A Year and Decade to Remember

By Tim Curran, GTDC CEO

Many people would prefer to forget 2009 — now often dubbed as "the Great Recession."

No doubt, the economic turbulence of 2009 gave most anyone in the IT industry cause for queasiness. Despite the hardships, however, in IT distribution we have plenty of positives to take away from this challenging past year.

Vendor and distributor partnerships gained strength through the adversity. Numerous additional manufacturers and publishers turned to distributors and their reseller channel connections to reach new markets, both geographically and technologically. Distributor service offerings continued to advance in scope, quality and value to solution providers as well as vendors.

Many distributors opened or expanded solution centers in 2009. Vertical market programs, specialized solution provider communities, online business capabilities, credit/finance, technical services and more all made important strides. And during these tumultuous times, the SG&A of publicly held IT distributors remained extraordinarily low as a percentage of sales. Efficiency at its finest.

Signs of overall market recovery have emerged alongside these and other encouraging developments. Recent quarterly distributor sales tracking in the U.S. and Europe, as reported by NPD Group's Distributor Track ® and Context SalesWatch databases, respectively, shows significant revenue improvement in both regions, particularly in the small-and-mid-size business segment.

Distributor Cost Structures Scale Quickly as Market Conditions Change

Distributors methodically adjusted their operations to the economic downturn over the past year (as well as the one that hit IT earlier in the decade), illustrating how well their cost structures adapt to recessionary conditions. Vendors that had once fixated on growing their own distribution capabilities further realized they cannot deliver the same efficiencies, breadth of solutions or market reach on their own. And the fiscal argument continues to point toward distributors as the preferred, most cost-effective approach from front-line channel sales and marketing perspectives to back-office accounting point of views. A third-party "Costs of IT Distribution" study now backs this claim with independent facts and figures.

Technology growth areas that fueled — and continue to accelerate — industry momentum range from mobile solutions, cloud computing and security applications to comprehensive storage, point-of-sale, wireless networking and other communications technologies. While the recovery may be more evident in the U.S., which reached $1 billion in weekly sales not long ago for the first time in over a year, the reasons for optimism are clear across the world. European market sales, for example, recently increased sequentially over the previous quarter for the first time in over a year. Moreover, in the 2009 FORTUNE 500, IT distributor profit growth actually outpaced that of the overall computer industry category.

Rising Industry Stock Performance

Finally, in one of the areas in which distributors have often lagged other IT industry companies, we see that distributor stocks are on a much better path. Consider, for example, that stock prices for the world's five largest IT distributors appreciated by an average of 90% during the past year.

It's easy to say "good riddance" to 2009 when you think about all that went wrong or could've gone better in the year. On the other hand, IT distributor performance in these tough times underscores how well-positioned the industry is for long-term success. The past year actually culminated an entire decade that validates this reality beyond a shadow of a doubt.

Here's to a prosperous New Year — and building on the takeaways of 2009!

NY Investor Conference May 5
to Give Analysts In-Depth Insight

The 2010 GTDC Investor Relations Conference will provide a unique global perspective on IT industry market conditions and business drivers — as well

as an updated perspective on the many reasons to invest in distributors.

This conference, May 5 at the Millennium Broadway Hotel, will deliver more than compelling observations and insight. Attendees will get a comprehensive look into what's driving IT industry recovery, including the top categories and performers based on actual sales-out data aggregated in NPD and Context databases.

The top minds in the business will share their first-hand knowledge of what's really happening in IT, how distributors are capitalizing, and where they're focusing their initiatives. Distributor CFOs are slated to join us in 2010 along with presidents and CEOs from these market leaders on the technology front lines.

Informative panels, presentations and plenty of networking opportunities all make the 2010 GTDC IRC a day Wall Street analysts won't want to miss.

Know the Trends by Region

Get up to date on U.S. and European market trends with the Q1 TechView Webcast.

Microsoft Turns to GTDC for Distribution Perspective

GTDC CEO Tim Curran recently spoke at separate Microsoft meetings focused on Latin America and Asia-Pacific markets, which are also part of the GTDC's international expansion plans. Participants gave high marks for this unique insight into the distribution industry, especially with respect to trend information presented based on the NPD Group's Distributor Track ® and Context SalesWatch databases.

Email us at info@gtdc.org if you are interested in having a GTDC exec speak at one of your upcoming events. It's a great way for vendor companies to help their headquarters teams better understand the dynamics and value of IT distribution!

Global Technology Distribution Council events, initiatives and membership all grew substantially in Europe over the past year — complementing the organization's expanding array of activities in the U.S. and other regions. The success of the GTDC European Conference was among the highlights, bringing together the region's top vendor channel executives and distribution leaders. Planning for this year's event in Amsterdam, June 15-16, at the Radisson Blu Hotel, is already in progress!

