CDW Corporation | research notes

Introducing CDW Corporation: A Global IT Solutions Provider

Overview

CDW Corporation is a leading global provider of integrated technology solutions to businesses, government entities, and education institutions. Headquartered in Vernon Hills, Illinois, the company offers a comprehensive range of IT products, services, and consulting expertise to meet the evolving needs of its clients.

Product and Service Offerings

CDW's product portfolio encompasses hardware, software, networking equipment, cloud services, and other IT solutions. The company supplies products from top manufacturers, including Dell, HP, Cisco, Microsoft, and IBM. In addition to product sales, CDW provides a wide array of services, such as:

• Network design and implementation
• Data center infrastructure management
• Cloud migration and optimization
• Managed IT services
• Cyber security solutions
• Professional consulting

Market Presence

CDW operates in over 180 countries and regions, with a strong presence in North America, Europe, and Asia-Pacific. The company serves a diverse range of clients, from small and medium-sized businesses to large enterprises and government agencies.

Company Culture

CDW is renowned for its commitment to customer satisfaction and employee excellence. The company's core values include:

• Customer Mania: Always putting the customer first
• Collaboration: Working together to achieve success
• Integrity: Conducting business ethically and transparently
• Results: Exceeding expectations and delivering value
• Growth: Continuously improving and innovating

Financial Performance

CDW is a publicly traded company listed on the NASDAQ stock exchange. The company has consistently delivered strong financial performance, with revenue exceeding $20 billion in fiscal year 2023. CDW's growth has been driven by a combination of organic expansion and strategic acquisitions.

Expansion and Innovation

CDW is committed to expanding its global reach and enhancing its solution offerings. The company has recently made significant investments in cloud computing, cyber security, and the Internet of Things (IoT). CDW is also actively acquiring companies to bolster its capabilities and expand its customer base.

Conclusion

CDW Corporation is a leading global IT solutions provider that offers a comprehensive range of products, services, and consulting expertise. With a strong market presence, a commitment to customer satisfaction, and a focus on innovation, CDW is well-positioned to continue driving growth and delivering value to its clients in the years to come.

Business Model of CDW Corporation

CDW Corporation is a leading provider of technology products and services to businesses, governments, and educational institutions in the United States, Canada, and the United Kingdom.

Model Overview:

• Product Sales: CDW offers a wide range of hardware, software, networking, and storage products from top vendors such as Dell, Cisco, HP, and Microsoft.
• Solutions and Services: CDW provides end-to-end technology solutions, including consulting, design, implementation, and ongoing support.
• Cloud and Subscription Services: CDW offers cloud computing services, software as a service (SaaS), and subscription-based hardware and services.
• Managed Services: CDW provides managed services, such as network monitoring, security, and data backup.

Advantages to Competitors:

1. Comprehensive Product and Service Offering: CDW's extensive product and service portfolio allows it to meet the diverse needs of its customers.

2. Strong Vendor Relationships: CDW has established strong relationships with major technology vendors, which gives it preferential pricing and access to the latest products and solutions.

3. Expertise and Industry Knowledge: CDW employs a team of highly skilled and experienced professionals who provide expert advice and support to customers.

4. Multi-Channel Distribution: CDW operates through a combination of online, phone, and field sales channels, providing flexibility and convenience to customers.

5. Customer Focus: CDW is committed to delivering exceptional customer service through personalized account managers and dedicated support teams.

6. Scale and Infrastructure: As a large and well-established company, CDW has the infrastructure and resources to handle complex projects and fulfill large orders efficiently.

7. Financial Strength: CDW's strong financial performance and investment in its business provide stability and allow for ongoing growth and innovation.

8. Geographic Expansion: CDW's presence in Canada and the United Kingdom has allowed it to expand into new markets and provide global support to its customers.

9. Sustainability Focus: CDW is dedicated to sustainability and has implemented initiatives to reduce its environmental impact and promote responsible business practices.

Company Name: CDW Corporation

Industry: Information Technology

Headquarters: Vernon Hills, Illinois, United States

Website: www.cdw.com

Outlook

Financial Performance

• Strong financial performance in recent years, with revenue and earnings growth.
• Revenue expected to continue growing in the coming years, driven by increased adoption of cloud computing, data center modernization, and cybersecurity solutions.
• Earnings per share (EPS) is projected to grow in line with revenue growth.

