Welcome. Lynn S. Murphy, EVP Westcon NA

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1 Welcome Lynn S. Murphy, EVP Westcon NA

2 Millions Westcon Company Snapshot FY13 Revenue: $4.5B 68 Countries 1,600 Historic Gross Revenue Trend 20+ logistics/staging facilities 100+ Sales offices Backed by 3,000+ associates 20,000+ transacting customers globally Regional Mix NA 35% 1,400 1,200 1, ,126 1,146 1,153 1,089 1,188 1,116 1,259 1,167 1,248 1,259 1,418 EMEA 42% APAC 13% 600 LATAM 10% 400 Strategies Geographic Expansion Globalizing Vendor Representation Enhancement of Our Product Portfolio / Domain Expertise Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q

3 What s New at Westcon? Westcon welcomed our new CEO, Dolph Westerbos on January 1, 2014! Kicked off a new 3 year Strategic Plan Jan 14 Acquired new territories and capabilities to better serve our partners

4 What is a Strategy? A strategy is an integrated set of choices made by an organization to capture the essence of what and how it believes it will be successful For an organization, these choices include: What we do products, services For whom customers, stakeholders How to deliver internally, joint ventures, alliances, partners How we make money financial business model Sequencing of activities what has to happen and when These choices must be logically consistent so that all together they will enable the organization to deliver the desired results Growth is not a Strategy Professor Elspeth Murray Queen s University

5 Leadership A Balancing Act Manage today s business efficiently and effectively Create and build for the future

6 Westcon Winning Worldwide The Global Distributor of Choice Executing locally with exceptional people and solutions Profitable Growth Global Leverage Through Our People Customer First Global Technology Solutions Portfolio Operational Excellence Global Services Talent Development Understanding customer needs to provide optimal models for meeting their requirements Develop and optimize our portfolio of solutions with deeper vendor alliances by leveraging our global capabilities Continually serving our partners better by enabling our people and the business to work SMARTER To build global, differentiated, scalable, complementary suite of services (white label) for partners and vendors Best in class global IT industry employer of choice by attracting, developing and retaining exceptional people from around the world

7 Macro Market Conditions The United States is the second largest contributor to the somewhat better outlook for 2014, where growth is expected to increase from a dismal 1.6 percent in 2013 to 2.3 percent in Conference Board, Nov Moderate Rebound for 2014 Modest second-half pick-up. We expect GDP growth to average 2.2% in H2, up modestly from 1.8% in H1. Cutbacks in spending by the federal government will continue to be a drag on overall economic activity. further spending reductions are scheduled for FY2014, but a contentious debate over the proposed cuts is still taking place in Washington. HSBC Global Economics Quarterly Report Q4 Worldwide dollar-valued IT spending forecast will grow 3.1% in A reduction in 2014 growth expectations for telecom services and devices accounts for most of the downward revision. Gartner WW IT spending update (consistent with NA predictions) Source, Scotiabank Global Forecast

8 Macro Market Conditions The United States is the second largest contributor to the somewhat better outlook for 2014, where growth is expected to increase from a dismal 1.6 percent in 2013 to 2.3 percent in Cautious Optimism Conference Board, Nov Moderate Rebound for 2014 Modest Growth Modest second-half pick-up. We expect GDP growth to average 2.2% in H2, up modestly from 1.8% in H1. Cutbacks in spending by the federal government will continue to be a drag on overall economic activity. further spending reductions are scheduled for FY2014, but a contentious debate over the proposed cuts is still taking place in Washington. UCC growth somewhat stalled HSBC Global Economics Quarterly Report Q4 Worldwide dollar-valued IT spending forecast will grow 3.1% in A reduction in 2014 growth expectations for telecom services and devices accounts for most of the downward revision. Gartner WW IT spending update (consistent with NA predictions) Source, Scotiabank Global Forecast

9 Channel Growth Outpacing OEMs Click to add text 1) Diversification of offers 2) OEM increasing % via channel to drive share 3) Growing traction with service offerings 4) Focus on mid-market Channel likely to play a key role in influencing customer adoption of new architectures Acknowledgement of value proposition in physical, virtual and even cloud environments Source Raymond James 2014/03/10

10 Polling Question What Is Your 2014 Outlook? 1. Greater than 10% YOY growth 2. Between 5-10% YOY 3. Modest Growth (flat to 5%) 4. YOY Decline

11 Westcon NA Rationalizing the Global Strategy Who are our constituents What do they want / need Voice of the Customer, Vendor and Employee What is our value to the market External influences, what trends are we seeing SWOT analysis How do we mitigate risk Identifying top priorities avoid boiling the ocean What metrics do we need in place

12 Output = FY15 Priorities + Investments Run Organizational structure Talent Development Sales Execution (segmentation, Bus plans, QBR s) Operational Efficiency Grow Ecosystem solutions Talent acquisition - new skill-sets for solutions/innovation Address portfolio gaps Vertical focus and investment New/refreshed messaging Services emphasis Transform XaaS

13 Customer Profile Cost to serve Wallet share Relevance / Loyalty Resource Alignment by Customer Segment Dev Channels and prospects 75% of the VAR population 15% GPD = cost to serve model Named accounts 25% VAR population, 85% of GPD Focus on wallet share / relevance (services, new vendors)

14 Vendor Mix Profile 20% top line growth

15 Talent Development Education & Training Coaching skills development Performance Mgmt Certs New Hire training 360 Degree Feedback for select organizations Completed SJT testing for sales employees Career Path Mentor program Annual appraisals (98% completed, was 44% 3 years ago!!) Recruitment and hiring Interview skills cert Annual pulse survey Retention Canada and US benefits $0 renew Corporate Wellness Activities Recognition PC Unsung Hero award SKO sales awards

16 Vendor Trends Distribution consolidation initiatives Asking Channel to sell on business outcomes and understand new buyers outside of IT Reductions in vendor team size and greater reliance on the channel Increased emphasis on recruit and enablement Interest in new and more effective methods of marketing Business Intelligence of increased importance Interest in distribution helping them build multi-vendor eco-system solutions and or marketing initiatives GSA and SEWP schedules, assistance in market Seeking to partner with fewer but more skilled and proactive VARs (Federal, etc.) Exploring cloud solutions Rewarding value vs. volume

17 Partner Trends Increased emphasis on Vertical expertise Some are even hiring industry experts from the vertical who have limited knowledge of IT Healthcare, Higher education, SLED, Retail and financial (in order of interest) Increased Interest in technology trends Multi vendor solutions becoming of greater interest such as business continuity, mobile security Ease of doing business operational efficiency Business intelligence of increased interest including dashboards, heat maps, POS installed base migration. Also interested in benchmark data as to how they are performing vs. the average Cloud requests from their end users increasing rapidly growing need to offer as an option Lower barriers to entry with new vendors and new competition Assistance with GTM execution (POC, demo kits, LEAP) Building customized messaging

18 Polling Question Pick your Top 3 trends: 1) Increased emphasis on Vertical expertise 2) Increased Interest in technology trends 3) Multi vendor solutions becoming of greater interest 4) Ease of doing business operational efficiency 5) Business intelligence 6) Cloud offers 7) Lower barriers to entry with new vendors and new competition 8) Assistance with GTM execution (like the sales demo kits) 9) Building customized messaging 10) New sales approach selling on business outcomes vs. product