120 engineers to the company's repertoire to help with solution design and having more "feet on the street."

"Intact has been a really great acquisition for us. You'll see us make more of those kind of investments in the the future, finding additional capabilities to in-source to the company," Westerbos said.

Finally, the distributor is investing heavily in its cloud business going forward, Westerbos said, particularly around developing a clear strategy and vision. While Westerbos said that "no one has figured out go-to-market in the cloud," when it comes to distribution just yet, he said that Westcon is laying its stake in the ground as a leader in helping clients and vendors make the transition.

"I think we need to lead this. We're making very serious investments, and I think Westcon has a responsibility to play here to help the traditional vendors and resellers transition to cloud," Westerbos said.

NEXT: Why Westcon Won't Become A Cloud Company Itself

However, Westerbos said that resellers shouldn't expect Westcon to become a cloud provider itself, unlike some other distributors. He said he would leave that up to vendors and solution providers who are already good at that piece, and Westcon will stick to the supply chain side that Westerbos said he knows they can excel at. In addition, he said that he wouldn’t want to put in place a model that directly competes with vendor and reseller solutions.

"That’s not in our DNA," Westerbos said. "We are, and I think the reason we have been so successful as a company, is that we provide a very compelling go-to-market for our vendors and a very compelling supply chain solution for our resellers. That's our core ... I am a big believer in you figure out what works well in a company and you add new opportunities to it. Second, it's precisely our vendors and our customers who have become very good at building those services solutions. We don’t want to be in competition with our partners. We want to help our partners, rather than create issues of conflict or trust."

What it ultimately comes down to is what Westerbos sees as the future model of distribution: helping resellers sift through the noise when it comes to new technologies and vendors and act as a one-stop-shop for trusted solutions.

For example, the company recently brought on F5 Networks, as well as expanded its relationship with Palo Alto Networks. Both of those moves show Westcon expanding its reach and depth with what it perceives are innovative and key vendors for its resellers. The distributor is very selective, he said, with only 15 global vendors. However, it has seen huge success with this model, Westerbos said, with more than half of those vendors showing "very significant double digit growth" with the distributor.

"That's a big responsibility," he said. "To increase the relevance for our customers in that new world. I think that really is the success for distribution."

PUBLISHED AUG. 27, 2014