Datalink CEO Says "Know Your Customers"
Paul Lidsky, CEO of infrastructure designer and supporter Datalink (NASDAQ: DTLK) spoke to Benzinga this week and said that the keys to long-term success and profitability are knowing the customers and knowing what products and services the customers are going to need before they need them.
Datalink Corporation assesses designs, deploys and supports infrastructures including servers, storage and networks. The company offers a range of practice-specific analysis, design, implementation, management and support services. "We do that across the United States and we have about 32 offices," said Lidsky. "Our customers typically hire us to design a data center infrastructure, once designed we sell them the necessary hardware and software to bring the design to fruition, and then we do all the consulting and integration work around the deployment of that hardware and software, and then we provide 24/7 customer support."
The company was formed in 1987 and it went public in 1999, though its roots go back into the 1950s when it was a distribution company. "We grow organically on an average in the mid-twenties each year," Lidsky said.
Naturally, in order to survive through the dot com boom and beyond, Datalink has had to diversify. "We have a long reputation in the storage industry, and our diversification up to a few years ago was more around partnerships with additional OEMs in the storage space," Lidsky said. "Our diversification in the early days was about spotting the next big OEM partner out there and connecting with them, and adding that to our portfolio.
"In the last three years, all of our diversification has been more about adding to our storage expertise with a data center infrastructure expertise, which is to say that in addition to storage and all that you surround storage with from a technology perspective, we now do quite a bit of virtualized data center work, VMware work, data center consolidation, data center networking, data center servers, so that's all add-on business or diversification from our original storage portfolio. Customers like to have integrated designs, and so that allows us to diversify our product and services portfolio."
In addition to knowing your customers, Lidsky advises companies to keep an eye on both the top and bottom lines. "It's easy to get enamored with top line growth at the expense of profitability, which ends up weakening your company over time," he said. "Know your industry. Know the trends and what's going to be coming around the bend."
In closing, Lidsky said that the biggest adversity he faces as a CEO right now is the economy. "Just coping with the ups and downs since the last recession has been challenging," he said. "As a public company, whatever's happening is very obvious. Private companies don't need to justify themselves at the rate that public companies do. Beyond macroeconomics, the biggest challenges are flawless execution, or as close to flawless as you can get."
On Friday, Datalink traded at about $8, up roughly 7 percent.
Follow me @BCallwood.
(c) 2013 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Tags: Paul Lidsky