ATS chief Gallagher weighs in on Q2, exec switches

Phil Gallagher AvnetIt’s growth across the board in all regions for , global president of Avnet Technology Solutions. In its recently completed Q2, the distributor posted revenues growth in all regions of the world.

For the second quarter of its fiscal 2011, the distributor posted a 40 per cent leap in revenue over the year-ago quarter, ending with $6.7 billion (U.S.) in revenues and profits of $141 million. Its Technology Solutions division accounted for $3.2 billion of those sales.

Hardware was probably the biggest driver of the quarter, with Gallagher noting that industry-standard servers and storage led the way, and that the high end of the enterprise hardware mix over performed. Software and services accounted for about 30 per cent of the distributor’s mix, Gallagher said.

The distributor doesn’t break out its Canadian results, but Gallagher did say the Canadian organizations “well exceeded plan” and performed “at or just above” the same levels of growth the distributor has enjoyed in the U.S. and Latin America.

“We’ve seen excellent growth in storage with the Technology Infrastructure Solutions [TIS] portfolio and in the high end of the server market,” he said.

Gallagher echoed earlier comments from Avnet Canada chief Brian Aebig that the distributor was “exploring the customization of GovPath,” its government-focused practice builder, for the Canadian market. Although it’s clearly a priority for the distributor, no timelines were given for the formal launch of GovPath in Canada. Many of the distributor’s other SolutionsPaths, of course, are readily available to Canadian partners because the knowledge they offer is less region-specific.

Avnet also last week made some sweeping changes to the leadership of its Technology Solutions division, amounting to a game of executive musical chairs that saw most of the company’s business-unit leaders trade positions. Gallagher said the decision was part of the distributor’s usual plan of “having a strategy and then aligning the structure to the strategy,” and was used to give its executive bench a chance to try different part of the business.

Among the changes, Avnet’s Canadian operations under Aebig move from under the HP business (formerly headed by ) to the oversight of IBM unit chief . But Gallagher said there’s not anything more to that decision than an interest in spreading around experience.

“Brian’s our leader in Canada – the field general there, driving the business and he’ll get some good mentorship from Fred,” Gallagher said. “And Fred will learn a bit more about the Canadian market.”

Another high profile switch is the announcement that longtime SolutionsPath leader moving over to head up the HP Solutions division, while former TIS chief takes over Vottima’s former role with Solutions Marketing and Development. Gallagher said he expects Vottima will help drive the idea of solutions distribution further into the HP group, while Miller should offer SolutionsPath “another perspective on driving the paths into the businesses and how to integrate the marketing and the solutions into the practices.”

Looking forward, Gallagher – like Avnet CEO – said he expects a solid year for 2011. Priorities for early in the quarter include putting the finishing touches on the Bell Micro integration, particularly in Europe, and continuing to build the SolutionsPath practices.

“We’re very optimistic about 2011, about the value we continue to try to drive, and we’ll continue to raise the bar in terms of performance in the marketplace,” Gallagher said.

For its third quarter, Avnet is predicting revenues of between $5.95 billion and $6.55 billion (U.S.).

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