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Thirty years of doing deals with Dicker Data and HP/HPE

Thirty years of doing deals with Dicker Data and HP/HPE

Achieving the distribution rights to Compaq was a game changer and cemented Dicker's future as a major player.

Dicker Data founders David Dicker and Fiona Brown.

Dicker Data founders David Dicker and Fiona Brown.

Credit: Supplied

In 1993, a suited-up Fiona Brown was holding onto her Toshiba laptop, contemplating whether she should have bought a Compaq one for the boardroom meeting she was about to enter into with a few of the vendor's key executives. Perhaps later, just in case they don’t get the deal. 

“They rang the next day and said they were giving us the distribution deal for New South Wales and Victoria,” Brown recalled. 

“It was a game changer! It was the biggest event in our early history. 

“Being appointed as the exclusive distributor was a personal highlight and an exciting opportunity for Dicker Data, that on reflection, cemented our long-term future as a major distributor in Australia and New Zealand.”

At the time, Dicker Data had a few big names in its portfolio such as Toshiba, Epson, NEC and Canon and had been in the distribution game since 1978, building the largest SMB reseller network in the country. 

“Compaq was a major brand in the PC market with both desktops and laptops and later networking products. A complete solutions provider, filling a significant gap in our product range,” she said. “We had over 3,000 resellers, some that we've dealt with for 15 years. So, we had all these little tentacles out into the marketplace that could get the reach that Compaq was looking for.”

The Compaq deal gave Dicker Data an increased product range to grow the business and its customer base, marking it as one of its largest vendor partners in its portfolio still to this day. The number of small- to medium-sized business (SMB) resellers has also spread from 3,000 to more than 10,000 across Australia and New Zealand.

“Compaq was incredibly supportive and provided the necessary sales and marketing tools to compete in the channel. Compaq only sold through resellers,” Brown said. 

Throughout the years, the market shifted with Compaq buying Digital Equipment Corporation in what was described as a mega deal in 1998 for US$9.6 billion. Three years later in 2001, HP made the move to purchase Compaq for US$25 billion, changing the competitive PC landscape ever since.

Many sleepless nights were had as it was determined who would survive the distribution rationalisation that transpired as a result of each acquisition. 

When Compaq bought Digital, there were 16 distributors at that time and that was brought down to three or four, which Brown described as “really harrowing.”

“For the people who didn't make it through, that was the end of their businesses,” Brown said. “So I wore my lucky suit on that occasion for the HP rationalisation when they bought Compaq. That was rationalised from six down to two or three. We were just so fortunate that we were selected to go through but I think it was the fact that we specialised in that SMB space, that's what got us through and is still our strength today. 

“I'm very fond of all the regional and smaller resellers. We never treated them any differently and they got the same pricing and same setup.”

CEO David Dicker added with HP buying Compaq, this paved the way for the distributor to access HP’s printer segment, a slice of the portfolio it had been vying to access for years. 

“Coming through the Digital/HP distributor cull was probably our biggest achievement after initially gaining access,” Dicker said. “We got through that despite betting we would not make it, which was very satisfying.” 

Dicker Data was in a unique position, owning its facility with no debt and a very lean operation, which allowed it to compete through the price wars of the 90s.

“Looking back, we were entrenched with our channel partners, some for 15 years plus and those relationships supported us and stayed loyal throughout the rationalisation of the channel,” Brown said. “We kept doing what we had always done and remained flexible, with our sole purpose to provide the best service and support in the industry.

“Other disties couldn’t compete on 2 per cent gross margins and didn’t make it through the rationalisation that took place, especially with the Digital acquisition and then the Compaq acquisition. 

“It was very stressful knowing with each acquisition that distributors would be terminated through a presentation and elimination process. There were many sleepless nights worrying if we would make the cut.”

Dicker added it has always managed to meet and beat its competition, relying on its performance metrics.

Specialising in SMB

Still to this day, Dicker Data holds the highest SMB market share with HP/HPE products but also recognised the need to diversify during the past 10 to 15 years to concentrate on other market segments. 

“At one point, HP represented over 70 per cent of our business and they suggested we needed to diversify,” Brown said. “We work well together and can rely on each other to provide competitive solutions to our customers across the board.

“Somehow, we have managed to maintain the culture from those early years with a very flat structure. We didn’t have different pricing levels or penalise a regional partner because of their size. We treated all our resellers equally.”

Dicker Data has continued to maintain its relevance in the market by sticking to the basic fundamentals of providing quick delivery and service with expert product knowledge and flexibility to all partners, Brown said. 

Over the years, Dicker Data’s own business has evolved into a large ASX-listed company, making many key acquisitions throughout the years in Express DataHillsExeed and CSP, and continuously building its Kurnell-based facility. Hiring more than 650 locals has also turned the distributor into the largest employer in the Sutherland Shire. 

“Our fundamentals are the same and we are here to represent our vendors and support our customers. We have a good blend of size and speed,” she said.

“The executive team – Vlad[imir Mitnovetski], Mary [Stojcevski] and Ian [Welch] – are the best performers in the industry, all long-term, committed and extremely skilled in executing the strategy of the business. 

“David and I have been very lucky to be in the right place at the right time and take our opportunities when they come along, and to have the privilege to work with such a brilliant team and vendors like HP and HPE.”

Dicker Data’s HP/HPE champion Marty Simunic has also been instrumental in maintaining the relationship for the last 12 years, with more than 60 dedicated people in the HP / HPE business unit performing and executing on a daily basis. 

“We have grown together, maintaining a close and positive relationship. We have always acted in the best interests of the organisations for the long term and value the support, commitment and respect for each,” Brown said. 

“It would have to be one of the best ongoing partnerships in the industry – I can’t think of any better, with the same consistent performance year after year; some things do improve with age.”

Brown said she’s had the pleasure of working with many HP and HPE executives over the years, giving special thanks to Ian Penman and Rosalie Boyd who decided to appoint Dicker Data in 1993. Chee Mai Gan also used to manage laptops when Brown was buying. 

“We did many fantastic deals at the end of the month and quarters. It would be interesting to add up the number of HP computers we sold over the last 30 years,” Brown said. 

Dicker Data has also collected a few HP and HPE Distributor of the Year accolades, which Brown said was still an exciting experience and it was proud to achieve in recognition of the relationship with the awards that take pride of place in its Kurnell foyer.

“We have maintained our market share with HP, especially in the SMB and HPE space over the 30-year relationship, not an easy feat with the multinationals nipping at our heels,” Brown said.

“We have always achieved our targets and maintained HP as one of our largest suppliers and longest-standing relationships in the industry.”

There have been a few key takeaways throughout the years, such as ensuring it can supply the products quickly, providing expert product knowledge, doing what you say you are going to do, responding and being consistent; obtaining the necessary skills to grow and excel and continually invest in the people, facilities and the business to support ongoing growth.

For Dicker, performance has always been the top priority, as HP/HPE continues to be one of its most important vendors. 

In the year ahead, Dicker Data sees significant growth across both product portfolios. 

“HP/HPE have exciting plans in sustainability, security, AI and hybrid product lines to name a few,” Brown added. 

“We are on the cusp of new technology developments where HP will include additional software and hardware to combat cyber security and incorporate AI functionality in integrated solutions. We are going to see hybrid solutions on-premises and in the cloud for greater flexibility and peace of mind for our customers.”

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