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Dicker Data sounds warning for larger disties

02 Apr 2014

Express Data will continue to operate 'as if still part of Dimension Data' for the next couple of weeks, while its new owners decide exactly how the Kiwi business should be run.

David Dicker, Dicker Data chief executive and chairman, says a decision on the running of the local operations will be made following a visit to New Zealand by Dicker, during which he will meet with the local Express Data team.

Dicker Data's acquisition of the Australian and New Zealand operations of Express Data, along with Express Online, was finalised yesterday.

Speaking to The Channel following the confirmation – after signing all the paperwork that goes with finalising a $65.5 million purchase – Dicker said he has a strong perference for the New Zealand operations to run as 'a completely standalone business', rather than as a branch of the Australian operations.

“I know what I want to do. But we need to have a much more detailed discussion first,” Dicker says.

When asked about possible redundancies, Dicker says: “We have got a strategy to put to them [the New Zealand team] to avoid that. It's something we don't really want to do if we can avoid it.

“We have metrics that we work by, but we try to be flexible, it's not all about numbers and we don't want to rush in and fire guys.”

Dicker, who has had a house in New Zealand for many years and spends 'a lot of time' here, says he has a reasonanble understanding of the New Zealand culture and understands that New Zealand 'is not Australia'.

Vendor deals

The company has yet to finalise distribution deals for New Zealand, but Dicker says he'd like to have all of Dicker Data and Express Data Australia's major vendors being handled in New Zealand by the company.

“But we're at the grace of vendors in that regard.”

Dicker Data's Australian portfolio includes HP, Toshiba, Asus, Lenovo and Microsoft among others. Meanwhile Express Data Australia's portfolio included Adobe, APC, CheckPoint, Symantec and Plantronics, while Express Online had the likes of Apple, Belkin, Brother, Canon and Kingston.

Australian reports say Dicker Data will not be distributing Apple in Australia.

Dicker says while previous conversations between Dicker Data and HP to distribute the brand in New Zealand have come to nothing 'we've been coming at it as a start-up' in the New Zealand market. Now, with the might of Express Data within Dicker Data, Dicker is hoping discussions will be more fruitful.

Meanwhile, Dicker says he's not a 'a massive fan' of exclusive distribution deals.

“I think the right number of distributors is three if you're a vendor. If you're a distributor, it's two. We are a high volume distributor. We were at $450 million last year and this combined entity will be over $1 billion.

“I don't think competition is an issue. No one single distributor is going to serve the market as well as it can be served.”

However, Dicker says when there are just two vendors, things can come down to offering the lowest price. “That's not as likely if you've got three distributors.”

He says while many vendors already have investment in Ingram Micro and Synnex in New Zealand and Australia, the dynamic in Australia at least, has now changed.

Gaining might

The combined Dicker Data/Express Data/Express Online entity has dramatically closed the gap between Dicker and Australia's front-runners in distribution, Ingram Micro and Synnex – and that's what Dicker is alluding to, when he talks about a changed dynamic.

“We were a distant fourth in the [Australian] market before,” he notes. Ingram Micro and Synnex were far and away the largest Australian distributors, with Express Data third but 'a fair way behind' in terms of revenue.

“Now, Ingram Micro and Synnex are not so far ahead. They're not out of reach. And that brings a whole different dynamic to the market,” Dicker says. “And that's how we're encouraging our guys to see things.

“With our combined revenue, we're still behind Ingram and Synnex, but it feels like there's a platform to move forward.

“When you're competing with companies three or four times bigger than yourself, you're fooling yourself if you think you're on the same level.

"But now, they're not so far ahead and you take opportunities where you can,” Dicker says, sounding a warning for the larger disties.

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