As a former “box pusher” that has evolved into being a full-fledged solution provider, CDW (CDW) casts a long shadow across the channel. But when you look inside its financial results, it may surprise you that 70 percent of its business is generated out the Midwest region surrounding its headquarters in Vernon Hills, Illinois.

Michael Vizard

June 24, 2015

3 Min Read
CDW39s Technoliner bus which highlights the company39s technologies and its configuration prowess
CDW's Technoliner bus, which highlights the company's technologies and its configuration prowess.

As a former “box pusher” that has evolved into being a full-fledged solution provider, CDW (CDW) casts a long shadow across the channel. But when you look inside its financial results, it may surprise you that 70 percent of its business is generated out the Midwest region surrounding its headquarters in Vernon Hills, Illinois.

But CDW is committing to significantly expand the services it provides via the cloud, and dramatically increase its presence up and down the east and west coast, as well as any other city where there is a National Football League (NFL) franchise.

As is the case with most solution providers today, shifting business models tends to create a lot of financial volatility for organizations. For public companies such as CDW, that volatility tends to be a lot more visible on a much larger scale than for the average solution provider.

Despite those issues, CDW is pressing ahead with both an expansion of its marketing efforts and a plan to increase the scope of the managed services it provides via the cloud. To that end, the solution provider is in the process of building a $25 million enterprise command center (more commonly known as a network operations center, or NOC) in the former CDW retail space in Vernon Hills, said George Ganas, senior manager of operations for the managed services team at CDW.

CDW also plans to move its Business Technology Center into the space to create something of a showcase area for the services CDW provides, Ganas said. Those two facilities will become the hallmark attraction of the CDW Red Carpet Tours, which already result in a 34 percent increase in business on average from every customer that agrees to visit its facilities.

From within that NOC, CDW will be able to manage data center facilities in Vernon Hills; Madison, Wisconsin; Minneapolis; Milwaukee; and Las Vegas. Most of the IT services that CDW now provides were all built around the services business built by Berbee Information Networks Corp., which CDW acquired way back in 2006. Much like the rest of CDW’s business, 80 percent of the company’s services business emanates from the Midwest, said Ganas.

Late last year CDW also formed a partnership with Kelway, a solution provider in the United Kingdom, as part of an effort to begin extending its international reach.

As part of that effort to extend the scope and reach, CDW plans to increase its ad spending around major sporting events. It launched its first major television campaign during the 2015 Super Bowl and the Bowl Champion Series (BCS).

In addition, CDW is taking its story on the road. A CDW Technoliner bus now travels the country highlighting not only the IT equipment CDW resells, but also the configuration services it can provide. In fact, CDW claims that on average it handles some 5,000 custom system configurations a day.

As a reseller, CDW turns roughly $14.6 million in inventory every day. Accomplishing that requires a singular focus on operations that spans everything from how it take delivery of products to providing distributors such as Synnex physical space inside CDW warehouses. Right now, however, the CDW line card when it comes to cloud computing is limited to Microsoft Azure services. But it’s also pretty clear CDW plans to expand that cloud service line card in fairly rapid order as part of an effort to extend a services business that already generates $1.5 billion annually.

As with other solution providers, CDW is partially reinventing itself thanks to the rise of the cloud. Over time, there may be less physical IT equipment shipped to each enterprise IT customer. But CDW is clearly betting there will be more customers consuming its services. As such, the shadow CDW currently casts across the channel may become  that much larger.

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About the Author(s)

Michael Vizard

Michael Vizard is a seasoned IT journalist, with nearly 30 years of experience writing and editing about enterprise IT issues. He is a contributor to publications including Programmableweb, IT Business Edge, CIOinsight and UBM Tech. He formerly was editorial director for Ziff-Davis Enterprise, where he launched the company’s custom content division, and has also served as editor in chief for CRN and InfoWorld. He also has held editorial positions at PC Week, Computerworld and Digital Review.

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