Avnet to turn up volume in cloud space

EMEA boss Graeme Watt also says distributor will restart M&A engine during interview with CRN sister publication Channelnomics Europe

After making a flurry of acquisitions between 2008 and 2012, Avnet's M&A strategy has cooled in recent years.

Graeme Watt, president of Avnet technology solutions for EMEA, told Channelnomics Europe why the distribution goliath is now in the prime position to kick expansion initiatives up a notch.

Watt explained that the lull has been necessary to ensure effective and rigorous integration, particularly following the acquisition of Magirus in 2009.
"We were keen to retain as much of Magirus' talent and expertise as possible and while this took a lot of time, it has ultimately paid off - the stronger performance in Europe is testimony to that," he explained.

However, M&A will certainly be on the agenda over the coming years, as the distie looks to ramp up expansion.

"I think we have a duty to be in all the major markets, especially multi-region markets. M&A will be key to doing so on a geographic level," he said.

Watt indicated that despite pulling out of the Middle East and Africa due to profitability challenges, Avnet was keen to crack one of the few markets it does not operate in: the Nordics.

Platform for growth
Broadening supplier networks and services would also be an investment priority, he added. One of the most important long-term moves though, would be adapting to the rise of the third platform.

"There's no doubt that cloud, data analytics and the focus on mobility will dominate growth between now and 2020 - our internal rate of change has to match the external one if we are going to ride that wave."
Avnet will be launching its cloud marketplace before the end of the calendar year in order to do just that, a move that Watt said would bring the company up to speed with its competitors.

"It's fair to say we haven't made as much noise as others in the cloud marketplace, but this is because we want to make sure we can deliver a quality service without neglecting our datacentre-orientated customers, who are building their own clouds," he pointed out.

Alongside the upcoming cloud "tool set", Avnet will continue to develop cloud-based solutions and consult with resellers about their cloud operations, he confirmed.

When asked about the wider role of the cloud in the distribution market, Watt insisted that harmonious co-existence was not just possible, but inevitable.

"Of course the cloud is a route to market, a consumption mode, but disties will definitely remain relevant," said Watt. "Suppliers won't be able to address the breadth of the market without us - it's far [better for them] for us to do the scaling, as opposed to each supplier setting up a brand new infrastructure."

Said scaling also safeguarded Avnet against competition from local players, according to Watt, which he claimed were "unable to properly scale and leverage their innovation".

Working with all the IT world's major manufacturers, Avnet could be seen as susceptible to vendor turbulence. But Watt emphasised that the commercial impact of recent upheaval has been minimal. He remained confident that HP's upcoming split would not damage trade, because Avnet has only ever dealt with the enterprise arm, which "if anything will now benefit from more attention".

Meanwhile, following IBM's sell off of its x86 business to Lenovo, Watt predicted that Lenovo and Avnet's trade in the server business would span "the short, mid and long term", now that the "substantial learning curve" is out of the way.

Home security
After losing its franchises with Pulse Secure and Barracuda, with the former being a less mutual split than the latter, Watt said that Avnet was planning to foster organic growth in its security portfolio, particularly with RSA and Cisco, which he said delivered strong performances last year.

"We don't want to look at M&A and organic growth as mutually exclusive strategies - both have potential to bring new resellers to the market," said Watt (pictured right).

In the coming years, Watt said Avnet would look to nurture deeper relationships with customers and adapt to their needs in a more sophisticated way. This would be particularly defining among mid-sized resellers looking to transition to the cloud and new players who are still finding their feet, he stipulated.

"As our customers move away from buying from just one supplier to hand-picking solutions, we too must transition from supplier-centric resources to a focus on selling and support," he concluded.