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CDW CEO: On growing services, cloud applications and reshaping IT

CDW CEO Thomas Richards talks about how the services company can help customers with mobility issues and the BYOD challenge

By , Network World
September 04, 2012 12:14 PM ET
Thomas Richards

Network World - Chances are you're already doing business with CDW. After all, the Vernon Hills, Ill.-based provider of tech products and services boasts more than a quarter-million customers to whom it ships more than 2,200 custom-configured systems every day (from a portfolio of more than 100,000 partner products). But CEO Thomas Richards wants you to think of CDW for more than just those new servers or storage devices. Richards has led a strategic push that has CDW now helping IT shops build private clouds, reselling cloud applications from Microsoft and Salesforce.com, among others, and providing its own managed and cloud services with partners like Cisco. In this installment of the IDG Enterprise CEO Interview Series, Richards spoke with Chief Content Officer John Gallant about how CDW is expanding its strategic services offering, and how mobility and consumerization are expanding growth opportunities for the company. He also talked about the rollout of Windows 8 and the Surface tablet, and why CDW is in an ideal position to capitalize on the big changes reshaping IT.

Tom, help our readers understand the mission of CDW, as well as some of the key areas of focus for the company today.

Our mission is to be the leading IT solutions provider in the markets we have chosen to serve. We state it that way because we're not going to try to be all things to all people. There are certain markets where we think we have a great value prop for customers and create great value, and there are other markets that are not in our sweet spot. We've set what we believe is an ambitious goal. That was done a couple years ago as part of a strategy process shortly after I got to CDW. We built that as the mission and then went through a pretty rigorous process of looking at what we do well, what markets we serve and what parts of the IT marketplace had some openings or opportunities where CDW could expand our capabilities.

We think that we bring value to two important groups of people in the IT world. One is customers and the other is our partners. We represent over 1,000 partners and 100,000 products. We have a technical sales organization of over 600, we've got a service delivery organization of over 600, and we've got a selling organization that's close to 2,500. We believe we've got the right combination of skills, resources, access, scale and scope to help both of our parties. The value proposition for our partners is that we provide a very efficient and effective, value-building and brand-building route to market. For customers, we bring choice to the marketplace. We bring the benefit of size, scale and scope. And we have now expanded our solution set to include a pretty strong technical and a service organization to enable us to help customers in a number of different parts of the IT world.

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Your recent financial results are quite strong. What's driving your growth?

We're getting growth in a number of different areas. We continue to grow in several verticals, like healthcare and federal, which is one part of our core strategy. We have had continuous growth here for a couple of years. Another way we're growing the business is expanding the products, services and solutions we offer customers. Up until four or five years ago, you probably would have thought more about us just in the client end of the world. But we began to invest in resources, skills and capabilities in the data center. If you look at our last earnings call, you saw that network/communications was a high area of growth for us. Solutions areas like virtualization, areas like data center consolidation, all of those have become growth areas. Another recent investment area for us was expanding our service capability. In our last earnings announcement, that particular part of the business grew about 17%.

I want to drill down into some specific technology areas that are of significant interest to our audiences. Let's start with cloud, because I know you've had a number of announcements around that. As companies shift more functions over to cloud or service providers, is that a threat to CDW's business model?

It's actually an enhancement. Let's take the layup first, private cloud. We help people build out data centers, have helped people build out data centers, and so as they're building out a private cloud solution inside of their business, that is not too far afield from what we've been doing for the last four or five years. You're utilizing some of the technologies that facilitate a cloud-like solution, be it virtualization, just as one example, or shared assets. For us, private cloud is more of the same. If you look at areas of our business that are growing, they tend to be the kind of areas that people would invest in if they were expanding their private clouds.

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I want to drill down even a little bit deeper here. Let's talk specifically about what you offer and how you're helping people build private cloud, and then I want to talk about CDW as a cloud provider in and of itself. But let's talk about that set of capabilities around private cloud.

Let's say I started by trying to share resources in a data center. Now, I'm going to virtualize in greater economies and I'm going to think about how I build an infrastructure that permits me to share that resource with my constituents. We have technical people that can go in and help you think about it, share experiences where we've helped other people both design it and architect it. Think about all the issues that go with it, be it security, be it utilization, technical obsolescence and management. We have the people to actually sit with whomever it is in the IT organization to help craft the strategy and the required components. Let's say you're going to go with an integrated infrastructure and you're thinking about something like FlexPod or [VCE] Vblock or HP's Blade System, then we would help you procure it once we've helped you design it and then help you implement it.

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