Ingram Micro Inc. has been ahead of its main rival for the better part of a year now.
But Clearwater, Fla.-based Tech Data Corp. is getting new blood that could create some tougher competition for Santa Ana-based Ingram Micro, the largest distributor of technology products.
For the first time in 20 years, Tech Data has a new chief executive, Robert Dutkowsky. His predecessor, Steve Raymund, remains chairman. Raymund has been looking for a replacement for several months.
The new guy faces a big task. Ingram Micro has been winning in Europe as it continues to expand in Asia, an area where Tech Data doesn’t compete. Ingram Micro’s stock is up about 6% in the past year while Tech Data’s is slightly down.
Dutkowsky is an outsider, and he’s no slouch. He spent 20 years at IBM Corp., including some of his time reporting directly to the legendary Lou Gerstner. As you may recall, Gerstner also was an outsider who helped save IBM from irrelevance back in the 1990s.
Dutkowsky’s r & #233;sum & #233; holds up after he left IBM in 1997. He helped grow an EMC Corp. division’s annual sales from $2 billion to nearly $9 billion.
Dutkowsky did a question-and-answer session with Computer Reseller News, a go-to publication for the technology distributors and resellers. He said he doesn’t plan on letting Tech Data coast in its market.
“What I see at Tech Data is a company that’s got the strength, scale and presence in the market to really lead an important segment in the IT space and a company that really has some focus and energy to get right back on top of its game in a quick period of time,” he told CRN.
He also isn’t worried about competition from Ingram Micro.
“That’s another thing that attracted me to Tech Data, the idea of just how competitive the market is that Tech Data plays in,” he said. “Some people shy away from that, and some people radiate toward that. I happen to be one who radiates toward competition. I love to be in the midst of a fight.”
Analysts at the Robert W. Baird Co. liked the move, though the stock basically was flat the day of the announcement.
The Baird analysts said the appointment removes a significant overhang on Tech Data’s stock. Dutkowsky has room to improve the company’s business through his new perspective and ideas, they said.
Nothing will be easy. The business is a difficult one, with razor-thin profits and massive logistics issues.
Ingram Micro has been beefing up its operations by adding services to help computer resellers and expanding rapidly in Latin America and Asia.
Ingram Micro also has been streamlining operations, with a recent announcement that it will cut about 80 workers and outsource their jobs.
Its efforts could be paying off. Ingram Micro announced in late August it expects third-quarter sales of $7.3 billion to $7.5 billion, in line with estimates of $7.4 billion, up 6.5% from a year ago.
Net income is expected at $49 million to $56 million compared to estimates of $54.4 million, which would be down about 11% from a year ago.
MSC on Nasdaq
MSC.Software Corp. is back on a major trading board again, but it’s not the New York Stock Exchange.
The Santa Ana-based software company recently went up on the main Nasdaq board under the symbol of “MSCS.”
The company had gone on the pink sheets in early 2005 after years of trading on the NYSE.
Bill Weyand, chief executive of MSC, said the move is a big part of the company’s turnaround.
“Improved liquidity, less volatility and higher trading volumes are important advantages that will result from listing on this state-of-the-art electronic trading platform,” Weyand said. “We believe that a new group of investors will now become aware of MSC, and that should improve overall stockholder value.”
In the past few years, MSC had delayed filing reports with the Securities and Exchange Commission as it grappled with accounting difficulties. The company switched accounting firms and restated some results.
Weyand has been working to get the company back on track and got up-to-date on its filings earlier this summer.
Shares of the company have stayed relatively flat since its debut earlier this month. MSC’s market value is about $700 million.
PC Slowdown
There’s more bad news for Gateway Inc. and the personal computer industry.
Gartner Inc. of Stamford, Conn., said it expects global revenue to fall in 2006 for the PC sector. The market researcher said it expects a 2.5% decline in revenue this year despite a 10.5% rise in sales of computers.
The culprit: lower prices.
“Steeper PC price declines will spur unit growth in mature markets like the U.S. over the near term, but growth will eventually slow to mid-single digits in these markets as PC replacements fade and saturation becomes more problematic,” said George Shiffler, research director for Gartner Dataquest’s client platforms research program.
Gateway gets the vast majority of its sales from the U.S. but has been making a push into global markets.
The company has struggled with red ink, a plunging stock price and slow sales directly to consumers and businesses.
J. Edward Coleman recently joined Gateway as chief executive.
Coleman joined from Melville, N.Y.-based electronics distributor Arrow Electronics Inc., where he was a senior vice president.