Market Position

• Leading provider of IT products and services in North America.
• Broad portfolio of offerings, including hardware, software, networking solutions, cloud services, and managed services.
• Strong customer base of businesses, governments, and educational institutions.

Competitive Landscape

• Competes with other IT solution providers such as Dell Technologies, Hewlett Packard Enterprise (HPE), and IBM.
• Focuses on differentiating itself through its broad product offering, customer service, and technical expertise.
• Acquiring smaller companies to expand its reach and capabilities.

Technology Trends

• Well-positioned to benefit from the growth of cloud computing and data center modernization initiatives.
• Expanding its cloud services offerings through partnerships with Amazon Web Services (AWS) and Microsoft Azure.
• Investing in artificial intelligence (AI) and machine learning (ML) to enhance its solutions.

Growth Strategies

• Expanding its product portfolio through strategic acquisitions and partnerships.
• Increasing investment in cloud services and managed services.
• Targeting new markets, such as healthcare and manufacturing.
• Enhancing its customer experience through digital initiatives.

Sustainability

• Committed to environmental sustainability, with a focus on energy efficiency and waste reduction.
• Setting science-based targets to reduce its carbon footprint.
• Promoting responsible sourcing and ethical manufacturing practices.

Valuation

• Traded publicly on the Nasdaq Global Select Market (ticker: CDW).
• Market cap of approximately $20 billion as of August 2023.
• Price-to-earnings (P/E) ratio in line with industry peers.

Overall Outlook

• Positive outlook for continued growth and profitability.
• Well-positioned to capitalize on the evolving IT landscape and customer demand for comprehensive solutions.
• Facing competition from larger players, but mitigating it through its differentiated offerings and strong customer relationships.
• Strong financial performance and a commitment to sustainability make it an attractive investment opportunity.

Similar Companies to CDW Corporation

1. Dell

• Homepage
• Reason: Dell provides a wide range of IT solutions and services, including hardware, software, and support, similar to CDW. It is known for its high-quality products and excellent customer service.

2. HP

• Homepage
• Reason: HP is a global leader in the tech industry, offering hardware, software, and services for businesses and consumers. Customers appreciate its innovative products and comprehensive IT solutions.

3. Lenovo

• Homepage
• Reason: Lenovo specializes in PCs, laptops, and other hardware devices. It is known for its affordable and reliable products, making it a popular choice for businesses on a budget.

4. Insight Enterprises

• Homepage
• Reason: Insight Enterprises is a leading provider of IT hardware, software, and services. Customers trust its expertise in cloud computing, cybersecurity, and data center solutions.

5. Tech Data

• Homepage
• Reason: Tech Data is a global IT distributor that provides a wide range of products and services to resellers and end users. It is known for its strong supply chain and efficient logistics.

6. Ingram Micro

• Homepage
• Reason: Ingram Micro is another major IT distributor that offers a vast selection of hardware, software, and cloud solutions. Customers appreciate its extensive distribution network and value-added services.

7. Arrow Electronics

• Homepage
• Reason: Arrow Electronics is a leading supplier of semiconductors, electronic components, and enterprise computing solutions. It is known for its technical expertise and strong relationships with manufacturers.

8. Avnet

• Homepage
• Reason: Avnet is a global technology distributor that provides a broad range of IT products and services. Customers value its commitment to innovation and its extensive supply chain capabilities.

Foundation and Early Growth (1984-1991)

• 1984: Michael Krasny and John Matthews founded Computer Discount Warehouse (CDW) in Vernon Hills, Illinois, to sell computer hardware, software, and peripherals at discounted prices.
• 1985: Opened its first retail store outside of Chicago.
• 1988: Expanded into business-to-business sales.
• 1991: Initial public offering (IPO) raised $33.3 million.

Diversification and Acquisitions (1992-2010)

• 1992: Acquired Connect, a value-added reseller of computer networking products.
• 1994: Expanded into the datacenter and storage market with its acquisition of Insyte.
• 1996: Acquired Digital Express Distributing, Canada's leading computer distribution company.
• 1998: Entered the telecommunications market through its acquisition of Core Network Technologies.
• 2001: Acquired Insight, a leading provider of technology solutions to businesses and government agencies.

