CRN profiled Avnet in the June edition of the magazine last year. Here's a look into the company's history and how it survived the downturn. Avnet acquired itX in August 2010.
Times are tough but Avnet Inc can survey a history all the way back to the Great Depression for lessons in survival.
Since its founding in 1921 the company has survived its fair share of economic downturns, not least the grim days of 1929 where Charles Avnet turned debt into a profit by changing his business model from retail to wholesale.
A lack of spare radio parts after World War I gave the business a big break and the complementary advent of TV meant that for more than 40 years the company grew.
Only the 1973 Oil Crisis and the recession that followed slowed the company down, producing its first ever year-on-year decline in revenue in 1975.
Now, nearly 90 years since its inception, Avnet Inc has its own museum in Phoenix, is present in more than 300 locations and employs 12,500 people worldwide.
About 120 of them man Avnet Technology Solutions' Australian offices, just one of the distributor's many global operating arms.
ATS specialises in value-added distribution of IT goods and globally it has been in operation for half a century. Today it boasts revenues of $US15 billion.
Avnet Inc's presence in Australia began nearly 20 years ago as Avnet Electronics Marketing, a distributor of small semiconductor and components. But
Avnet Technology Solutions' Australian arm is still in its infancy compared to the company's extensive history. It commenced activities here in 1997 as Avnet Sedona, a systems integrator.
In the following years the company functioned as Avnet Hallmark -- an IBM value distributor -- and Avnet Partner Solutions, a reseller of IBM, HP and Hitachi Data Systems.
In 2004 the company increased its distribution capabilities and in 2006 it began trading as Avnet Technology Solutions in Australia.
"It was the first time we ran just as a distributor and we closed down the integrator business," says Gavin Lawless, general manager for Avnet Technology Solutions Australia.
"Avnet's history is a good one and it's a very proud history," he adds. "We've grown significantly throughout the years but there's a lot more to do."
In this downturn, Avnet is in a good cash position, and Gavin Lawless claims ATS is well placed thanks to its "great vendor partners," and "great reseller partners".
"It certainly makes these times easier to handle," he says. "The year has obviously had its ups and downs but we're pretty happy with where we are today.
Year-on-year we're up 11 percent on the revenue line which is a huge achievement considering the market we're in.
"We all know it's a tough market, it's not easy to grow but we've all just got to run a much better businesses in order to find that growth."
He explains: "Running a better business is about being more productive and having better processes, it's about giving better service to your customers."
Cost-cutting is not the answer, either. "If you can find one more person in your business who can be customer facing, you've then got more focus on customers. I
f you can process orders quicker and more accurately you're providing a better service."
Avnet Technology Solutions' financial year begins 1 July. Last February when the Australian arm completed its FY09 budgets it had anticipated bigger growth than the 11 percent it has achieved so far.
First quarter sales were "not too bad" but during and after Q2 when the credit crunch hit, those higher growth expectations faded away.
Avnet has done well in these times, but in good times and bad the company is "hell bent on growing" and acquisition is certainly an option, Lawless confirms.
"The reality is, it's in these times where you can break away from the pack and often a good time for a lot of organisations to go and acquire."
It is also the time to invest and strengthen relationships with partners especially those smaller resellers who are in need of support and guidance.
Higher profits will eventually return to the channel and distributors need to ensure their reseller partners are around when growth is back on the cards.
Lawless empathises with smaller resellers, in particular privately owned businesses, which are less capitalised and are likely to have never managed a business in this economic environment.
"A lot of the smaller organisations do need help and we've had to work with a number of them to help them get through it."
Assistance is normally through credit and helping with cash flow, says Lawless, but in Avnet's case it isn't through discounting and rebates, it's more around helping resellers find large opportunities.
"It's not about giving better pricing, it's about how do you help them get access to better finance or how do you help them avoid using their own cash in certain transactions.
"More importantly you have to take a personal approach, you can't take a blanket approach because if you're not working with them personally you're not going to get the outcomes you want, so you have to make the time.
"It absolutely takes time and energy but you have to do it regardless of whether you have the resources," he says.
Gavin Lawless' savvy business advice stems from his many years working in distribution after he happened to stumble into IT, "as many of us do".
He admits he was never really a techie and instead began working in insurance in the late 1980s. But after a number of years pursuing his chosen vocation he came to the realisation it wasn't for him.
So in the early 90s, back in South Africa, Lawless spent several years working in IT distribution which led him and a few colleagues into launching a start-up in 1995 which the group eventually sold in 1999.
In 2000 he migrated to Australia and spent four years with Express Data in various roles.
He first joined Avnet in August 2005 and took on a permanent role in January 2006 as a sales director and in January 2007 he became general manager.
"The thing that I most like about IT distribution is that it's very commercial and it's very broad," he says. "It's not just sales; it's not just marketing, it's all encompassing.
"The variety is probably the major part that interests me. The commercial decisions that we're all making every day are very broad and very diverse. It's also educational and very interesting," he says.
"Particularly at Avnet, we like to be involved with new technologies."
The distributor has a number of top technology partners including Juniper, IBM, HP, IronPort and Avaya but is intent on not becoming too broad.
The key to Lawless' strategy is focusing on the gaps and finding the right vendors that will complement his existing lineup.
"If you look at security we have a number of vendors there that are growing. If you look at vendors like IBM, we're growing market share there too.
But our intention is not to go and find new vendors in the security space just because it's a good place to grow.
"In our portfolio, we're very aware of not having too many competing vendors and security is actually one of those areas in our portfolio that we're actually fairly well covered.
"Instead, storage and virtualisation for example are areas we have to grow.
We don't have a complete line-up so we're looking in any of those areas. There's nothing imminent and there's nothing I can reveal today but that is an area where we have some gaps," he says.
Avnet Technology Solutions - An Avnet Company
The story so far
Charles Avnet, a Russian immigrant, founded the global distribution company after WWI when he began selling surplus radio parts in New York. When factory-made radios hit the popular consumer market in the mid-1920s, Avnet sold parts in quantity to dealers and manufacturers.
He branched out into automobile antenna assembly and car radio kits over the next decade, and as World War II came on his son, Lester Avnet, joined him in making antennas for the US armed forces.
A second connector assembly plant was opened in 1956 on the West Coast along with a Los Angeles warehouse, to serve the aircraft industry.
Avnet continued to expand and in 1959 the company went public as Avnet Electronics Corporation with a listing on the American Stock Exchange.
Several acquisitions followed and Avnet broadened its horizons, acquiring distributorship contracts in the new fields of semiconductors, relays and potentiometers. For more than half a century, an Avnet was at the helm of the company Charles Avnet established.
Source: Avnet.com
-1.jpg&w=100&c=1&s=0)
.png&w=100&c=1&s=0)
