Six burning questions for Avnet’s leadership

SAN ANTONIO, TX – During this year’s annual Avnet Technology Solutions (ATS)(Nasdaq: AVT) IBM Partner Summit, (NYSE: IBM)executives from both companies revealed an ambitious financial plan to achieve $5 billion in IBM worldwide sales by the end of 2015.

At the conference yesterday, executives said for the first time ever, Avnet reached US$3 billion in annual IBM sales for the past fiscal year, which ended in July.

Now with new vertical market offerings around retail, banking and energy and a solutions-oriented go to market approach, Avnet is hoping to achieve $600 million in the last quarter of this year.

CDN had the opportunity to sit down with Jeff Bawol, president of ATS Americas, to discuss the company’s success so far and to also learn what’s been keeping the distributor busy these days.

Below is an edited transcript of the conversation.

CDN Now: How challenging was the business climate this year for ATS?

Jeff Bawol: We were focused this year on solutions practices and verticals. After my 100-day plan (in 2008), we decided to be aggressive at ATS as a solutions distributor. The reception by our partners for us going in this direction is huge and since this is an IBM conference, they’ve endorsed what we’re doing by offering us their time, talent and money. We’re celebrating 25 years of partnership with IBM so it was a natural fit to continue to invest together to make our partners more successful. We’ve also been busy with the acquisitions we’ve made. We acquired Bell (Microproducts) and Tallard (Technologies) this year and the Latin American and North American markets have been important for us. At that time, we had a small business in Mexico and today, we have a business that’s 10 times the size that we had before because of the acquisitions we made in the Latin America grouping. In North America, we also worked to create a single selling organization in the market place that represents our electronics marketing and technology solutions businesses.

CDN Now: What’s your plan on boosting business in the Canadian market?

J.B.: We’re still bullish on the Canadian market and business in general. When the economic recession hit, the banking environment in Canada wasn’t nearly as dramatic as it was in the U.S. and the housing decline wasn’t as substantial as it was in the U.S., so we saw more stability in that market. Solutions practices and solution verticals have also been important to Canadian partners with healthcare doing well and also government. Between our solution practices and verticals, we weathered the past year pretty decently. We think there are still lots of opportunities here.

CDN Now: What value does Avnet see in vertical market offerings and why’s this important for partners?

J.B.: As we’ve evolved to become a solutions distributor now, we’re convinced the end-user wants to have answers to their business problems. They don’t want to just buy products and point stuff. We want to help partners and suppliers sell more of their items by better preparing partners to have a business conversation with their customers. It’s about the how and the why questions instead of the what, which is the product. For instance, how do you sell into the government and why do you sell security into retail? It’s about getting to the root of the business problem and these questions scale across all partners, solutions and vertical markets. Once partners do this, I believe their businesses will increase.

CDN Now: What trends and emerging solution areas do you see as growing opportunities in the North American market space?

J.B.: Retail took a bit of a hit last year, but not technologically. It was affected in terms of the articles that were bought, but IT continued to flourish. Handheld devices are shaping how transactions work because picture retail associates being able to use a handheld device to check a customer out. This will help with customer traffic in the store and will improve overall customer satisfaction. The vertical market offerings we announced were no accident. We did our research and found where the opportunities and the money are for partners to take advantage of. These are big.

CDN Now: What are your plans for partners from an enablement and recruitment perspective?

J.B.: Partner enablement goes back to our universities and our internship offering in healthcare. Once partners go thru the universities, we can say here are some opportunities to use your new skills. We’ve improved our partner engagement and demand generation model to provide partners with more opportunities than they may have received in the past. On the recruitment side of things, we’re happy with what we have but of course, we’ll take any new customers that want to buy from us too. We believe in the saying, “less is more.” Our goal is to have deep relationships and business models with the suppliers we have and with our partners. We want our partners to be totally enabled so they can become trusted advisors to their customers. We can’t get that deep into each solution practice with thousands of partners, so we’d rather have a fewer number of highly trained partners than lots that are not trained at all. Our partner numbers in the Americas aren’t in the several thousands range, nor are they in the one or two hundreds. I’d say our numbers are probably in the 600-ish range.