Continued Growth and Focus on Solutions (2011-Present)

• 2011: Acquired Comstor, a global provider of telecom and communications products.
• 2012: Launched its Government Division to focus on serving the needs of federal, state, and local government agencies.
• 2014: Acquired Advanced Technology Systems, a provider of cloud and managed services.
• 2015: Rebranded as CDW Corporation to reflect its expanded portfolio of solutions.
• 2019: Acquired HEI, a leading provider of healthcare technology solutions.
• 2020: Completed the largest technology acquisition in its history by acquiring Sirius Computer Solutions, a leading provider of IT solutions and services.

Key Milestones

• Over 4,000 employees in North America and Europe.
• Annual revenue of over $20 billion.
• Consistently recognized as one of the largest technology solutions providers in the world.
• Fortune 500 company since 2002.

2020

• March 2020: CDW announces its acquisition of Sirius Computer Solutions, a leading provider of managed IT services.
• April 2020: CDW releases its first quarter financial results, showing a 10.8% increase in revenue year-over-year.
• October 2020: CDW announces its acquisition of AbleNet, a provider of assistive technology and special needs equipment.

2021

• February 2021: CDW releases its fourth quarter and full-year financial results for 2020, showing a 12.6% increase in revenue and a 20% increase in net income.
• April 2021: CDW announces its acquisition of StackPointCloud, a provider of multi-cloud managed services.
• November 2021: CDW announces its acquisition of Stratascale, a provider of cloud and managed services.

2022

• February 2022: CDW releases its fourth quarter and full-year financial results for 2021, showing a 14.7% increase in revenue and a 28.5% increase in net income.
• May 2022: CDW announces its acquisition of Atos North America, a provider of managed services, cloud solutions, and cybersecurity.
• November 2022: CDW announces its partnership with Google Cloud to offer cloud migration and managed services to customers.

Recent Timelines

• December 2022: CDW announces a partnership with Microsoft to offer Microsoft Azure cloud services to customers.
• January 2023: CDW releases its first quarter financial results for 2022, showing a 12.8% increase in revenue year-over-year.
• February 2023: CDW announces its acquisition of Logicalis, a global provider of digital transformation and managed services.

Exceptional IT Solutions with CDW Corporation

As a satisfied customer of CDW Corporation, I highly recommend their unparalleled services to any organization seeking comprehensive IT solutions. My recent experience with CDW has been nothing short of exceptional.

Unmatched Expertise and Customer Support

From the moment I contacted CDW, I was impressed by their team's exceptional knowledge and unwavering support. They took the time to thoroughly understand my business needs and provided tailored recommendations that exceeded my expectations. Their prompt and efficient responses to inquiries ensured that our project stayed on track.

Comprehensive Product Portfolio

CDW's extensive product portfolio caters to the diverse IT requirements of businesses of all sizes. From hardware and software to networking and security solutions, they provide a one-stop hub for all our IT requirements. The competitive pricing and flexible financing options made it easy for us to acquire the solutions we needed without breaking the bank.

Seamless Deployment and Integration

The CDW team played an integral role in the seamless deployment and integration of our new IT infrastructure. Their skilled engineers ensured a smooth transition with minimal disruption to our operations. They provided valuable guidance and training, empowering our employees to leverage the new solutions effectively.

Ongoing Support and Maintenance

CDW's commitment extends beyond the initial implementation. Their comprehensive support and maintenance packages provide peace of mind and ensure that our IT infrastructure operates at peak performance. They proactively monitor our systems, promptly respond to any issues, and provide ongoing upgrades to keep our technology up-to-date.

Positive Impact on Business Operations

The CDW solutions have significantly enhanced our business operations. Improved productivity, increased efficiency, and enhanced security measures have enabled us to achieve our strategic objectives and gain a competitive advantage. The investment in CDW's services has proven to be a wise one that has delivered substantial returns.

