Avnet sends out partner-friendly message

In his first interview since becoming the new head of Avnet Partner Solutions UK, Colin Robertson speaks exclusively to CRN editor Sara Driscoll about the company's relationship with IBM, its reseller partners and what the future holds for distribution

Sara Driscoll: Could you explain more about your new role?

Colin Robertson: My role is to take over from what Marlene [Yeoman – former northern region managing director of Avnet Technology Solutions] was doing, and to ensure we give our partners value-add.

SD: Could you expand on what Avnet sees as value-add?

CR: Distribution is always known as price and delivery, which is not value- add. There are three points to the value we add. The first is credit: to ensure that our customers can get credit to buy goods and that they get the best payment terms, from [IBM] Global Finance. The second point is to find software partners that have strong applications that need hardware infrastructure partners.

The third point is to provide marketing, both in terms of generic marketing and bespoke marketing, such as campaigns and seminars. We help resellers to do this, because most resellers don’t have a marketing department. They probably have a junior member of staff who handles some of the marketing, such as putting together mailers. But this is at the request of a sales person or a brand person. Most VARs do not have a marketer who thinks strategically on a day-to-day basis, or looks at a yearly plan. We have a team of five people.

SD: Could you tell me about Avnet’s company structure?

CR: There are three businesses: Avnet Electronics Marketing is our components side, run by Sukh Rayat; Avnet Visual + Data Solutions, run by Matthew Gower; and I run Avnet Partner Solutions [APS], which is the computer side of the business.

SD: How do the units work together?

CR: Because Avnet is such a big company, the difficulty is working toge-ther. But there is a huge emphasis from the US, and including EMEA, to ensure that the local different divisions work together. We have a quarterly meeting where we talk about what is happening, and how we get our messages across. We also look at our databases, to see if we have common customers that are working together and to see how we can actually work to enhance our position and the customer’s position.

SD: Do you do joint marketing between the three business units?

CR: It is kept separate at the moment, but I think overall we should be doing joint marketing. The difficulty is actually sending out a message. Do we send out a corporate message, or do we send out an individual message, which is difficult? At the moment we send out our own messages individually. But I think there will be a point soon – and this is one of the discussions we are having – when we will send out a corporate message that says we’re APS in the UK and we have all of these functions. We can provide complete solutions, all the way from components to monitors, right up to the computers we sell using IBM hardware.

SD: On the subject of IBM, what percentage of your business is IBM now?

CR: IBM makes up about 99.2 per cent. The reason for this is that we have some complementary vendors that we work with: one in hardware that complements our IBM offering, called PacketLight, and some in software such as Optia and Eircom.

SD: Are you looking to diversify from IBM?

CR: Definitely not. We’re not moving away from IBM at all. IBM and Avnet have a long relationship. It’s always up and down, but that is usual, and the IBM/Avnet UK relationship is very good. We’re not going to move away because we think that IBM is the number-one technology and server company. I need to try to expand its base, which we do by getting complementary products: creating more solutions around the IBM technology.

SD: What is the biggest challenge about being majority IBM? Is it easy to find such complementary products?

CR: The products are available left, right and centre. There is no issue about availability: it is more of a question of whether they are the right products. We are always assessing new software vendors. But the proof of the pudding is once you have investigated and gone through it. You can’t simply say this looks good and off it goes and makes money.

SD: Are there any vendors you would like to have in your ‘dream vendor’ portfolio?

CR: Oracle. This is because we have a large IBM base and 65 per cent of IBM p-Series is running Oracle. So I would like to have a much tighter relationship with them. In the US we have a strong relationship with Oracle, but in the UK it has other distributors and doesn’t feel it is appropriate to be working with us at this time. I wish it would reconsider, because as a worldwide company we can offer more.

SD: What is the biggest challenge facing IBM resellers at the moment?

CR: Everyone is looking for solutions partners. There will always be one or two highly specialised infrastructure partners, but I think if they stick to pure infrastructure they will have problems.

Our objective is to try to get them into solutions-based situations, or at least try to marry them up with a software partner, which is one of our key strategies in trying to help VARs.

This is where we come in with marketing. We try to help our partners move their business to selling more software and consultancy. For this financial year, Avnet UK will have spent about £1m on marketing. A sizeable proportion of this is marketing to help VARs operate as a solutions firms, rather than infrastructure companies.

SD: What’s the biggest challenge facing Avnet in the market right now?

CR: Moving us into a position of value-add. It’s difficult to persuade partners that we are doing that, because the view on the whole of distribution is that all we do is take margin. But the partners I have worked with over the past five years – the true partners – will say I do give value. But those who don’t know Avnet, nor distribution, will think that we – I mean the whole of distribution – just take money. The change will happen gradually.

SD: What’s the biggest opportunity that Avnet has at the moment?

CR: Working with the IBM base. Working with the ISVs that we have is also a huge opportunity. They bring a different customer base to us that are not necessarily with IBM.

SD: How are you going about attracting more ISVs?

CR: We have ‘ISV days’ when we invite as many of them as possible so that we can introduce ourselves to each other. We tell them what we are trying to achieve and explain the value of them working with our business partners.

But it’s not all talk. I need to put some cash behind them, and try to make sure that any resources required will be taken care of.

There are a number of different companies that work with Avnet in the UK and the US. A lot of the large US ISVs operate around the world. One of their objectives is to get out as much as possible, and Avnet US has the capability to go out around the world. The ISV calls Avnet US and says it wants to come into the EMEA market. This makes it easier for me, because I don’t have to market to them: they come to me through my own sources.

SD: With the market picking up, are there any potential acquisitions on the cards for Avnet?

CR: The company is always inquisitive, but we look only at things that will complement the existing infrastructure. I can’t commit that we are going to buy someone, but I won’t say that we’re not. We have a team in EMEA that looks at acquisitions all the time.

SD: Is there one particular type of company you would look at to fill a hole in your portfolio?

CR: There is always a hole in everybody’s portfolio, and all companies are available at a price. But can you afford them? Generally the companies that are available have a problem, so you have to work how much that will cost.

SD: What does the future hold for distribution?

CR: My vision of distribution for Avnet is I would like it to be as close as we can to business partners, but even closer to ISVs. The business partners I am talking about are the system integrators, because they have very large bases with tremendous skills and they need to work with someone else.

SD: How are distributors coping with the rise of services? Do they want to get into services themselves?

CR: Services are a major portion of business partners’ revenue and margin. Ours is not to take it, but to enhance it. I can’t speak for the other distributors, but we are not here to challenge our business partners on services. We would sell from IBM Services to our partners.We don’t necessarily have 20 engineers to do the job: we expect out business partners to do that. We work with our partners, not against them.