CDW 2014 Annual Report Download - page 9

Table of Contents
On July 2, 2013, Parent completed the IPO of its common stock. In connection with the IPO, CDW Holdings distributed all of its shares
of Parent's common stock to its members in June 2013 in accordance with the members' respective membership interests and was subsequently
dissolved in August 2013. See Note 9 to the accompanying audited consolidated financial statements included elsewhere in this report for
additional discussion of the IPO.
On November 10, 2014, we completed the acquisition of a 35% non-
controlling equity interest in Kelway TopCo Limited ("Kelway"), a
UK-based IT solutions provider, which has global supply chain relationships that enable it to conduct business in more than 100 countries. This
investment strengthens our ability to provide a more comprehensive solution to our customers and enhances our ability to serve our existing
multi-national customers.
Our Market
We operate in the U.S. and Canadian IT markets, which are large and growing markets. According to IDC, the overall U.S. IT market
generated approximately $675 billion in sales in 2014 . We believe our addressable market in the U.S. in the indirect sales channel represents
more than $215 billion in annual sales and for the year ended December 31, 2014 , our U.S. net sales of $11.5 billion represented approximately
5% of that highly diverse and fragmented market. According to IDC, the overall Canadian IT market generated more than $50 billion in sales in
2014 . We believe our addressable market in Canada in the indirect sales channel represents more than $11 billion in annual sales and for the
year ended December 31, 2014, our net sales of
$532 million in Canada represented approximately 5% of that market. We believe we have the
largest market share in our addressable market, with our 2014 net sales exceeding the cumulative North American net sales of our four largest
publicly traded sales channel competitors, based upon publicly available information for those companies. New technologies, including cloud,
virtualization and mobility, coupled with the resulting increase in demand for data as well as aging infrastructure, are increasingly requiring
businesses and institutions to seek integrated solutions to their IT needs. We expect this trend to continue for the foreseeable future, with end-
user demand for business efficiency and productivity driving future IT spending growth.
Our Offerings
Our offerings range from discrete hardware and software products and services to complex integrated solutions that include one or more
of these elements. We believe our customers increasingly view technology purchases as integrated solutions rather than discrete product and
service categories and we estimate t hat approximately 47% of our net sales in 2014 came from sales of product categories and services typically
associated with solutions. Our hardware products include notebooks/mobile devices (including tablets), network communications, enterprise and
data storage, video monitors, printers, desktop computers and servers. Our software products include application suites, security, virtualization,
operating systems, network management and Software as a Service (“SaaS”) offerings. We also provide a full suite of value-added-services,
which range from basic installation, warranty and repair services to custom configuration, data center and network implementation services, as
well as managed services that include Infrastructure as a Service (“IaaS”) offerings.
We also offer a variety of integrated solutions, such as:
• Mobility : We assist our customers with the selection, procurement and integration of mobile security software, hardware
devices such as smartphones, tablets and notebooks, and cellular wireless activation systems. We also provide mobile device
management applications with policy and security management capabilities across a variety of mobile operating systems and platforms.
• Security : We assess our customers' security needs and provide them with threat prevention tools in order to protect their
networks, servers and applications, such as anti-virus, anti-spam, content filtering, intrusion prevention, firewall and virtual private
network services, and network access control. We also design and implement data loss prevention solutions, using data monitoring and
encryption across a wide array of devices to ensure the security of customer information, personal employee information and research
and development data.
• Data Center Optimization : We help our customers evaluate their data centers for convergence and optimization
opportunities. Our data center optimization solutions consist of server virtualization, physical server consolidation, data storage
management and energy-efficient power and cooling systems.
• Cloud Computing : We provide our customers with a broad portfolio of cloud-based solutions, which are technology
delivered as a service. Our cloud offerings include: Infrastructure as a Service (IaaS), which delivers compute, networking, storage, and
data center capabilities via the cloud; Software as a Service (SaaS), which connects users to cloud-based software applications; and
Platform as a Service (PaaS), which enables development and ongoing maintenance of cloud-based solutions. We provide public cloud
solutions which reside off customer premises on a public (shared) infrastructure, and private cloud solutions, which reside on customer
premises. We also offer hybrid cloud solutions that deliver the benefits of both public and private solutions. Our migration, integration
and managed
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