Staying on Top

Tech Data has been hurt by declining demand for technology, but it has used the past year to position itself for the economic recovery.

Bob Dutkowsky, 54, chief executive officer of Tech Data — the top company in this year's Gulf Coast 500— knows that each year, he has to somewhat reinvent the company, mine new growth, look for an edge against his competition.

Idling on past success, even for the largest company on the Gulf Coast, is a death sentence.

The past 12 months have seen Tech Data, a technology distributor, strategically diversifying its product offering so it can capitalize on emerging demand for new technologies. That hasn't been easy because technology spending has fallen at many companies.

Nonetheless, Tech Data has strengthened its solutions portfolio with new high-end data center technologies, wireless networking hardware, software applications and video surveillance products, as well as HD-TVs, GPS devices and netbooks.

Growth by acquisition and growth overseas has been a big part of Tech Data's work this year. It has made bought several companies in Europe, which further expanded its product portfolio and customer base.

The main challenge for Tech Data in the past year has been the falling demand for information technology products affected by the current economy. Tech Data has tried to counter that with its ability to diversify its product offering to align it with high-demand technologies.

“Tech Data has always been able to capitalize on the growth of the IT industry,” Dutkowsky says. “When IT spending in both the public and private sectors picks up, Tech Data is well positioned to benefit from that growth.”

The technology distribution industry is consolidating. And its likely Tech Data may be merging with more companies or taking on more functions. The current economy is forcing all elements of the IT business — vendors, distributors and resellers — to re-evaluate their businesses and practices. There are services that Tech Data can provide, such as logistics, marketing and demand generation, that help make its customers and partners more effective and efficient — and need more of its products.

“Consolidation is a natural byproduct of difficult economic times and the IT industry is in a period of consolidation,” Dutkowsky says. “This consolidation will create a more effective and efficient industry.”

The new opportunities for growth for Tech Data will be evaluating new product categories and other opportunities to expand its business in the United States and abroad.

Tech Data has been speaking with other companies about mergers in the past year. It has made several acquisitions in Europe during the past year, which further expanded its product portfolio and customer base. This month, it announced that its UK arm bought certain distribution business assets of Cadco, an Autodesk distributor.

Throughout these changes, Dutkowsky has kept the corporate strategy and corporate culture relatively unchanged and he doesn't seen it changing in the future.

The strategy is to continue focus on execution, diversification and innovation. Tech Data aims to out-execute the competition in every aspect of its business; diversifying product offerings, geographic reach and customer base; and improving its operations through innovative new tools and processes.

“Our strategy is helping us weather the current economy and position it for future growth,” Dutkowsky says.

Despite acquisitions, the economy has led Tech Data to trim its payroll. It now stands at about 8,000 employees worldwide vs. about 8,300 employees worldwide last year.

Dutkowsky's biggest CEO lesson in the past year is learning how to benefit from the falloff in demand for technology and position itself well for when the economy heats back up.

“We believe that great companies can get even stronger during difficult economic cycles,” he says. “We're working every day to make sure that Tech Data exits this down cycle as an even stronger competitor, and a more compelling partner, supplier and employer.”