Value-added distributor, Avnet Technology Solutions and its partners are focusing efforts in pushing server virtualization technologies as the server business continues to slow down.
Sales were up two per cent to $2.62 billion in the fourth quarter of 2013 for Avnet, however Rick Hamada, CEO of Avnet, said in a conference call with analysts last week, that the company’s margins from technology solutions were down a quarter point from Q3 because of competitive pressures but sales of storage, software and services made up for the declines in server sales in Q4.
Operating income for Avnet’s technology solutions group rose 5.8 per cent to $73.3 million.
Server components makes up a smaller part of Avnet’s IT business, said Phillip Gallagher, president of technology solution for Avnet.
X86 server contracts in particular are “very competitive,” and that Avnet was finding it difficult to make a profit in the area, Gallagher said in a report appearing at the online technology publication ITJungle.com.
Gallagher said Avnet and its downstream partners are focusing on selling to existing clients, server virtualization and converged-systems.
“…we are actually up in proprietary servers,” he said. “So it is kind of interesting. But in general, total servers, we were down a bit.”
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