Conclusion

I highly endorse CDW Corporation as a reliable and highly effective IT partner. Their exceptional expertise, comprehensive product portfolio, seamless deployment, ongoing support, and positive impact on our business operations make them an invaluable asset to any organization seeking to transform their IT infrastructure. I extend my sincere gratitude to the entire CDW team for their unwavering dedication and the exceptional results they have delivered.

Unleash the Power of IT with CDW Corporation: Your Trusted Technology Solution Provider

In today's digital era, businesses rely heavily on technology to drive innovation, productivity, and efficiency. That's where CDW Corporation comes in—as your trusted partner in all things IT solutions.

Comprehensive Product Portfolio

CDW Corporation offers an extensive catalog of technology products and services to meet the diverse needs of businesses across industries. From hardware to software, cloud computing to security, we have everything you need to empower your organization. Our expert procurement team ensures competitive pricing and timely delivery.

Expert Solutions and Services

Beyond providing products, we offer a full suite of managed solutions and professional services. Our team of certified engineers can design, implement, and maintain your IT infrastructure, freeing up your resources to focus on your core business objectives. We also provide consulting, training, and support to maximize the value of your technology investments.

Customer-Centric Approach

At CDW Corporation, we believe in putting our customers first. Our dedicated account managers provide personalized service to understand your unique business requirements and tailor solutions that align with your goals. We offer flexible payment options, financing, and leasing programs to meet your budget constraints.

Industry-Leading Expertise

For over 40 years, CDW Corporation has been at the forefront of technology advancements. Our team consists of industry veterans with deep expertise in various fields, including cloud, cybersecurity, data center, and more. This knowledge enables us to provide valuable insights and recommendations to help you navigate the ever-changing IT landscape.

Trusted by Fortune 500 Companies

Numerous Fortune 500 companies trust CDW Corporation for their IT solutions. Our proven track record of successful deployments and ongoing support has earned us the reputation as a reliable and innovative partner.

Make CDW Corporation Your IT Solution Provider

Partnering with CDW Corporation is like having a dedicated technology team at your fingertips. We are committed to providing exceptional customer service, tailored solutions, and cutting-edge products.

Visit our website at www.cdw.com to explore our comprehensive offerings and discover how we can help your business thrive in the digital age.

Unlock the full potential of your IT infrastructure with CDW Corporation—your trusted technology solution provider.

Main Suppliers of CDW Corporation

CDW Corporation, a leading provider of technology solutions, partners with numerous suppliers to meet the diverse needs of its customers. Here are some of the key suppliers that provide a significant portion of CDW's product and service offerings:

1. Cisco Systems

• Website: https://www.cisco.com/c/en/us/index.html
• Products: Networking hardware, software, and services
• Cisco is a global leader in the networking industry, providing a wide range of products and solutions for businesses of all sizes. CDW relies on Cisco for its expertise in networking infrastructure, security, and collaboration technologies.

2. Dell Technologies

• Website: https://www.delltechnologies.com/
• Products: Servers, storage, networking, PCs, and software
• Dell Technologies is a multinational technology company that offers a comprehensive portfolio of hardware and software products. CDW collaborates with Dell to provide customers with reliable and scalable IT solutions.

3. Hewlett Packard Enterprise (HPE)

• Website: https://www.hpe.com/us/en/index.html
• Products: Servers, storage, networking, and software
• HPE is a leading provider of enterprise-grade hardware and software solutions. CDW leverages HPE's expertise in data center infrastructure, hybrid cloud, and artificial intelligence to deliver tailored technology solutions.

4. Lenovo

• Website: https://www.lenovo.com/us/en/
• Products: PCs, laptops, servers, and storage
• Lenovo is a global technology company known for its innovative and reliable devices. CDW partners with Lenovo to offer a wide range of personal computing and server solutions to meet customer needs.

5. Microsoft

• Website: https://www.microsoft.com/en-us/
• Products: Operating systems, software applications, and cloud services
• Microsoft is a leading provider of software and cloud solutions. CDW collaborates with Microsoft to deliver a comprehensive suite of productivity and cloud-based technologies to its customers.

6. VMware

• Website: https://www.vmware.com/
• Products: Virtualization and cloud management software
• VMware is a leading provider of virtualization solutions that enable businesses to maximize the efficiency and flexibility of their IT infrastructure. CDW leverages VMware's expertise to deliver virtualization, cloud, and software-defined networking solutions to customers.

