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Stars
Cloud solutions & marketplaces
Cloud solutions & marketplaces: CDW moves serious volume across AWS (32% global IaaS share, 2024) and Azure (23%, 2024) and SaaS, with high attach rates on migration and optimization; public cloud services remain in high-growth territory. Breadth drives share despite working-capital intensity, and cross-sell payback offsets it. Keep investing in architects, FinOps, and automation to lock leadership.
Cybersecurity services & MSSP
Security spend is rising—global security and risk management spending reached about $200 billion in 2024— and CDW is already on many shortlists, with managed detection, zero trust, and incident response gaining traction across enterprise and public sector. Scaling requires talent and tooling dollars, but wins pull hardware and software along. Double down on SOC capacity and vendor-aligned playbooks to convert pipeline into revenue.
Managed services & XaaS
CDW wins on recurring revenue, sticky contracts and CFO-friendly cost profiles as the XaaS market expands. Device-as-a-service, network-as-a-service and lifecycle bundles reduce churn and extend contract duration. The XaaS market is projected to grow at roughly an 18% CAGR from 2024 to 2030, but scale requires upfront investment in platforms and SLAs. Higher margins and improved customer LTV justify the push.
Hybrid cloud & data center modernization
Customers are refactoring estates rather than abandoning on‑prem; Gartner projects public cloud spend of $591B in 2024, driving hybrid deployments that span hyperscale, colo and on‑prem. CDW’s integration muscle across hyperscale, colo and on‑prem turns large modernization projects—resource intensive—into multi‑year anchored revenue. Maintaining deep vendor certifications and reference architectures keeps CDW ahead.
- Gartner 2024: public cloud spend $591B
- Refactor, not rip‑and‑replace
- Integration across hyperscale, colo, on‑prem
- Large projects -> multi‑year spend
- Deep vendor certs & reference architectures
Public sector solutions (Gov/Ed/Healthcare)
CDW’s public sector business (Gov/Ed/Healthcare) is a Star: entrenched contract vehicles and steady-to-growing tech funding make security, devices, and cloud top priorities; sales cycles are complex but predictable, delivering scale economics and margin stability; focus investment on expanding contract vehicles and compliance expertise to defend and grow share.
- Contracts: GSA and multiple vehicle presence
- Priorities: security, devices, cloud
- Sales: complex, predictable, scale benefits
- Action: invest in vehicles & compliance
Drive recurring cloud & security growth: hire architects, SOC, FinOps, contract vehicles
CDW Stars: high-growth cloud, security and public-sector segments driving recurring, multi‑year revenue with strong attach rates and cross‑sell; public cloud spend $591B (Gartner 2024) and security spend ~$200B (2024) underpin demand; invest in architects, SOC capacity, FinOps and contract vehicles to convert pipeline into scale.
| Metric | 2024 |
|---|---|
| AWS share | 32% |
| Azure share | 23% |
| Public cloud spend | $591B |
| Security spend | $200B |
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Cash Cows
PCs, endpoints & accessories fulfillment
PCs, endpoints and accessories represent a high-share, mature segment for CDW supporting dependable volume; CDW reported fiscal 2024 revenue of $23.8 billion (FY ended July 31, 2024). Margins aren’t flashy, but scale plus vendor rebates and volume discounts generate strong cash conversion. Low incremental promotional spend is needed due to embedded enterprise accounts. Ongoing optimization of configuration centers is focused on squeezing further efficiency.
Enterprise software licensing & renewals
Enterprise software licensing and renewals from Microsoft (FY2024 revenue $211.91B) and Adobe (FY2024 revenue ~$19B), plus security suites, generate highly predictable cash with strong attach rates and modest growth; CDW captures recurring margin through disciplined renewals. Complexity and integration create switching costs that favor CDW, supporting retention and upsell. Automating quoting and enforcing renewal discipline protects margin and boosts lifetime value.
