Order HP or HPE products and there's a chance they come from a warehouse in Sydney owned by Dicker Data, a distributor supplying the IT businesses that provided products and services to many thousands of Australian organisations.
This business, founded in 1978, has played an important role in the rise of HP and HPE in many Australian IT environments.
That story started in 1993, when the personal computer revolution had taken off in earnest. Microsoft had taken the wraps off Windows for Workgroups 3.11, which was rapidly outcompeting IBM’s OS/2 as the favoured operating system for the PC architecture Big Blue had pioneered some years ago.
The PCs had become much faster, more capable, with new Intel 32-bit processors; Internet access was still an optional extra, and nobody at the time foresaw the monumental impact a fully connected world would have just decades later.
It was in that heady environment that Dicker Data took the first steps towards what was to become a long relationship with Hewlett-Packard, which at the time was a single company.
The significance of that partnership, not only in terms of the revenue generating behemoth it has become, but its impact on the rise of the Australian owned and operated IT distributor and the local IT channel landscape.
CRN Australia spoke to Dicker Data founders Fiona Brown and David Dicker about how it all started 30 years ago.
Compaq comes onboard
The story didn’t actually begin with HP straight off the bat. Instead, it all started with Compaq, which was once the largest PC maker in the world, which HP acquired in 2002.
David Dicker explained that while HP had a PC line in 1993, Compaq was the market leader.
“HP acquired Compaq to solve that problem,” Dicker said.
After “three years of pestering them,” as Dicker said, Fiona Brown and Geoff Anson at Compaq put together the distribution deal.
“Compaq was in a major growth phase,” Brown said.
“With management changes at the top in the early 90’s, Compaq appointed distributors to increase their market penetration and expand their reach.”
“Dicker Data was a logical choice in Australia with an extensive reseller network of around 3,000 partners throughout the country.”
“It was a beneficial partnership for both companies where Dicker Data could provide the tentacles into the market across the country in an efficient and cost-effective methodology.”
“Compaq engaged in price wars throughout the 90s to gain market share and compete with IBM and Dell for 1st or 2nd place. “
“It was aggressive and dynamic, and it was exciting to be part of the process,” Brown said.
Brown believes that what got Dicker Data the relationship and distribution agreement in the first instance was that Compaq wasn’t able to get out to market themselves because they didn't have a distribution channel in 1993.
“Compaq reached out to us with the view to appointing exclusive distributors in NSW and Victoria, as they didn’t have any distribution partners at that time.”
“We engaged with Geoff Anson who was dynamic and a go-getter. We were asked to present to the board in Compaq’s Lane Cove offices.”
“I prepared and presented our value proposition on a Toshiba laptop and projector to around 12 board members. “
“It was nerve-wracking to walk into the room, but they were all very friendly and luckily everything worked out well. “
“Geoff rang the next day to advise we had been selected to be their exclusive distributor in NSW and Victoria. “
“Initially, they were only looking at appointing Dicker Data in NSW but had decided to give us both territories, which was really a national role as they didn’t appoint anyone else at the time.”
That exclusivity didn’t last, with more distributors appointed as the Compaq business grew. Nevertheless, the deal had a major impact on Dicker Data.
“I think it really got Dicker going back in 1993 – so very, very lucky,” she added.
Brown said the first Compaq products were the laptops and then desktops and servers followed
“It was great for Dicker Data to have a complete range to offer our 3,000 plus resellers. “
“We only had laptops from Toshiba and printers from Epson, NEC and Canon up until that point. It was a huge boost to our sales and growth.”
“There was strong demand for Compaq from the beginning.”
“Compaq was a channel champion, not selling direct to users like Dell did.”
“IBM had burnt the channel in the 80s and they did not have a good reputation with the reseller channel.”
“Compaq were extremely supportive and provided great incentives and competitive pricing and margins for resellers.”
“Every day was fun; I loved going into the office. Our slogan was: ‘No 1 Distributor for No 1 Brands”.
“We learnt quickly that it was easier to sell products customers wanted to buy!” Brown said.
Lean beginnings, and a different, flexible culture
While the distribution business can be very tough indeed - Brown mentioned margins in the two per cent range - Dicker Data thrived by being a very lean operation, and doing things differently.
“We were able to survive because we owned our own facility, which we have always done.”
One way in which Dicker Data operated differently was that staff were all women, Brown said.
“We employed women who were returning to the workforce after they had a family,” she added.
“Most of the staff were working mums who could do school hours.”
“And so we offered flexible hours, so no-one had to make an excuse if they wanted to take a day off, or work for four hours that day, or two days a week.”
“That was actually what we encouraged, and we had a buddy system where everyone would support each other, and not take holidays at the same time, and we would do the whole process from beginning to end.”
“We never ran a commission structure or anything like that.”
“It was all just based around that flexible model, so very unique.”
“Luckily that culture is still there, even though we’re 850 people these days,” Brown said.
A culture of customer service
The different hiring approach and flexible work arrangements underpinned Dicker Data’s dedication to great customer service.
“We used to take the order, pick the order and ship the order so we knew it would go that day,” Brown said.
“We offered same-day couriers in Sydney in the 90s with a three-hour service.”
“I remember one customer ringing me to say ‘I only ordered my laptop an hour ago and I just received it!’”
“That level of service still exists today, but it’s not unusual these days.”
“Dicker Data has its own fleet of eight courier vans that go out twice a day in Sydney. “
“We have offered this service for over 15 years now.”
HP moves in and later, splits into two
HP acquired Compaq in 2002, initially keeping the two brands separate, and the US company wanted to shift sales into top gear.
“HP was extremely aggressive and wanted to grow market share,” Brown said.
“They had some fantastic rewards for the sales staff, where they could select household goods and other prizes from a catalogue.”
“There were holidays and price protection for existing inventory, incentive rebates and every support for the channel and marketing programs,” she added.
However, HP decided to split itself into two separate companies in 2015, for its retail and enterprise businesses.
“Personally, if I was HP, I wouldn’t have done it, but it has affected us operationally,” Dicker said.
Brown had a different take on the HP split, but concurred with Dicker that it required a restructure, and incurred additional costs.
Overall, however, the change was positive, with benefits down the track, Brown said.
“It was a big surprise, but very positive providing more opportunities for both businesses,” she said.
“The result has seen two major technology forces established.”
On the future with HP/HPE
CRN Australia’s last question to Brown and Dicker was about where they think the client, enterprise and software businesses at HP/HPE are headed.
Dicker’s response was short and to the point: “if I knew that, I wouldn’t be telling you… I’d be acting on it.”
Brown elaborated on what she sees coming up in the partner relationship with HP/HPE.
“There is focus on sustainability, security, AI and hybrid scalable platforms.”
“We will see a raft of new products incorporating revolutionary hardware and software technology to provide better solutions in these areas. “
“2024 will also benefit from a refresh cycle with customers needing to upgrade from the big work from home uptake in 2020.”
“David and I couldn’t have imagined Dicker Data would be where it is today.
"It’s been an amazing experience, and the industry has provided us with a fantastic journey.
"I was so proud when we were classified as “an essential service” during the pandemic.
“We keep the country running 24 x 7 x 365 days a year."
"If you need a HP/HPE part at 3am we will be out there in Kurnell picking it up and getting it to the required destination."
_page-0001_(1).jpg&w=100&c=1&s=0)
Integrate