7. Amazon Web Services (AWS)

• Website: https://aws.amazon.com/
• Products: Cloud computing services
• AWS is a leading provider of public cloud services, offering a wide range of infrastructure, platform, and application services. CDW partners with AWS to provide customers with scalable, cost-efficient cloud solutions.

8. Google Cloud

• Website: https://cloud.google.com/
• Products: Cloud computing services
• Google Cloud is a leading provider of public cloud services, offering a wide range of infrastructure, platform, and application services. CDW collaborates with Google Cloud to provide customers with innovative and secure cloud solutions.

9. Ingram Micro

• Website: https://www.ingrammicro.com/
• Products: Distribution services for IT products and solutions
• Ingram Micro is a global distributor of IT products and services. CDW works with Ingram Micro to ensure timely delivery of hardware and software products to customers worldwide.

10. Tech Data

• Website: https://www.techdata.com/en-us/
• Products: Distribution services for IT products and solutions
• Tech Data is a leading distributor of IT products and services. CDW relies on Tech Data for its extensive product portfolio and value-added services, such as logistics, technical support, and financing.

CDW Corporation's Main Customers (Downstream Companies)

CDW Corporation, a leading provider of technology products and services, has a diverse customer base across various industries and organizations. Its main customers include:

1. Government Agencies:

   • Federal, state, and local government agencies
   • Educational institutions (K-12 and higher education)
   • Healthcare organizations

2. Businesses:

   • Small and medium-sized businesses (SMBs)
   • Enterprises
   • Fortune 500 companies
   • Nonprofit organizations

3. Healthcare Providers:

   • Hospitals and clinics
   • Medical practices
   • Pharmaceutical companies

4. Education Institutions:

   • Schools and districts (K-12)
   • Colleges and universities
   • Research institutions

5. Financial Services:

   • Banks and credit unions
   • Investment firms
   • Insurance companies

Example Customers (with Websites):

• Government Agencies:

  • City of Phoenix, Arizona: https://www.phoenix.gov/
  • California State University: https://www.calstate.edu/

• Businesses:

  • Microsoft: https://www.microsoft.com/
  • Cisco Systems: https://www.cisco.com/
  • GE Healthcare: https://www.gehealthcare.com/

• Healthcare Providers:

  • Kaiser Permanente: https://www.kp.org/
  • Mayo Clinic: https://www.mayoclinic.org/
  • St. Jude Children's Research Hospital: https://www.stjude.org/

• Education Institutions:

  • University of California, Berkeley: https://www.berkeley.edu/
  • KIPP New Orleans Schools: https://enroll.kippneworleans.org/
  • Texas A&M University: https://www.tamu.edu/

• Financial Services:

  • Bank of America: https://www.bankofamerica.com/
  • JP Morgan Chase: https://www.jpmorganchase.com/
  • Fidelity Investments: https://www.fidelity.com/

Key Revenue Streams of CDW Corporation

CDW Corporation (NASDAQ: CDW) is a leading provider of information technology (IT) solutions and services to businesses, government, education, and healthcare organizations in the United States, Canada, and the United Kingdom. The company's key revenue streams include:

1. Product Sales (81.2% of total revenue in 2022)

• Hardware: Servers, storage systems, networking equipment, personal computers, laptops, tablets, and other hardware devices.
• Software: Operating systems, applications, security software, and other software solutions.
• Peripherals: Printers, scanners, copiers, monitors, keyboards, mice, and other peripheral devices.

2. Services (18.8% of total revenue in 2022)

• Managed Services: Remote monitoring, maintenance, and management of IT infrastructure and applications.
• Professional Services: Consulting, implementation, integration, and training services for IT solutions.
• Cloud Services: Hosting, storage, and other cloud-based services.
• Maintenance and Support: Break-fix services, warranties, and extended support contracts.

Estimated Annual Revenue

CDW's annual revenue has steadily increased over the past several years, driven by strong demand for IT products and services. In 2022, the company reported total revenue of $26.5 billion, up from $23.7 billion in 2021.

Breakdown of Revenue by Segment

CDW operates through three segments:

• Corporate: Serves businesses and government agencies in the United States.
• Public: Serves education and healthcare organizations in the United States.
• International: Serves businesses and organizations in Canada and the United Kingdom.

