Avnet - uncovering two sides of distribution...

Avnet - uncovering two sides of distribution...

On a recent trip to Australia, Avnet CIO Steve Phillips sat down with ARN to discuss plans for growth, the Cloud marketplace and an increased focus on education.

Steve Phillips - CIO, Avnet

Steve Phillips - CIO, Avnet

Steve Phillips has been with Technology distributor Avnet for 11 years, in his role as chief information officer, he is responsible for many of the company’s technology initiatives.

On a recent trip to Australia, he sat down with ARN to discuss plans for growth, the Cloud marketplace and an increased focus on education.

“Avnet overall is growing, we have scale and we operate in a very competitive market,” Phillips said.

“There are Two parts to Avnet, there is the technology solutions part which is the piece Darren [Adams] looks after for us in Australia, and that is really about enterprise IT. If I think about that business, 2016 is about how can we really support our customers in that shift to the Cloud.

“Not everything is going to the Cloud but things are starting to move there and we need to bring some of our investments to bear, to help partners sell more of those capabilities and we need to educate as well as sell.

“Cloud, Big Data, mobility and security, those are the big themes. the goal is to constantly drive greater efficiency internally as well as for customers help our customers get into these new technologies.

But that remains only half of the Avnet picture Phillips has to keep in mind.

For the distributor has another part that constitutes 60 per cent of total revenues, the electronics components business, with a core focus on its customer base that is becoming increasingly globalised.

“Many of them are very large customers and we are providing lots of component distribution services to those customers,” he said.

“We are starting to build out what we call our embedded systems capability. Avnet actually has a very sizeable electronics products manufacturing capability.”

Phillips explained that in this part of the business, the company did not go to market and sell as Avnet, but provides white label services.

“We have global capability and over a billion dollars in revenue,” he added. “That’s a business that we believe our customers want more of, particularly for small production runs of equipment.”

When asked if Avnet’s channel partners would be an avenue pursued to drive growth in the manufacturing side, Phillips said the intention was to keep the two separate in the immediate future.

Provisioning the Cloud

For the distribution side, Phillips said Avnet had developed some advanced capabilities in the North American operation for customers provisioning Cloud services, and the company was working on extending that capability to the Australian market.

“We are establishing an engine, it’s connected up to the Cloud providers, and provides our customers with one stop shopping,” he explained.

“In this new world of public Cloud, we are going to have many different Cloud providers and Avnet has a role to play in terms of providing tools to create a seamless process for the customer.

“For decades we have been fine tuning our processes to sell products. They are very sophisticated products but still software and hardware. What we are doing now is retooling our systems to provide the same sort of capabilities in the new third platform world.

Phillips said the company would adapt the solutions to suit each market so by the time it gets to Australia, it would be a proven solution.

Meeting the resellers

Avnet recently launched its emerging technology council, a collection of smaller resellers that do not naturally receive an individual voice with their distributor, but Avnet sees value in giving them a collective voice.

The first meeting took place while Phillips was visiting and he said it was an opportunity for him to talk to these smaller partners and get a gauge of their needs but also to give a C-level perspective on some of the offerings in the market.

“I was talking to the group about some of the new technologies that are coming online and how I view them as a CIO and one of the things I spoke about was storage,” he added.

“If you look back even five years ago, we were looking to slow the growth of data. We are not looking to do that anymore.

“Our philosophy has changed dramatically in the last five years. What we used to see as a liability, because storage was expensive, is now an asset. It gives insight into customer behaviour for example.

“Now we don’t purge anything from the datacentre, we keep it and that becomes our mine where we dig for insights. It’s still a working process, we have the data, we have made investment in the last couple of years on an in-memory data warehouse.

“We are also building up our data science capability. We want to look at what we have done and use that data to predict what we are going to do.

The future of IT skills

Phillips believes predictive analytics capability would not just be key for Avnet going forward, but would be the foundation of growth in the IT sector as a whole.

“My son is graduating from Arizona State University, he’s at the end of a four year engineering degree,” he explained. “He and I both agree that there are two really hot areas for graduates, one is data science and the other is cyber security.”

For Phillips, education and training is set to play a big part in Avnet’s business in 2016 and beyond with the organisation acquiring Magirus Group in 2012, a European distributor.

As such, the company had developed a system to manage the registration and delivery of IT training courses and provided partners with virtual training environments.

Phillips said that once Avnet recognised the value in such an offering, it set about expanding those capabilities to create an online training platform that could scale globally.

“When we bought it, straight away we could see it was a great business,” he said.

“Our challenge was that it was not scaleable. My IT team, who are used to handling scaled environments, got together with the Magirus folks and we built on Amazon Web Services a very scaleable set of training environments.

“It’s a great example of best practice being carried over from a company that we purchased. What Avnet did was we made it scale, ready for prime time and a global audience and it’s been a great success.

“We have found customers here have quite a demand for this training capability. They buy the product from us and we can help them train themselves as well as train their customers. Not every customer needs that training capability, but is is certainly a value add for those that do.”

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