GTDC focus areas in Europe this year include:

Enhancing Conference/Workshop Programs — Face-to-face and online engagement on the initiatives that matter most to IT vendors and distributors, with a variety of formats to maximize results ... bigger and better than ever in 2010!

Expanding Market Research and Analysis — The GTDC's partnership with Context exemplifies this focus, as aggregated GTDC member sales-out data supports a corresponding subscription-based service for unsurpassed insight into European IT market trends.

Strengthening Industry Issues-based Initiatives — By combining its decades of distribution-industry experience with independent analysis, member committees, and other resources, the GTDC develops recommendations from a highly informed perspective to help resolve issues of regional and global industry-wide importance.

Advancing Distribution/Supply-Chain Knowledge & Expertise — A fast-growing aspect of the GTDC's operations is its communications support that ranges from having a knowledgeable GTDC executive speak at your events to our informative Webinars, TechView reports and media relations activities. Plan ahead and request a GTDC distribution industry session or presentation at your next event!

Visit the members page of the GTDC Web site to learn more about the distribution companies that comprise the organization today — representing more than $100 billion in IT industry sales.

E-mail info@gtdc.org if you would like to learn more about the 2010 GTDC European Conference or other regional GTDC activities and initiatives.

New GTDC Members in EMEA and Asia Pacific

The GTDC is pleased to welcome three new members in Europe and Asia Pacific regions.

20:20 Mobile Group is now Europe's leading mobile handset distributor and in the top three globally. Headquartered in Crewe in northwest England, the company is also recognized as the world's largest distributor of mobile phone accessories.

The ALSO Group is a leading wholesale and logistics company for Information Technology and Consumer Electronics (ICE) in Europe. ALSO is active in seven European countries under the ALSO brand in Switzerland and Germany and GNT in Finland, Norway, Estonia, Latvia and Lithuania.

SiS Distribution, headquartered in Malaysia, distributes an expanding range of products including mobile communication devices, network security solutions, networking peripherals, multimedia devices and accessories, computer storage solutions and more to IT solution providers in the Asia Pacific region.

Bangalore Meeting Focuses on GTDC Opportunities in India

The GTDC held a meeting in Bangalore, India, in December that included the top distributors in the country, including Redington Group, which is already a GTDC member — the organization's first member headquartered in India.

"We see tremendous opportunity to grow in this part of the world," GTDC CEO Tim Curran remarked. "Distribution leaders who attended the meeting expressed great interest in the proposed initiatives we presented and the comprehensive industry information and overall value that our organization provides."

Save the Date: GTDC Vendor Summit 2010,
September 21-22, Newport Beach, Calif.

The 2009 GTDC Vendor Summit drew a record number of attendees at a time when most industry events experienced substantial declines in attendance. Such strong vendor participation attests to how dedicated IT companies have become toward their distribution partnerships. Be sure the 2010 conference at the Fairmont in Newport Beach, Sept. 21-22, is on your calendar!

If you missed the 2009 event, click here for a comprehensive report. The 2010 event represents the ninth year for this annual conference that brings together top

vendor channel executives with distribution leaders as well as independent industry experts.

Send us a message if you'd like to learn more about GTDC Vendor Summit 2010!

Partner Code of Conduct Formalizes
Industry-wide Ethical Standards

GTDC members recently introduced a "Partner Code of Conduct" affirming the importance of adhering to the highest standards of legal and ethical conduct in technology distribution across the world.

"Our members strongly endorse this partner code of conduct for a variety of reasons," commented Tim Curran, CEO of the GTDC. "As the industry's most successful and influential IT distributors, they strive to uphold and advance the highest standards possible with both vendors and the reseller channel. Many

GTDC members are expanding product and service offerings on a broad geographic basis, which makes the adoption of consistent standards and principles even more important. No matter what part of the world IT companies engage GTDC members, they can expect appropriate accountability and uncompromising integrity."

The Partner Code of Conduct represents another way the GTDC is advancing its support of members and their partners in areas that make a difference.

Curran explained that many IT vendors and a growing number of resellers request that distributors sign their respective ethics statements in support of various business agreements. "We expect the adoption of an industry-wide partner code of conduct to help simplify and standardize related contractual procedures for everyone — vendors, resellers and distributors," he said.

The Partner Code of Conduct is posted on the GTDC Web site. Send a message to info@gtdc if you have questions.

Industry News: FORTUNE and LA Times Pick Up on GTDC Releases

Recent GTDC press releases gained mainstream business news attention. See links below to these and related trade press coverage:

Tech giants that 'get' small business (FORTUNE)

Research Firms Agree: 2010 Will Mark A Return To Growth (CRN, US)

Tech firms are enjoying their economic stimulus (LA Times)

SMEs are dragging the UK out of recession, GTDC claims (CRN, UK)