The Corporate segment is the company's largest, accounting for approximately 60% of total revenue. The Public segment contributes around 30% of revenue, while the International segment makes up the remaining 10%.

Growth Drivers

CDW's continued growth is expected to be driven by several factors, including:

• Increased adoption of cloud computing and other advanced technologies
• Growing demand for cybersecurity solutions
• Expansion into new markets and customer segments
• Acquisitions and partnerships with other IT companies

Key Partners of CDW Corporation:

1. Microsoft

• Website: https://www.microsoft.com/
• Description: A global technology company that develops and sells software, hardware, and services. CDW is a Microsoft Cloud Solution Provider (CSP) and offers a wide range of Microsoft products and services to its customers.

2. Cisco

• Website: https://www.cisco.com/
• Description: A multinational technology conglomerate that develops and sells networking, security, and collaboration solutions. CDW is a Cisco Premier Partner and offers a comprehensive portfolio of Cisco products and services to its customers.

3. HP

• Website: https://www.hp.com/
• Description: A global information technology company that manufactures and sells computers, printers, and other hardware devices. CDW is an HP Platinum Partner and offers a full range of HP products and services to its customers.

4. Dell

• Website: https://www.dell.com/
• Description: A multinational technology company that manufactures and sells computers, servers, storage devices, and other hardware products. CDW is a Dell Authorized Reseller and offers a comprehensive selection of Dell products and services to its customers.

5. Lenovo

• Website: https://www.lenovo.com/
• Description: A multinational technology company that manufactures and sells computers, tablets, smartphones, and other hardware devices. CDW is a Lenovo Gold Partner and offers a wide range of Lenovo products and services to its customers.

6. Amazon Web Services (AWS)

• Website: https://aws.amazon.com/
• Description: A cloud computing platform that offers a variety of services, including computing, storage, networking, and analytics. CDW is an AWS Advanced Consulting Partner and helps customers design, implement, and manage their AWS solutions.

7. Google Cloud

• Website: https://cloud.google.com/
• Description: A cloud computing platform that offers a variety of services, including computing, storage, networking, and machine learning. CDW is a Google Cloud Premier Partner and helps customers design, implement, and manage their Google Cloud solutions.

8. IBM

• Website: https://www.ibm.com/
• Description: A global technology company that offers a wide range of products and services, including hardware, software, and consulting. CDW is an IBM Premier Business Partner and offers a portfolio of IBM products and services to its customers.

9. VMware

• Website: https://www.vmware.com/
• Description: A software company that develops and sells virtualization software and cloud computing solutions. CDW is a VMware Enterprise Partner and offers a comprehensive range of VMware products and services to its customers.

10. Oracle

• Website: https://www.oracle.com/
• Description: A multinational technology company that develops and sells database software, enterprise software, and cloud computing solutions. CDW is an Oracle Platinum Partner and offers a full suite of Oracle products and services to its customers.

Key Cost Structure of CDW Corporation

CDW Corporation is a leading provider of technology products and services to businesses, government, and education organizations in the United States, Canada, and the United Kingdom. The company's key cost structure includes the following:

Cost of Goods Sold (COGS)

COGS is the largest expense for CDW Corporation, accounting for approximately 80% of total operating expenses. COGS includes the cost of acquiring the products that the company sells, such as computers, servers, storage devices, networking equipment, and software. CDW Corporation purchases these products from a variety of vendors, including manufacturers, distributors, and resellers.

The estimated annual cost of COGS for CDW Corporation is approximately $22 billion.

Selling, General, and Administrative (SG&A) Expenses

SG&A expenses include the costs of marketing and selling the company's products and services, as well as the costs of general and administrative operations. SG&A expenses account for approximately 15% of total operating expenses.

The estimated annual cost of SG&A expenses for CDW Corporation is approximately $4 billion.

Research and Development (R&D) Expenses

R&D expenses include the costs of developing new products and services, as well as the costs of improving existing products and services. R&D expenses account for approximately 5% of total operating expenses.

The estimated annual cost of R&D expenses for CDW Corporation is approximately $1 billion.

