Dicker Data 32 years and going strong

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This article appeared in the April 2010 issue of CRN magazine.

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Dicker Data 32 years and going strong

It's a relaxed David Dicker on the phone from Italy, where he is holidaying with family, who keeps telling me there's nothing more complicated to running a successful business than following simple rules.

"We have a very simple role," he says, describing how distributors facilitate the supply and demand chain. But you get the feeling, by looking at Dicker's longevity of 32 years in the industry and a list of milestones, that he might be being a little modest.

You also get the impression Dicker's no-nonsense, buzzword-free manner of explaining himself would sit well with customers who need something, need it now, and need it delivered with a minimum of fuss.

Beginning its business life as an importer of microcomputers, Dicker Data shifted its core activity to keep abreast of the times. Also behind the company's success lies the analytical, methodical mind of a programmer.

David Dicker is a self-taught programmer who started with Basic before moving onto assembler.
"We spent about 10 years in the 1980s trying to build our own general purpose computer," Dicker says.

He has written his own Computerised Trading System (CTS) in Perl, although this project is not directly related to Dicker Data.

The background in programming is also present in the business, which holds a cache of server expertise. "Most people are not aware of this but we have a tremendous amount of in-house server expertise," Dicker says.

"We have a whole shed full of guys who know how to configure servers and sell them to the customer, and this is an important part of what a distributor does."

Dicker says this is an important part of the relationship between distributor, reseller and customer because of the complex nature of server installations.

He describes Dicker Data's role in supporting resellers as more complicated than what distributors in other industries do but that "it all leads down the same path" towards satisfied customers and a profitable business.

According to the boss, Dicker Data's in-house server expertise provides a competitive advantage.

"Business is basically a competition and all you really have to do to be successful is be better than the next guy," he says.

This approach to managing Dicker Data's business has proven effective, with the company boasting a long history in a competitive industry, and there's plenty of room for growth yet.

On the move
Dicker Data will soon be operating from a new facility, located at Kurnell in Sydney, not far from the current office. The new base of operations was, at the time of writing, approaching the fit-out stage and is expected to be operational by April.

The new premises is on a 2.6 hectare site with 1000 square metres of office space and 4000 square metres of warehouse. There is enough room to add 13,000 square metres as needs require.

Dicker says this will allow for greater efficiency than the current set-up in which warehouse and offices are in separate locations served by a constant flow of forklifts. Time to move it under one roof, Dicker says, and the efficiencies gained will translate into better service.

While Dicker Data is gearing up for growth, Dicker says there's not much innovation at play in the market at the moment. Industry growth is driven by business and consumers reacting to exciting developments; of which, Dicker says, there isn't very much about.

But mention e-readers, and devices such as Apple's iPad and HP's Slate, and Dicker is right on top of the growth potential these devices could foster. The discussion changes pace. "I think these e-readers are going to become ubiquitous in the not too distant future," Dicker says.

"They will replace magazines and other printed matter. I was thinking the other day that what would be a really great product is an e-reader device that could fold out like a magazine and with that you could replace the printed version yet still have a subscription-based model.

"Then the publishers could go back to selling things and get away from the everything-is-free-on-the-internet mentality, which is clearly a bad business model."

Dicker sees tablet devices and the content distribution business model they support as a winning formula. "If I was younger, I'd get into it myself," he says.

Of course, the business potential that's relevant to Dicker Data and its industry partners is what could happen in the server space.

The premise for a boom in sales of server equipment is obvious. While the clumsy distribution of printed media will dissolve, publishers will find another delivery bottleneck in moving gigabytes of data. As network activity grows with the rise of the tablet, so will demand for servers.

The data distribution and delivery business, it seems, is about to ride a wave of growth. The only negative in e-reader devices, Dicker says, is that they're cheap, and thus the low margins mean there won't be quite as many riches on offer.

And speaking of margins, what does Dicker Data regard as the essential qualities of a successful reseller? "I think you only need the same traits in order to be successful at business no matter what industry you're in," Dicker says, in his matter of fact way.

Next page for more on CRN's profile of Dicker Data

Close and personal

Yet there are special considerations in selling IT, of which Dicker is acutely aware. Dicker illustrated a special facet of the computer industry by offering an episode from his own business experience.

"Back in the 1990s we tried to build a retail chain on a franchise basis and eventually we gave it up because it was very hard to make enough profit to fund the marketing," he says.

What the experience taught Dicker was that the smaller operator - who doesn't need the high traffic required by large operations such as Harvey Norman and therefore can avoid costly saturation marketing - has a distinct business advantage derived through more intimate customer relations.

Dicker says it came as a surprise to him that the smaller guy can make it against the bigger guy because it's so much easier for a small dealer to maintain real relationships with the people who walk through the front door.

"The thing is that the products on sale are so much more technical than a washing machine or a car and that technical requirement is always going to leave a place for the small guy with a low overhead and a good skill base to develop a relationship with his customers."

Dicker says the small operator has the ability to develop a loyal customer base who will return for upgrades and peripherals and rely on the operator's expertise to guide them through the maze of complexity that comes with using computers and other equipment.

"Harvey Norman and those kind of operators are never going to compete with that because they don't have the set-up to make it work," Dicker says.

"They can't have the same level of expertise and personal contact and can't be as good at it as the smaller guy who has years of experience with the product."

Yet the large franchise operator and the small shopfront business, curiously, co-exist.

"There's an equilibrium there because neither of them are going to drive each other out of business," Dicker says.
Each has their place and each will find customers with different needs. Some will be looking for the cheapest product available and other customers will look for someone they can trust with their long-term IT requirements.

Turning attention to the relationships that has made Dicker Data the success that it is, Dicker says he rates highly his industry partnership with HP. A look at his vendor list shows he likes to deal with the big names.

"It's a volume business and as a distributor you've got to go with the big guys," Dicker says. "We strongly rely on HP products and I think they're miles ahead."

Dicker Data has since announced that it is preparing to list on the Australian Stock Exchange in a move intended to strengthen the company.

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