Avnet, the UK's largest IBM-only distributor, is dividing its business to expand its product portfolio and address the lower end of the market.
The firm is splitting into three groups: E-business Value-add, which will encompass hardware sales; Middleware Value-add, set to include software; and Express, which will allow Avnet to sell lower-margin products, such as Linux, the bottom end of IBM's xSeries range and peripherals.
"We want to address and support margin in the channel," said Marlene Yeoman, general manager northern region at Avnet. "The Express division will be a skilled division, but with less complicated sales.
"Previously we were one IBM business. Now we can have a high level of focus and expertise in each division. Customers need expertise in IBM brands and faster decisions from us; you can't do that with a generic company."
Yeoman said the divisions will cross-sell, bringing together experts for sales. However, she stressed that VARs will always have one main point of contact.
"If customers want some lower-end products as part of an overall solution we can now offer this, whereas before we couldn't. We are not focusing on it, and we are definitely not competing with any of the broadliners.
"We can now offer business that is not surrounded by value-add to maintain margins," Yeoman said.
Alastair Edwards, senior analyst at Canalys, said it makes good sense to segment businesses to some extent.
"The low end of the market has very different sales and customer bases to the high end," he said.
"Having a unit such as Avnet's Express will mean the firm can still focus its skills and services on its high-end core business without the business being diluted by sales of any low-end products in the deal.
"This also will allow the company to remain focused and still target more high-end, value-add customers."
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