Other Expenses

Other expenses include the costs of depreciation and amortization, interest expense, and other miscellaneous expenses. Other expenses account for approximately 1% of total operating expenses.

The estimated annual cost of other expenses for CDW Corporation is approximately $200 million.

Total Operating Expenses

Total operating expenses for CDW Corporation are approximately $27 billion per year.

Cost of Revenue

Cost of revenue is the sum of COGS and SG&A expenses. Cost of revenue is approximately 95% of total operating expenses.

The estimated annual cost of revenue for CDW Corporation is approximately $26 billion.

Gross Profit

Gross profit is the difference between revenue and cost of revenue. Gross profit is approximately 5% of total operating expenses.

The estimated annual gross profit for CDW Corporation is approximately $1 billion.

Sales Channels of CDW Corporation

CDW Corporation is a leading provider of technology products and services to business, government, and education customers in the United States, Canada, and the United Kingdom. The company sells its products and services through a variety of channels, including:

• Direct sales: CDW sells directly to customers through its sales force, which consists of over 1,000 sales representatives. The company's sales force is organized into vertical markets, such as healthcare, education, and government, and is able to provide customers with tailored solutions to meet their specific needs.
• Indirect sales: CDW sells indirectly to customers through a network of resellers, including value-added resellers (VARs), systems integrators, and managed service providers. These resellers provide CDW with access to a wider customer base and can help the company to reach customers who are not aware of CDW or who do not have the resources to purchase directly from the company.
• E-commerce: CDW sells products and services through its website, which offers a wide variety of products from over 1,000 vendors. The company's website is easy to use and allows customers to quickly and easily find the products and services they need.
• Catalog sales: CDW sells products and services through its print catalogs, which are mailed to customers on a regular basis. The company's catalogs offer a wide variety of products from over 1,000 vendors and are a convenient way for customers to browse CDW's offerings.

Estimated Annual Sales

CDW Corporation's estimated annual sales for the fiscal year ending December 31, 2023 are $20.0 billion. The company's sales have been growing steadily in recent years, driven by increased demand for technology products and services from businesses, governments, and educational institutions.

The following table shows CDW Corporation's estimated annual sales by sales channel for the fiscal year ending December 31, 2023:

| Sales Channel | Estimated Annual Sales | |---|---| | Direct sales | $12.0 billion | | Indirect sales | $6.0 billion | | E-commerce | $1.5 billion | | Catalog sales | $0.5 billion |

Total | $20.0 billion

Customer Segments of CDW Corporation

CDW Corporation divides its customer base into three primary segments:

1. Corporate: Consists of large and medium-sized businesses, as well as government agencies. Corporate customers represent the largest segment of CDW's business, accounting for approximately 75% of annual sales.

2. Small and Medium Business (SMB): Comprises small and mid-sized businesses that typically have fewer than 1,000 employees. SMB customers represent approximately 15% of CDW's annual sales.

3. Consumer: Includes individual consumers who purchase technology products for personal use. Consumer customers account for approximately 10% of CDW's annual sales.

Estimated Annual Sales

According to CDW Corporation's fiscal 2022 financial report, the company generated total annual sales of $26.9 billion. Based on the following estimated breakdown by customer segment:

1. Corporate: $20.2 billion
2. SMB: $4.0 billion
3. Consumer: $2.7 billion

Additional Details

Within each customer segment, CDW targets specific subsegments based on industry, size, and technology needs. For instance:

• Corporate: Healthcare, manufacturing, finance, education
• SMB: Professional services, retail, hospitality
• Consumer: Students, home office users, gamers

CDW leverages its extensive product portfolio, technical expertise, and value-added services to cater to the unique requirements of each customer segment. The company also employs a differentiated distribution model, offering both direct sales and channel partnerships.