Procurement portals & catalog e-commerce
Customers rely on CDW’s procurement portals and catalog e-commerce for consistent buying workflows that are stable, sticky, and enable checkout upsell; CDW reported FY2024 revenue of $21.8 billion, underscoring scale. Low growth but high utilization drives excellent cash conversion, so keep UX clean and pricing tight — do not overbuild product complexity.
Configuration, imaging & deployment services
Configuration, imaging and deployment services tied to hardware orders deliver steady margins—industry figures in 2024 show typical services gross margins of 15–25%—turning device sell‑through into reliable cash flow. Processes are mature and scalable with low customer acquisition spend because value is operational rather than promotional. Targeted investment in robotics and SOP automation (2024 McKinsey data: automation can lift throughput 20–40% and reduce labor costs 15–25%) increases throughput and margin.
- Margin range: 15–25% (2024 industry data)
- Scalable: mature SOPs, low marketing needed
- Cash conversion: high due to hardware tie‑ins
- Automation ROI: +20–40% throughput, −15–25% labor (2024)
Vendor programs, rebates & distribution leverage
CDW’s scale (fiscal 2024 net sales $22.4 billion) unlocks outsized vendor rebates and co-marketing dollars that smaller rivals cannot match, preserving margin when end demand wobbles. These programs are cash-positive and low risk, and CDW enforces vendor scorecards and compliance like a hawk to protect rebate flows.
- Vendor rebates/co-marketing: scale advantage
- Resilience: steady cash amid demand swings
- Risk: cash-positive, low volatility
- Controls: strict scorecards & compliance
Endpoints & services drive cash; automation boosts throughput 20-40%
PCs/endpoints and services are CDW cash cows: FY2024 revenue $23.8B with service/hardware margins ~15–25%, strong cash conversion via vendor rebates; enterprise software renewals (Microsoft FY2024 $211.91B; Adobe FY2024 ~$19B) and sticky procurement portals deliver predictable recurring cash. Automation lifts throughput 20–40% and cuts labor 15–25%, boosting margins.
| Metric | Value (2024) |
|---|---|
| CDW revenue | $23.8B |
| Margins | 15–25% |
| MSFT revenue | $211.91B |
| Automation ROI | +20–40% throughput |
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Dogs
Standalone break-fix engagements
Standalone break-fix engagements tie up engineers for one-off, low-scope fixes that add little lifetime value; growth is flat, often 0–3% annually, with revenue lumpy and ticket sizes commonly under $1,000. Margins are thin, typically single digits to mid-teens (5–15%), while competition is local and price-driven. Bundle into recurring managed services or walk away to protect cash flow and resource ROI.
Commodity peripherals without attach
Commodity peripherals—cables, basic mice, no-services—are a pure race to the bottom with EU USB-C standardization enacted in 2024 accelerating price compression. Market saturation drives margin erosion and inventory risk, often forcing single-digit returns for pure commodity SKUs. Little differentiation means limited upside; prioritize bundling with higher-margin services or deprioritize standalone listings.
Legacy on‑prem maintenance with no roadmap
Legacy on‑prem maintenance with no roadmap sits in Dogs: customers are migrating, not expanding these estates, and renewals limp along, locking resources in low‑growth pools. CDW reported fiscal 2024 net sales of $22.9 billion, yet maintenance lines are cash neutral at best and carry high opportunity cost. Migrate or sunset to free capacity and pursue growth segments.
Single‑vendor niche hardware lines
Single-vendor niche hardware lines generate low volume and limited demand while carrying heavy enablement and support costs; market share is tiny and stagnant, and these SKUs distract sales teams from scalable, higher-margin solutions. Trim the catalog to reduce cost-to-serve and reallocate seller time to strategic brands and cloud/software plays.
