Value-added distributor, Avnet, is encouraging its resellers to turn their attentions to opportunities in the small and medium business (SMB) market.
Speaking at his company’s annual partner conference, Avnet Australia managing director, Colin McKenna, said the SMB space was currently growing about 20 per cent faster than the market as a whole.
“It’s a pragmatic market that doesn’t get caught up in the exuberance of technology,” he said.
“SMBs haven’t suffered the excesses of large enterprises and aren’t as saturated with technology as the top end of town.”
And while Avnet is working with a wide range of independent software vendors (ISVs) to target a broad selection of vertical markets, McKenna said life sciences has been identified as a big opportunity.
Avnet president, Rick Hamada, visited Australia for the first time to attend the partner conference.
He said the trend towards stronger relationships with fewer distribution partners that had been prevalent in the Australian market in recent times was a global one.
IBM, for example, had three distributors in the US handling $US2 billion of enterprise business. “Early channel theory said more partners are better but that’s not true,” he said. “Quality over quantity is the focus these days.
“Acceptance of value-added distribution is increasing markedly as people concentrate on their core competencies. It all comes down to solutions because customers are no longer enamoured with technology for the sake of it.”
Value-added distribution now accounted for about $US2.8 billion of Avnet’s $US4.4 billion business, Hamada estimated.
Avnet first entered the Australian market with the acquisition of reseller, Intergrand, in 1999.
McKenna, then managing director of the reseller, was retained to head up the new business.
Avnet Australia is most closely aligned with IBM but, as previously reported in ARN, launched a partnership with HP last September. While resellers could choose to work with both sets of technologies, McKenna said most decided to specialise in one or the other.
The distributor currently has about 250 IBM resellers but only about 50 HP partners — a number which is expected to double or even triple.
“We want commitment to a strategic plan [from resellers],” Hamada said. “There must be development and investment around what battles they are going to pick – whether it be security, network integration or application specific.
“You can’t dabble in solutions. There has to be intellectual property generated in design, implementation, assessment or management. That’s the type of partner we have the best opportunity to develop a winning combination with.”
And although broad-based distributors had business units designed to develop value-add around certain technologies, Hamada said Avnet was ready for the competition.
“One way to look at it is that this [value-added distribution] is a full-time job for us but a part-time job for them,” he said.
"They are extremely focused on productivity and efficiency, but to succeed in value-added distribution you need to invest heavily in training and certifying people.
“I’m not bold enough to say they can never succeed in value-added distribution because they are quality organisations, but it is a different world and that gives us an advantage. This is our world – not just a department.”