Reaching the World

Reaching the World

400 Secrets by Dave Szymanski | Tampa Bay Editor

The Clearwater-based technology distributor Tech Data wants to expand into new markets around the world and handle more products, such as consumer electronics.

Despite its billion-dollar size, worldwide reach and 23-year track record, Robert Dutkowksy calls his publicly held Clearwater firm, Tech Data, "the stealth company."

"People don't understand what we do," Dutkowsky says. "We sell $22 billion in technology products every year in 100 counties." That performance has earned Tech Data the No. 1 spot on the Gulf Coast Business 400 list. The company also recently ranked 109 on the Fortune 500 list.

Tech Data has about 100,000 customers. It distributes technology products, such as computers from companies such as Hewlett Packard, IBM, Cisco and Microsoft to other businesses.

Despite posting big numbers, the entire technology market is much bigger. Businesses spend $1 trillion a year on technology. "So the opportunity for Tech Data to grow is huge," Dutkowsky says.

The growth strategy is twofold: Get into countries where Tech Data isn't now and handle different products.

It's in 100 countries now, but there's room to grow in Eastern Europe, Latin America and Asia Pacific. On the products side, it would like to explore distributing consumer electronics, security products, wireless technologies and software.

"The concept of diversifying ourselves is a tremendous opportunity," Dutkowsky says.

Tech Data has already made moves that way. In its infancy, Tech Data sold office supplies and floppy disks for computers. It eventually became a major computer distributor.

Earlier this year, it signed a joint venture with Bright Star, a Miami company, to distribute cellular telephones and smart phones. "There's a convergence between computers and cell phones," Dutkowsky says. "There's clear convergence toward that technology. That's the market we're targeting in Europe."

Tech Data has 8,000 people around the world. They help the company maintain good relationships with the companies it distributes products for, with transportation companies and with the end users, many of which are small niche companies, such as computer installers for law firms. They visit Tech Data headquarters and Tech Data executives are on the road visiting them.

Tech Data is a lot about movement. Trucks pull up to its 26 warehouses -several football fields long - at 4 a.m. each day. Employees then move the products onto shelves. At noon employees pull them off of shelves. And at 8 p.m. FedEx trucks pick up the products and they are delivered.

If a customer orders a product before 5 p.m., Tech Data gets it to him the next day. This happens with thousands of products every day around the world. Florida businesses get products from Tech Data from two warehouses, in Miami and outside of Atlanta.

"It's a very velocity and process-driven company," Dutkowsky says. "With all of our computing systems, and all the people, it would be very hard to duplicate what Tech Data does."

Another part of Tech Data's business is extending credit to the businesses that get the technology. Many of these are smaller, more boutique firms that need the products but may not be able to pay for it all at once. "We have several billion in credit extended," Dutkowksy says. "Little businesses have no cash and our vendors want us to take product to market. It adds another layer of complexity to the business."

One of Tech Data's competitors is Ingram Micro, a California-based distributor that is actually larger than Tech Data. "We focused more on Europe and they are highly focused on Asia," Dutkowsky says.

Based on Tech Data's experience, what advice would Dutkowsky give other GC400 companies? "Two things that differentiate a company are the ability to focus on markets and to execute with excellence," he says. "In the past 30 years, I've seen that the successful companies are the ones that are focused and pride themselves on execution."

REVIEW SUMMARY

Company: Tech Data Corp.

Industry: Clearwater-based technology distribution firm

Key: Get technology products from manufacturers to sellers around the world as quickly and efficiently as possible.