CRN Interview: Black Box CEO On Structural Changes And Why IoT Is A Main Priority

Trammell On The Record

Black Box CEO Joel Trammell has been on the job for eight months. He said his priority in that time has been to differentiate the three businesses that make up the company. The Lawrence, Pa.-based solution provider has split with two CEOs since August 2016. Trammell is the third chief executive and is fighting to change the company's fortunes for the better.

A regulatory filing on July 2 warned that creditors have given the company a deadline to find a buyer for its federal services business. If the deadline passes without a sale, the company may resort to filing for bankruptcy -- although Trammell insists that is not a realistic consideration. He said the company has "multiple bidders" and he is confident a sale will happen on time.

That news caused the company's stock to tank to below a dollar, its lowest value ever. Then on July 6, the company announced it had signed a deal with "a social media giant" to build out a million square-foot space in Ohio, work that could continue for 10 years, with an upside of $300 million. Shares rebounded to a share price north of $2.

In an interview with CRN, Trammell talked about his priorities in the first few months in the corner office and where Black Box is strong moving forward.

What should people know about Black Box?

You should think of Black Box as three separate entities. The federal business, really is totally separate from the commercial services, and international services, and then that is separate from the original business which was a products business, catalog products business, which CRN readers are probably most familiar with, which dates back about 40 years or more.

What have been your priorities in the first few months since taking over as CEO?

When you take over as CEO, the first thing you have to do is figure out where you're going. I've been very clear. I think the company in the past has not done a good job of clearly speaking to the market about the three independent businesses.

How have you approached solving that?

Simple things, like we had a single website where we try to show a federal services business, a commercial services business, and a product business, which is not very easy to do right? It tended to confuse people. So one of the first things that I did was just split, and said 'OK we're going to have a products business, under blackbox.com. We're going to have a services business under blackboxnetworkservices.' So just splitting that up so that customers understand, if you're looking for services look here, if you're looking for products look here. So getting the vision a little more clearly refined.

What other changes can you talk about?

We're restructuring our commercial services group around customer segmentations so that we can better service customers in the way they expect to buy. We service 9,000 customers in that business. Very, very large customers. Fortune 50 types and then some mom-and-pop type of businesses on the other end, where we do infrastructure or wiring for maybe a small facility or something, and we weren't well segmented along those customer segments. That's the first thing we addressed.

What came next?

The second thing is getting the right team in place. Fortunately, I inherited a pretty good team so we haven't had to make a lot of changes at the executive level. I think we've got a very strong team in place.

Then obviously spending time with the banks. They told us all along that we were going to restructure and we were going to get this done, but no one ever gets one of these deals done until the last minute. So that's why it kind of dragged on longer than I would have liked but we finally got it complete.

What are some of Black Box's strengths?

Our key capability, and it goes back to our history of having done a number of acquisitions around the country, We're one of the few companies that has the ability to put people with IT networking knowledge pretty much anywhere in the country. So doing large scale roll outs, you know when you're a retailer and you have 1,000 locations around the country, and you're a bank and you have all these retail locations, that's really where our core capability is. I think that hasn't been well marketed in the past. We're certainly exploiting that. That's a huge opportunity for us. There just aren't too many companies who can do it any more on a national and even international basis like we can.

Where is Black Box well positioned going forward?

It's Internet of Things … I know a lot of you are writing about that, somebody's got to do that. It's great to talk about this virtual world, but you have the access points. You have to have the routers. You have to have the switches. You have to have the infrastructure. 5G brings on a dramatic increase in the physical number of devices. That's one of the ways you get the increased bandwidth is by increasing the number of points. All of those things need somebody to physically install that device on the network.