DCS: Why the decision to buy Bell Microproducts (ie want to be taken more seriously in the data centre space)?

RV: Value-creating acquisitions are part of Avnet’s growth strategy and specifically the acquisition of Bell Microproducts has the potential to strengthen Avnet’s position in the Americas and Europe.

Bell Micro’s product line and technical expertise will increase Avnet’s value-added solutions for the data centre and embedded computing markets.

It also adds many talented employees to the company.

Bell Micro’s geographic footprint also increases Avnet’s presence in Latin America, as well as strengthen its operations in North America and EMEA.

Financially, the deal is expected to be immediately accretive to Avnet’s earnings per share, excluding integration and transaction costs, and achieves Avnet’s target return on capital employed goal of 12.5% post integration.

DCS: And what benefit will this acquisition bring to The Channel and/or end users?

RV: The acquisition of Bell Micro enables us to offer partners a broader range of technology in more places. After the acquisition is final, Avnet’s channel partners will have access to an expanded line card and services, and we will have more scale and scope to support them in new geographies, such as Latin America.

Avnet will also provide more capital to support the growth of Bell Micro’s trading partners.

DCS: What other developments has Avnet recently announced?

RV: Avnet has grown significantly in the last 3 years following a series of acquisitions. These acquisitions have enabled us to deliver support to resellers across all key areas of the technology spectrum in Europe e.g storage, document management, software, unified communications, networking and security and wireless and mobility. We already have an extensive portfolio but we will continue to review this on an ongoing basis for two reasons.

First, we will continue to grow our market share and geographic footprint with key suppliers and recent examples of this include the expansion of our Oracle agreement into Switzerland, expansion of Brocade into the Czech Republic, Hungary and Poland and the signing of a Pan European distribution agreement with LSI. Second, we are focused on balancing our technology portfolio by growing software and services which we’ve done recently through agreements with VMware, Oracle and Lanamark.

DCS: How would you position Avnet in the Channel – as a generalist or specialist?

RV: Avnet Technology Solutions is a global solutions distributor. The organization provides specialized offerings for a broad range of channel partners, including independent software vendors, embedded original equipment manufacturers, solutions providers, systems builders, systems integrators and value-added resellers (VARs). These partners in turn work with a wide range of end customers, from small- to mid-sized organizations to Fortune 1000 companies. Avnet supports enterprise technology and embedded computing suppliers that develop and market technologies, including servers, storage, software, networking, security, virtualization, unified communications and mobility products and services.

DCS: Is the ‘Jack of all trades/master of none’ tag one that Avnet risks attracting?

RV: Avnet Technology Solutions understands the evolutionary nature of the technology market and has mastered the ability to develop the specialized resources, tools and services needed to help its customers and suppliers take advantage of new opportunities. Avnet has proven expertise in helping its channel partners increase sales by providing market-specific channel sales support and services around the globe. Avnet works to identify technologies and markets with high growth potential in each region it serves. Avnet then invests in innovative programs and services designed to help its partners cost-effectively achieve their long-term business goals and develop market specialization. Solutions areas where Avnet provides specialized market expertise in EMEA, backed by world-class infrastructure support, include document management, mobility, networking, security, storage, unified communications and virtualization.

DCS: In other words, what distinguishes Avnet from others in the Channel?

RV: Avnet Technology Solutions has the greatest global reach within the solutions distribution industry and is continuing to invest in expanding its business globally. Avnet combines financial strength with the global scale and scope critical to fostering long-term customer and supplier growth, while enabling the local and regional resources needed to provide highly-consultative local market support. Avnet provides market-designed services and educational programs that remove the cost, risks and knowledge barriers that can inhibit VARs from expanding their businesses into new areas and markets.

DCS: And any fears that Avnet is just ‘too big’ to give all its customers sufficient service levels?

RV: Avnet Technology Solutions delivers value to its channel partners and suppliers through technical knowledge and industry-centric expertise so they can make the most of opportunities, solve business problems for their customers and accelerate their success. We have dedicated sales teams and a service-oriented culture to ensure we’re meeting our customers’ needs. At the same time, customers benefit from Avnet’s global scale and scope to effectively reach a wide range of markets across the globe. Because of our position in the market, Avnet can cost effectively and efficiently extend supplier programs and resources, such as customer training and sales support, into each market we serve.

