Distributor aims to continue growing services business
It’s beginning to seem a bit like a broken record – as distributor Avnet closes out a quarter, I ask Avnet Technology Solutions global president Phil Gallagher how the Canadian organization did. And every quarter, the Canadian subsidiary gets a glowing review.
You can add the company’s recently-completed first quarter of its fiscal 2012 to that mix. While Avnet Technology Solutions overall grew 14.7 per cent year over year, Gallagher reported that the Canadian business grew in the 18 to 23 per cent range.
“We’re very pleased with the Canadian team’s performance,” Gallagher said. “We’re extremely strong with our HP and IBM businesses up in Canada, and we see good growth in storage that will continue for the next several quarters.”
Growth in Canada has been a highlight for ATS for the last two years or more, and the distributor has more than doubled its business here over that timeframe. But Gallagher described that growth as “consistent and sustainable,” powered by a consistent strategy behind its SolutionsPath approach to the market.
“We’re not seeing the business slowing down there in Canada at all,” Gallagher said.
But if Canada was a star for the quarter, the Asia Pacific arena was a superstar. Although it accounts for only 15 per cent of the company’s business worldwide, the nascent business unit was growing at a rate greater than 30 per cent. On the flipside, Europe proved a mix bag for Avnet, with some regions performing well and others suffering.
Gallagher seemed more guarded about performance across the Americas for the first quarter. “We’re not popping champagne, but we’re feeling pretty good,” he said, adding that “the VAR base feels optimistic going into the Deember quarter and our suppliers also feel pretty good.”
“We continue to hum along,” he said.
The distributor continues to invest in its services business – currently a $1.5 billion line of business for the company, and a major source of growth. Over the last quarter, the distributor combined much of its service portfolio under the umbrella brand of data centre lifecycle services, but Gallagher hinted that there’s more to come, calling services one of the top growth priorities for the company. That includes an additional charge into managed services, and more effort to raise awareness.
“We know we need to build out our services, and we want to get the message out to our partners as well that we want them to leverage Avnet to help them get more scale,” Gallagher said.
In particular, Gallagher said the distributor would delve into more effectively offering vendor services, and to building awareness of its integration services.
“That’s a core value that we bring to the market and I don’t believe our customers and partners know enough about what we’re doing there,” he said.