Bell still growing strong at 20

As Bell Micro celebrates its 20th birthday, Sara Yirrell talks to Don Bell about the distributor's plans going forward

Don Bell says Bell Micro is ready to branch out in 2008

Making the transition from a teenager to a 20-something is never easy, but to survive two decades in distribution and still be going strong is no mean feat.

Bell Micro celebrated its 20th birthday last week, amid wranglings with the Nasdaq board over compliancy issues to do with its account filings (CRN Online, 25 January), and surrounded by rumours suggesting it is a prime acquisition target.

However, minor problems and rumours aside, the global distributor is extremely bullish about the future, having posted strong, positive results, particularly in Europe (CRN Online, 9 January).
Chief executive Don Bell was visiting the UK office to celebrate the 20-year milestone and spoke to CRN about his company’s performance.

“We have made major strides globally,” he said. “North America is going well, as is Europe. We have consolidated our warehouses in Munich and Latin America. Our European operation has been getting a lot of recognition for its efforts. The team we have in place over here means I am really optimistic about the company.” Bell added that the distributor was similar to a teenager on the verge of its 20th birthday because it is ready to branch out from its roots.

“I think that we had an outstanding performance in 2007 and we are projecting conservatively for 2008, but overall it has been another significant improvement,” he said.
Graeme Watt, European president of Bell Micro added that the European performance has been particularly pleasing.

“European growth has been steady at around seven per cent, which in itself is not that bad. The important thing for us is accelerating growth. We have been remixing and reworking the business. We have seen some changes ­ for example we lost Oracle and have transitioned from EMC to NetApp, but overall 2007 has been steady.”

Watt said the distributor capitalised on Seagate’s announcement that it was ending its partnership with rival distributor eSys. “We managed to pick up more than our fair share of that business,” he said. “We have also made sure that the impact on Seagate and its resellers has been minimal. We are now the number one distributor for Seagate, Western Digital and Hitachi throughout Europe.”
He added that continental Europe now formed 45 per cent of Bell’s business, with Germany achieving 36 per cent overall growth during 2007.

Growing places
“We have moved from being an internal focused and fixing stuff kind of model ­ now we have become far more expansive in the market and more customer, products, technology and services based. As a result of that we have seen growth,” Watt said.
Bell has signed key franchises including Apple, Acer and Kingston Technology, and will concentrate on maintaining and improving its vendor relationships, as well as building new ones in 2008, he added.
Despite the continuing clouds of a global recession gathering, both Watt and Bell were cautiously optimistic about the year ahead.

“I have talked to several suppliers and they are all telling us the same thing ­ we are not seeing the effect [of a recession] yet, and we don’t know when we will,” said Bell.
“The key thing is to have momentum when a slowdown starts. If you are growing between 10 and 15 per cent a year, but slow down to five, it is bearable, but if you get into a
negative growth situation ­ it becomes painful.”

Bell was unable to elaborate on the distributor’s current financial
situation, but dismissed rumours that the company was ripe for acquisition as pure speculation.
“We are doing better than we ever have and this [the accounting situation] is the only negative thing we can say about the company. I hope to draw a line under it all very soon.”

European shopping trip
In fact, he added that Bell would be the one embarking on another acquisition strategy.
“Our main acquisition programme will be here in Europe ­ not only in the UK but also on the continent,” Bell said. “Particularly on the enterprise side of the business.”
Bell added that the distributor would be concentrating on its core competencies, rather than looking to branch out into new areas.

“We want to keep our focus on key areas such as storage and server solutions,” he said.
Jeremy Davies, senior partner at analyst firm Context, agreed that Bell was in a strong position.
“Bell seems to be very well entrenched in Europe and is going well. As far as distribution in general goes, everybody is aware that profit margins are tight, but nonetheless it has never been a better time for distribution. They have had to adjust to a low margin and find ways to add value and be more efficient, but they are managing this.
“Distribution is not dead and anybody who says that is wrong.”