Avnet Inc. is a US$10 billion corporation with both an electronics components division as well as a distribution business for VARs and solution providers.
While a big player south of the border, its Partner Solutions unit, headed by Steve Tepedino, is dwarfed in Canada by Ingram Micro and Tech
Data. Tepedino hopes to change that. One step in that direction was the appointment last year of Gavin Miller, formerly of xWave, as the new Canadian vice-president.
We interviewed Tepedino from Avnet’s headquarters in Phoenix.
CDN: How many partners do you have in Canada?
Steve Tepedino: I don’t have an exact count. We run about 2,000 partners across the Americas, and by and large about 10 per cent of our Americas business comes from Canada.
CDN: Are you satisfied with the number of partners you have here?
S.T.: The number of partners are fine. We have some excellent partners. If I look across the country I’d like to expand our business . . . I like our business in the central part of the country, in Ontario. I’m pleased with how our partners are operating with us and our business performance. We’ve got some fine partners in Quebec around Montreal, and of course out West we have a handful of partners who do a super job for us.
CDN: In what areas would you like to expand?
S.T: All of our supply partners are asking us to help them penetrate the mid-market. So I’d like to expand in all regions of Canada our mid-market presence. There are so many companies that we just don’t have the opportunity to call on yet.
CDN: When are you going to build a warehouse in Canada?
S.T.: There are no plans because with our Channel Connection services where the inventory is and who owns it is less important, as opposed to information about packages and being able to hit customer commitments.
We think making our supply chain more transparent and more efficient is more important than having bigger warehouses.
CDN: A partners who I spoke to said he’d like to order more from you, but not having a warehouse here makes it longer to get some products.
S.T.: There are no doubt some areas we’d like to improve in. When it comes to industry-standard products, we’d like to have better availability and quicker lead times to our partners in Canada. Depending on location, from shipping to Western Canada I’m not sure a warehouse in Toronto is any closer than a warehouse in the southern U.S. So it’s really about looking at where our customers and the demand is and coming out with better resources to make sure we can improve our efficiency in the supply chain.
CDN: What do VARs have to do to be more profitable?
S.T.: Make sure they have a very clear focus on what they believe is core, know what they’re good at and stick with it, and look to their partners, like their distribution partners, to help with things their customers need but they may not be the best at providing.
CDN: You said demand will increase ‘ever so slightly'[in 2005]. There are a lot of partners who will shiver when they see those words.
ST: I don’t think that’s cause for concern, because overall demand is increasing at a slow rate. Our industry is maturing and that’s opening more opportunities for channel properties.
Look at HP’s most recent announcement for example. They’ve taken a large segment of their customer base and are asking the channel to play a much bigger role as they spend more time developing strong products and services and less of their time and expense driving the selling effort themselves.
. . . It’s a massive industry — in the trillions — and the channel right now is still a very small percentage of that business.