DCS: Is the Bell Micro acquisition a sign that the Channel is going to have to compete more directly with OEMs when it comes to providing end user solutions?

RV: This is not our impression of the market. Suppliers are increasingly turning to Avnet Technology Solutions and its channel partners to reach customers in established and emerging markets. Avnet provides local supply chain visibility and management for channel partners through its global infrastructure.

DCS: How do you see the supply chain landscape changing over the next couple of years?

RV: Better than expected demand for IT products at Avnet Technology Solutions suggests that the current recovery in the technology supply chain is fuelled by strong demand and not just restocking. IT spending growth rates show the most promise in a range of technology and vertical industry solutions, such as virtualization, storage, security, networking, mobility, unified communications, healthcare and government. In addition, the recent shift during the past five years in how end-users procure technology—the shift from hardware and software purchases to buying technology benefits in the form of managed or cloud computing services—is forcing the channel to adopt new delivery methods that require dramatic business model changes.

DCS: What is the Avnet take on the following buzz topics, and in what ways can it help end users address them: Virtualisation, Cloud, Unified comms, SSDs and Data Centres overall?

RV: Being proactive in emerging technologies and solutions trends is an important element of the value we bring to our resellers. That doesn’t mean signing up every new niche vendor that appears in the market, rather it’s about increasing the flexibility of virtualised data centres, creating auto-billing and provisioning solutions, integrating unified communications platforms and assisting partners in offering cloud or OPEX based solutions to their customers.

On a daily basis we are designing and winning virtualised solutions and bringing newer techniques and technologies to market with partners through training, solution design and events. From a unified communications perspective Avnet was very early to market in developing a dedicated team which has seen double digit growth, year on year. We currently have engineers designing and testing leading edge solutions around solid state disks which are becoming one of the hottest topics in our storage business. And in the data centre space we have a leading vendor line up and one of the best partner channels in the market.

From our perspective these evolving technologies present great opportunities for resellers to address end users’ challenges around cost reduction, compliancy, business continuity, etc. However they encompass a broad range of products and services and as such it can be challenging for a reseller to gain the necessary skills and resources to become an expert in any one of these areas. With Avnet’s breadth of products and suppliers and technical skills we’re able to support resellers first in identifying the right solution and second in helping them to deliver that solution to the end user either through our own resources or by partnering them with another reseller.

DCS: And what are the customer pain points right now, in addition to those topics covered above?

RV: Today, end users are more sophisticated and seek integrated solutions to their business problems, opportunities, and needs. This requires VARs to develop new capabilities, including business acumen, industry expertise and strategic planning facilitation. Traditionally the domain of large system integrators and IT consulting firms, these highly valuable services and capabilities enable VARs to better understand their customers’ higher-level business problems, opportunities and needs—then design and implement solutions that satisfy them. In order to create differentiation, VARs need to shift towards creating and delivering these intellectual property-based solutions. These solutions are the hardest for competitors to copy and commoditize.

DCS: ‘As-a-service’ – is this a market that Avnet might play in some time in the near-ish future?

RV: “As-a-Service” is a term, like cloud, hosted, and outsourced services, that describes a range of services that are becoming increasingly important to the market. Avnet is developing solutions and services with partners in this market and I would expect to continue to see announcements coming from Avnet in the near future.

DCS: What other acquisitions/ technology/ geographical expansion can we expect from Avnet?

RV: Avnet will continue to leverage its strong balance sheet to make investments to support profitable growth and execute value-creating acquisitions. We have a healthy pipeline of opportunities that can help us reach our strategic growth goals both in terms of geographic and technology expansion. These activities enhance Avnet’s competitive position in the market and expand its global scale and scope, enabling the company to deliver additional benefits to its trading partners.

Avnet combines the financial strength plus global scale and scope critical for long-term customer and supplier growth, with the local and regional resources needed to provide highly-consultative local market support. Avnet understands the complexities and nuances of providing technology-based solutions in multiple countries and has the resources and services in place to help its customers and suppliers be successful internationally. We provide a single entry point that enables our channel partners to sell their technology-based solutions to the world. Our brand promise remains “accelerating your success”. 

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Tags: Storage Networking, Virtualization, Applications, Design & Facilities Management, Green Tech, Hosting & Colocation, Networks & Telco , Servers, Power & Cooling, Security

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