Westcon revamps reseller relationship as CIO takes distribution to the CloudNewly appointed global CIO Adam Kuta sits down with Reseller News to discuss how the distribution game is changing and why Westcon is leading the way.
Just 40km north of midtown Manhattan sits the sleepy village of Tarrytown, unassuming in nature yet home to one of the biggest overhauls in distribution history.
In Westcon Group, headquartered on the eastern bank of New York’s Hudson River, change is fast-flowing through the company, merging into a collective approach to modern distributorship, from the boardroom to the basement.
Under the stewardship of CEO Dolph Westerbos, entering his second year in office, the global powerhouse in the world of value-added distribution has recognised that progress is impossible without change, it simply isn’t attainable.
Triggered by the executive recruitment of Adam Kuta as CIO, joining the company from fashion accessory leader Coach in December 2014, Westcon has plunged head-first into a new era, moving with the times and joining the party.
“We know what we have to do and we’re getting on and doing it,” says Kuta, speaking exclusively to Reseller News from Westcon’s New Zealand offices in Auckland.
A simple statement perhaps, but Kuta’s approach is anything but. Drawing on nearly 30 years of experience driving core technology initiatives, the towering global leader is well-versed in the art of change, championing worldwide IT roadmaps across a range of sectors.
Joining Westcon during a period of great flux, Kuta is widely acknowledged in the industry as a safe, yet innovative, pair of hands, capable of executing the company’s global strategy of enabling partners to more efficiently and effectively serve their customers.
“Absolutely, there is a lot of change going on at Westcon but it is very much positive change,” adds Kuta, visiting Westcon’s New Zealand and Australian divisions for the first time in his new role.
“When I look at what Dolph has assembled, he’s created the best of both the old and the new world.
“To be honest, before I came on board my initial fear was whether the company was willing and able to invest in everything that I wanted to achieve because I could already tell we were behind.
“I came into Westcon with a clear vision of the future and it’s great to know the board has backed me all the way, and continues to do so.”
Admittedly, the affable American walked into Westcon Towers under immediate pressure, as leaders ramped up the need to significantly invest in new technology and capabilities, a move which in the view of Kuta, was deferred for “way too long.”
Refreshingly honest in his assessment of previous failings, Kuta’s aggressive plans for 2015 and beyond will reshape Westcon’s entire distribution model, a model honed in New Zealand and soon to be launched in North America.
“We’re being very aggressive with our launch plans and are looking at July or August in North America this year,” says Kuta, referring to the Westcon’s revamped marketplace offering for reseller partners, known as Bluesky.
“The Verecloud acquisition has provided us with a head-start and my team is currently working on the marketplace and looking to implement at least the first phase of it within the coming months.
“As soon as North America is sorted we will be looking to New Zealand to continue the rollout, which could be towards the tail end of the year.”
As revealed by Reseller News in September last year, Kuta believes the benefits of Westcon’s recent acquisition of cloud and services solution provider Verecloud are now becoming clear, as the company ramps up its levels of channel innovation.
Echoing the comments of Westerbos at the time of the deal, Kuta is confident that ownership of a digital distribution platform now allows Westcon to provide differentiated, exclusive solutions to the channel without relying on third-party software development.
“Verecloud has helped us regain a lot of lost ground and we don’t want to lose it so it's onwards and upwards towards Cloud,” he adds.
“I certainly don’t feel we are behind and in the next 6-9 months the industry will be thinking, ‘wow, where did Westcon come from?’
“If you look at the platform our resellers are going to use, such as the website and the e-commerce platform, the Verecloud acquisition is very much going to provide the engine in the background.”
Adopting the SAP-owned Hybris e-commerce offering, Westcon aiming for a July / August implementation deadline across North America is designed to help support the cloud business and towards the latter part of the calendar year, to further support other aspects of the business also.
“This means resellers will have both digital and physical distribution on the same website which will be very compelling,” Kuta explains. “It’s a great platform for resellers from a store perspective.”
As the company “significantly revamps” how it engages with resellers electronically, Kuta acknowledges that while the business will still support how partners traditionally interact, through a very email and PDF intensive approach, the end goal is to make the Westcon website a compelling experience.
“And for it to be compelling you have to give them the right level of information,” Kuta adds. “But when I look at our current suite, in terms of our digital offering, if I’m a reseller there is no incentive to go there.
“So firstly, we want to make it easier for resellers to use and secondly, we want to provide the right level of information, which has stemmed from our realisation that we need to change and also from reseller feedback.”
Prior to taking the role, and looking from the outside in, Kuta examined the website and, quite literally, thought, “Oh My Goodness this is ten years old, we absolutely have to act.”
“The old website says to resellers, ‘I want something from you’ but we want to change that and give something back,” he adds. “At the end of the day it has to provide value-add and at present, there’s nothing in it for resellers.”
The purpose-built platform is designed to make cloud provisioning and billing easier for vendor and reseller partners, while giving customers the ability customers to purchase SaaS and IaaS offerings through a network of select resellers.
Resellers and their customers will be able to procure and manage their own services via the platform while end users will be able to manage and maintain their cloud licenses, view their cloud consumption and charges from within a single portal.
According to Kuta, the cloud platform also comes with white-labelling options, so resellers can affix their own brand to it when providing services to customers.
“We’re looking at our website as a positive experience for the reseller rather than simply seeking information,” reiterates Kuta, keen to stress the message that as a distributor, Westcon is giving something back to resellers.
