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Playing to your strengths

Playing to your strengths

Westcon Group is confident its focus on core technologies such as collaboration, security, storage and networking will help it ride out the economic storm. General manager, Wendy O’Keeffe, caught up with ARN to discuss the state of the market and the distributor’s position in 2009.

Was there extra spending late last year because customers were fearful of price hikes?

We think there’s a lot of extra spending happening in certain areas, so for some of the vendors we’ve had forward ordering. I can understand that, because the [exchange rate] shift is 30 points. We believe the true value of the Australian dollar is $US0.72 and it’s starting to fall that way, so we’re hoping we’ll get some stability this year. It’s a daily task, but we’re fortunate as only 35 per cent of our vendors invoice us in US dollars. But it has an enormous impact on distributors – Tech Data in the US for instance, lost $US25 million in Q3 last year because of hedging.

The margins distributors work on are not that high, and if you lose 30 points, you’re cutting into everything. There’s a lot to be said for the way people run their treasury.

Westcon has been aggressively expanding in recent years, particularly across Asia. Are there plans to acquire and expand in Australia?

We are always open to acquisitions and have been looking at acquisitions for two years now. Unfortunately, we haven’t been able to close one, but certainly our goal is to be big, but niche in the areas we focus on. So our acquisition strategy is around storage, networking, video, or adjacent markets like scanning and automation.

If you look at the last 12 months, it’s been a rollercoaster, and there are a lot of organisations that don’t have the same market value as a year ago. It’s a difficult thing to swallow. We’ll continue to grow organically, and we’ve had fantastic organic growth, so we’ve been fortunate.

We really want to expand into New Zealand further as our business there has been doubling in size every year, and that will continue as we expand agencies in that market and bring on more global customers. And then as we become a territory through Asia, we’ll have more of a regional strategy, which will enhance our business. You’ve seen that through the joint venture with Inflow, [Westcon has a 51 per cent stake] which has a reach across 13 cities in India and in excess of 30 vendors, many of which are similar to the ones we engage with, but others which present new opportunities.

Has your strategy changed around staff recruitment in light of economic circumstances?

Not really. We are always very cautious with recruitment. What we tend to do when a role comes up and needs to be replaced is we debate internally on where that role is best used and based on our 13 priorities, ensure our people are aligned to those areas. Right now, we have eight open roles. We haven’t stopped recruiting, but we are certainly making sure it’s a justified role in the right place.


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