CDW Corporation Value Proposition

Target Audience:

• Business and government organizations
• Healthcare providers
• Educational institutions

Core Value Proposition:

• End-to-end IT solutions: CDW provides a comprehensive portfolio of hardware, software, cloud services, and managed services, enabling customers to build, deploy, and manage their IT infrastructure seamlessly.
• Expert advice and support: CDW's team of certified engineers and solutions architects assist customers in selecting the right technologies and solutions for their specific needs, providing ongoing support throughout the lifecycle of their IT investments.
• Personalized customer experience: CDW emphasizes personalized customer service, tailoring solutions to meet individual business objectives and providing dedicated account managers to ensure customer satisfaction.
• Competitive pricing and financing options: CDW leverages its scale and strong relationships with vendors to offer competitive pricing and flexible financing options, helping customers optimize their IT budgets.
• Sustainability and Corporate Responsibility: CDW is committed to environmental sustainability and ethical business practices, implementing programs to reduce its environmental impact and support diverse suppliers.

Value Proposition for Specific Customer Segments:

Businesses and Government Organizations:

• Streamlined procurement process with access to a vast catalog of IT products and services.
• Expertise in designing and implementing complex IT solutions, including cloud migration, data center upgrades, and security enhancements.
• Flexible financing options and ongoing management services to optimize IT infrastructure costs and performance.

Healthcare Providers:

• Compliance-focused solutions designed to meet the specific IT needs of healthcare organizations, including HIPAA compliance and secure data management.
• Partnerships with leading healthcare technology vendors, providing access to specialized products and services.
• Expertise in integrating medical devices and electronic health records (EHRs) into IT infrastructure.

Educational Institutions:

• Affordable and accessible IT solutions tailored to the needs of educational institutions, including hardware, software, and cloud services.
• Expert advice on educational technology trends and best practices.
• Ongoing support and professional development services to enhance student learning and faculty productivity.

Key Differentiators:

• Comprehensive portfolio of IT solutions and services
• Certified engineers and solutions architects
• Personalized customer experience
• Competitive pricing and financing options
• Commitment to sustainability and ethical business practices

CDW Corporation Risk Analysis

Company Overview

CDW Corporation (NASDAQ: CDW) is a leading provider of technology products and services to business, government, education, and healthcare organizations. Headquartered in Lincolnshire, Illinois, CDW operates in the United States, the United Kingdom, and Canada.

Risk Assessment

Credit Risk

• High dependence on a few large customers: CDW's top 10 customers accounted for approximately 20% of its total revenue in 2022. Loss of any of these customers could significantly impact the company's financial performance.
• Concentration in key industry verticals: CDW's business is primarily concentrated in the technology and healthcare sectors. A downturn in either of these sectors could negatively affect the company's revenue.
• Competition from large technology vendors: CDW competes with large technology vendors such as Dell Technologies, HP Inc., and Lenovo. These vendors have greater scale and resources, which could make it difficult for CDW to differentiate itself and maintain market share.

Operational Risk

• Supply chain disruptions: CDW relies on a global supply chain to procure and deliver products to its customers. Disruptions in the supply chain, such as those caused by natural disasters, geopolitical events, or transportation issues, could impact the company's ability to fulfill orders.
• Cybersecurity threats: As a technology provider, CDW is exposed to cybersecurity risks. A cyberattack on the company's systems could result in data breaches, reputational damage, and financial losses.
• Human capital risks: CDW's success depends on the expertise and commitment of its employees. Losing key employees or failing to attract and retain qualified talent could hinder the company's operations.

Financial Risk

• High leverage: CDW has a high level of debt relative to equity, which increases its financial risk. Rising interest rates could increase the company's interest expenses and negatively impact its profitability.
• Dependence on cash flow: CDW's operations are heavily dependent on cash flow. Changes in the company's cash flow could affect its ability to meet its financial obligations and invest in growth.
• Currency fluctuations: CDW's operations in the United Kingdom and Canada expose it to currency fluctuations. Adverse movements in foreign currencies could impact the company's financial results.

Mitigation Strategies

CDW has implemented various measures to mitigate its risks, including:

• Diversifying its customer base and industry exposure
• Maintaining strong relationships with key suppliers
• Investing in cybersecurity measures
• Providing competitive employee benefits and development opportunities
• Managing its debt levels and cash flow carefully
• Monitoring currency fluctuations and hedging against foreign exchange risk

Conclusion

CDW Corporation faces a range of risks that could impact its financial performance and business operations. However, the company has implemented measures to mitigate these risks and maintain its position as a leading technology provider. Investors should carefully consider the risks associated with CDW before making investment decisions.