“I mean when you think about it, how does Amazon get somebody to buy a cup of coffee for $5? Even in my office people will leave the building, jump in their car and drive to Starbucks to buy a coffee, passing closer coffee shops on the way.
“I don’t even drink coffee but the idea of that staggers me and it’s all because of an experience.”
The realisation for Westcon? The need to build a platform from an experience perspective.
“It’s a frontline thinking approach that centres around keeping the reseller engaged and wanting to use our website,” Kuta adds.
Citing Amazon as a “huge influence” in his view on retail and building an effective digital marketplace, the question posed to Kuta on a daily basis is a simple one; What can you do to make it easier for the reseller?
“If you look at Amazon, you can buy something, they send you an email, you click it and there’s your order,” he explains. “Amazon is a great example if you’re working in retail and we definitely want to be able to introduce this and make it work for our resellers.”
In examining the cloud space at present, Kuta is unwavering in his belief that it’s the “Wild Wild West out there.”
“Everybody is still trying to feel it and I believe it won’t be another year before things begin to settle down,” he predicts.
“We’re still in an incredible period of flux because if you’re a vendor you want to protect your cloud product and go at your own pace, and if every vendor is operating that way then the market isn’t going to move very fast.”
From a reseller perspective, Kuta believes partners are looking for a marketplace to operate within, a marketplace Westcon are currently cooking and about to bring to the table.
However, the idea of competitor products available next to one another on one website is a very different mindset to what has gone before because when it comes to the cloud, Kuta understands that customers might buy a little from one vendor and a little from the other.
“That’s where Westcon, as the distributor, can play a very key role in providing that marketplace,” he adds.
As a new breed of reseller emerges, and as Westcon seeks to become one of the standout cloud distributors in the world, Kuta believes the frontrunners are those who knew or started their cloud business and are adopting the subscription model, “they are there and they understand it.”
“They’re on board,” he adds. “Some will of course tail off and new resellers will enter the Westcon frame because the cloud is creating a new type of reseller.
“But we still have the more traditional reseller who will sell you a router or a service, and you may not see that reseller again for a long time whereas cloud resellers are developing long-term relationships.”
For partners operating in New Zealand, Australia and the wider world, Westcon’s message is that resellers of the past are not necessarily resellers of the future, with 60 percent of the company’s resellers failing to exist two years ago, instead born in the cloud.
From a revenue perspective that’s where education comes in, with Kuta adding that Westcon is already “actively talking” to resellers in terms of changing their mindset now they’re dealing with more volume but in time, the onus will then be on individual partners to excel.
“If you have a hundred customers that are subscribing, think about it. It’s not about the quick win it’s the long-term benefits and I believe Westcon, and distributorship in general have to keep educating and helping resellers make this move,” he explains.
“The marketplace will settle down in a year or two and things are going to change. What’s amazing is that even before I joined Westcon, during the past five years alone around 80 percent of my purchases have been in the cloud.
“Eventually everyone will say ‘oh its cloud’ and appreciate that there’s a marriage in there somewhere for everyone.”
Changing a mindset
But as the mindsets of the distributor and reseller change towards a more cloud-focused approach, personally, Kuta has also transitioned himself to the skies above.
Appreciating the “big shift” he made in moving from Coach to Westcon, Kuta recalls that in retail, “Coach is not going to make anything unless it’s a 65 point margin.”
Understandably, entering into a world where the margins are a lot thinner is a different ballgame entirely for Kuta, but six months into the role, and with a bag full of enthusiasm still at his disposal, there’s genuine excitement in the air as change becomes reality.
“Coming from the retail industry, and operating at a CIO level, the sector is of course hugely different to distribution,” he adds.
“If you look at it from an operational perspective, when you’re dealing with a retailer and you’re talking to a Product Manager, they get it, because they do it all the time. But in distribution it’s fair to say that’s a new education.
“Which is where I come in, it’s about using the Westcon website to advertise properly and cross sell which is a relatively new concept for the industry. But we’re injecting this mindset into the Westcon lexicon and it’s working.”
Following his appointment, alongside Steve Garrou as Executive Vice President, Strategy and Solutions Development, Kuta brought staff along from the retail industry, providing invaluable insight into how Westcon can best innovate across its channel.
“Every retailer you speak to, the first things they build is a platform that allows you to buy X, Y and Z, and that’s what we’re bringing to Westcon,” Kuta adds.
“In the distribution industry as a whole however, key industry players, including Westcon, can sometimes be guilty of being set in their ways in terms of thinking. For years distribution has believed that it isn’t sexy whereas retail just sells itself.”
Impassioned by the subject and forward-thinking in his vision for a better, more innovative Westcon, Kuta questioned why distribution is so willing to accept it’s merely back-end and warehouse management?
“Yes of course we have to do all of those things, and do them incredibly well, but why can’t we impose a positive experience for our resellers?” he adds. “That’s why we are introducing some of the main concepts of retail, not all of retail, but the parts that will be extremely powerful for resellers.”
With 2015 already four months down, and Westcon’s cloud momentum gathering pace, Kuta understands that now is the time to act, without delay, to ensure the company leads the way in the world of distribution.
“Bluesky,” adds Kuta, his one word response indicative of Westcon’s priorities at present. “We need to get this implemented.
“It’s a big one for us. We’re going to show our hand to the rest of the world soon so we need to make sure it is the best it can be.”
Landing the Bluesky marketplace will change the industry, and when the time comes for a distribution showdown, Kuta, as he exposes his hand, is confident of revealing a Cloud Flush.