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C2000 keen to "kill" off broadline tag

Microscope contributor

Computer 2000 has challenged vendors to overcome lasting perceptions of the distributor as an IT supermarket when it comes to higher value technologies that require a specialist touch.

The distributor today told attendees at its annual Vendor Summit that specialist business units accounted for 10% of turnover in fiscal 2002 but was now closer to 47%.

"We do still get termed at times as a generalist distributor but that is something I want to kill today," said C2000 boss Andy Gass.

"We've not done a good enough job of explaining ourselves to the market in terms of the breadth of business we are doing, the different models we are running and the number of areas we touch," he added.

C2000 urged vendors to "challenge your preconceptions" and pointed out it had already made the transition into different tech areas including the data centre, enterprise software and storage.

Gass said the 'collection of specialists' strategy helped to treble profits in the last four fiscal years.

The importance of shaking off its broadline heritage is manifested in the $5bn (£3.1bn) market capitalisation of enterprise VAD rival Avnet and the $4.73bn of Arrow - both more than twice that of C2000 parent Tech Data, which stands at $2.31bn.

Segmentation in the last financial year revealed that the Core IT volume business represented 53.5% of C2000 sales, Azlan was 24.7%, Brightstar was 14.9% with Maverick and Datech 4.1% and 2.8% respectively.

However, Gass was not shy in highlighting its broadline credentials; stocking 100 vendors; trading with 10,000 of the 14,500 resellers in the UK and transacting 75% of its business online.

At the event in London today, C2000 also lifted the covers off a consumer electronics (CE) division, specialising in TVs, sound systems and small domestic appliances.

It already turns some £70m of CE kit each year based on its deal with Phillips and other IT consumer brands but wanted to formalise its go-to-market model.

"In terms of strategic intent, I think an IT distributor not having a consumer strategy was a wrong thing," said Gass, "our top five to six vendors [have portfolios ranging] from consumer to enterprise."

Combining specialist with volume distribution potentially gives C2000 an edge over VAD rivals, said Alastair Edwards, principal analyst at Canalys.

"The volume business gives C2000 the working capital strength on which to build a value business," he told MicroScope.

However, he was not convinced that now is the right time to enter the CE market more concertedly "when the consumer market is one of the weakest segments in the industry," said Edwards.

Related Topics: Desktop PCs, VIEW ALL TOPICS

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