Zones CEO: 'We're Accelerating Our Services Push'

Zones is stepping up its services business under new CEO Murray Wright.

Wright, a longtime distribution executive who previously served as president of Tech Data's Americas region, joined the solution provider in August. In an exclusive interview with CRN, Wright outlined his plans for the company as it looks to grow beyond its core hardware and software reselling business. Specifically, he talked about the big investments Zones is making around its services and solutions business, as well as new markets like cloud. Here are excerpts from the conversation:

What's your vision for Zones? Where do you see the company fitting into today's IT channel?

The most common question I've been asked over the last eight weeks has been, 'Why'd you join Zones?' and the reason is closely tied in with the vision for the company. And as I've said to the management team here and in a variety of town hall meetings, I didn't join Zones to just manage the existing business. There's an exciting opportunity here and there are many investments that have been made within Zones over the last 18 months that we really need to capitalize on. And taking the company from its current position in the marketplace and growing it -- and even doubling that business -- is the exciting part for me.

We've made big investments not only in [internal] systems and tools to help build that foundation, but we've also spent a great deal of time attracting resources to the company to really round out our portfolio as a solution provider. I think all of it comes back to the fact that we've got a great technology portfolio, and the company is very focused on execution. So the vision is accelerating the overall business with the strengths we have and expanding in new solutions areas.

Will growing the IT services side of Zones be part of the strategy?

Absolutely, 100 percent. It already is part of the strategy today. We've made investments, added talent, opened solutions centers and offices around the country to be closer to our customers and have our system engineers and solutions architects closer to those businesses. All of those investments have already been made, and we're going to continue to make more through the balance of this year. And then we're going to try to make sure we shift a little bit to focus on utilizing those assets. So we're well-positioned to provide a lot more solutions to our customers that include not only the technology products but the services that put it all together.

In terms of people, what kind of investments have you made on the services side?

We've got coverage around the country of about 150 people that are focused on providing technology support and services, and that doesn't include our software licensing business. That's a separate business, and you need to be pretty savvy on the solutions and services side today with [software] licensing because that weaves everything together.

What about cloud services? Will Zones have a presence in that market?

Yes, absolutely. We're still trying to figure what our role should be in the cloud. I'm confident that we won't be building our own data centers [for cloud hosting]. But we want to make sure that we're in an excellent position to provide our customers with solutions, whether it's public, private or hybrid clouds. We've got the resources and infrastructure for the cloud. It's one of the five strategic areas for the company -- data center, mobility, software, security and cloud -- so we'll absolutely continue to invest in the cloud, but I'm not quite sure what it's going to look like in two years.

Are you getting cloud demand or interest from existing customers?

I've had limited exposure so far to our customers, but I'd say, so far, it's mixed. I wouldn't say that basically on my exposure, so far, that every client call we go into, people want to talk about cloud. I haven't seen that yet. There's curiosity about cloud. And customers are always asking questions about how they can become more efficient and productive; those conversations are fundamental. And sometimes cloud solutions enter into those conversations, and sometimes they don't.

NEXT: Cloud, Mobility And More

Where are the core areas of growth for Zones from your perspective?

First, we're seeing great growth in our data center business, which includes networking. We've seen excellent growth there because that's where we've made a lot of investments in engineers and solutions architects to build momentum there. You'd expect that a lot more data center business would come out of that investment, and that's exactly what's happening. We're also seeing growth in mobile devices and becoming a mobility destination of choice. Many CIOs are trying to figure out the bring-your-own-device trend and mobility strategies for their companies, and we feel we have a very good portfolio and solutions offerings there.

Speaking of mobility, Zones is one of a handful of companies under the Microsoft Devices Program that can sell Surface tablets. How has that business been for Zones?

I don't have a ton of visibility there just yet, but I can tell you that the Surface business is growing. It obviously started, by comparison to other products, from a smaller base. But it is growing. The feedback from my team is that there have been a lot of great improvements with the second-generation devices.

You've got a big Apple business. What do you see happening there?

That's a very robust area. There are more corporate solutions today that include mobile devices like tablets, and that's good for our Apple business. We're definitely seeing Apple in more corporate environments today. In both cases, with Microsoft and Apple, those are very important relationships and I don't see that changing any time soon. In fact, we're focused on making sure we're nurturing them even more and growing those businesses.

What about vertical industries? Where are the biggest growth drivers?

I'll tell you that our health care guys at Zones are absolutely killing their number right now. I won't say what that number is, but we are really executing well above what our expectations were for that business. So we're seeing tremendous growth in health care IT, and we're continuing to add resources there as well. And I'll say it's refreshing to be at a privately held company that doesn't need to report results every 90 days, and can put a business plan together and make investments in certain market opportunities and not have that 90-day time line to deal with. I think that's great.

Do you feel being a private company is an advantage over some of your publicly traded competitors?

After being here two months, yes, I absolutely think it is an advantage. We can make a lot of investments and there isn't a public market that needs to know how we're investing our money or how quickly we're getting a return on those investments. It allows us to be a little more nimble and attack market segments differently than a publicly traded company.

Is Zones looking to partner with smaller, regional solution providers to expand the services coverage?

No. If we don't have the resources internally, then we're using the resources of our major vendor and distribution partners and using the tools and capabilities that they have. In fact, from everything I've seen so far, I think we're suboptimized in some of those areas. We have a lot of resources and infrastructure that we've built here. And that's the mentality here: Make sure we have the infrastructure here at Zones that's ours and that can differentiate us in the market.

A lot of larger, national solution providers like Zones and some of your competitors have been known as direct market resellers or DMRs. Do you feel that term DMR or even reseller still applies to companies like Zones?

It certainly doesn't for us. I can't speak for everyone else, although I have had in the recent past a chance to talk to all of those executives as customers in my role in distribution. But I don't think the term applies. Here's how I see it: The foundation of the company has really been built on that product business, and it's still an important part of Zones and it will be a foundation for us going forward. However, all of the growth and tremendous opportunity is going to be taking the great customer relationships we already have and working with them in their data centers and helping them understand the service capabilities that we've got. So the term DMR probably needs to change. I think national solution provider is a more accurate description.

PUBLISHED NOV. 8, 2013