- Low volume
- Limited demand
- High enablement cost
- Small, non-growing share
- Trim catalog, focus strategic brands
Custom one-off integration projects
Dogs:
Custom one-off integration projects
Bespoke builds soak up professional services time, rarely scale or repeat, and create high support overhead; they seldom convert to annuity revenue, pressuring margin. If specs drift, execution risk and cost sit with CDW; FY2024 revenue focus favored scalable offerings over one-offs.- Soak time: high
- Repeatability: low
- Support burden: high
- Annuity conversion: rare
- Action: standardize or decline
Sunset 0-3% break-fix lines; free capacity for higher-margin recurring services
Dogs: low-growth, low-margin assets tying up engineers and inventory; FY2024 CDW sales $22.9B but these lines show 0–3% growth and 5–15% margins. Bundle or sunset to free capacity; prioritize recurring services. Trim catalog and refuse bespoke one-offs without standardization.
| Category | Growth | Margin | Action | FY2024 impact |
|---|---|---|---|---|
| Break‑fix | 0–3% | 5–15% | Bundle/sunset | Low revenue, high cost |
Question Marks
AI/ML solutions & services
Demand for AI/ML solutions is exploding—IDC forecasted global AI spending at about 154 billion in 2024—yet market share is still forming and crowded. CDW can rapidly bundle GPUs, MLOps tooling and services (NVIDIA FY2024 revenue was 26.97 billion, reflecting hardware demand) to capture growth if it moves fast. High cash needs for talent (US ML engineer median ~160k in 2024) and labs create uncertain win rates. Invest selectively in repeatable, high-margin use cases.
Edge computing & IoT deployments
Retail, manufacturing and healthcare pilots are rising—Gartner estimates 75% of enterprise data will be created or processed outside traditional data centers by 2025—yet scale remains inconsistent across sites. CDW’s systems-integration capability is a competitive advantage if it can template repeatable offers and reduce deployment variance. Upfront costs are cash-heavy and outcomes vary by use case; IDC projects the broader edge market near $250 billion within the mid-2020s. Build vertical playbooks and proof packs to tip pilots into Star territory.
Private 5G & campus networking-as-a-service
Private 5G and campus networking-as-a-service sit in the Question Marks quadrant: a promising TAM as GSMA reported roughly 1.5 billion 5G connections by end-2024, but enterprise private deployments remain early-stage. CDW can pair spectrum partners with managed-services bundles to capture share, though sales cycles are technical and typically 12–24 months. Strategy: pursue lighthouse wins and codify reusable designs for scale.
Sustainability & circular IT services
Sustainability & circular IT services address rising e-waste — projected to reach 74 million tonnes by 2030 — while device takeback and carbon reporting gain traction but face nascent budgets; CDW’s logistics and services align with this motion, though returns are modest today; productizing reporting and bundling with DaaS can accelerate share and monetize reporting services.
- e-waste: 74 Mt by 2030
- device takeback: operational logistics fit CDW
- carbon reporting: market demand rising
- go-to-market: bundle reporting + DaaS
Cloud FinOps & cost optimization platforms
Enterprises seek lower cloud bills and Flexera 2024 found 32% of cloud spend is wasted, yet the FinOps tooling field runs into hundreds of vendors, creating noise; CDW’s advisory plus resale model can win but market share is not locked and requires IP and repeatable outcomes. Prioritize investments tied to multi-cloud estates and contract renewals to capture recurring value.
- FinOps waste: 32% (Flexera 2024)
- Market: hundreds of vendors
- CDW edge: advisory + resale
- Need: IP, measurable outcomes
- Invest: multi-cloud & renewals
Scale AI, private 5G & FinOps: $154B, 1.5B, 32%
Question Marks: AI/ML, private 5G, sustainability services and FinOps show high TAM but low share—AI spend ~$154B (2024) and NVIDIA FY2024 rev $26.97B signal demand; GSMA 1.5B 5G connections end-2024; FinOps waste 32% (Flexera 2024). CDW should tip pilots to scale via repeatable bundles, lighthouse wins and IP-led services.
| Segment | 2024 stat | Action |
|---|---|---|
| AI/ML | $154B spend | Bundle GPU+MLOps |
| Private 5G | 1.5B 5G | Lighthouse wins |
| FinOps | 32% waste | IP+advisory |