CRN Hall of Fame: Roy Vallee, chairman and CEO at Avnet

CRN: You were recently inducted into CRN’s Hall of Fame, what was your reaction?
Vallee: When I first heard about it, I was honoured and surprised. The real reason I received this recognition is because of the achievements of the men and women of Avnet. I’m privileged to be the team captain, so to speak.

CRN: How do you intend to move Avnet’s business forward — working with more solution providers or doing more business with the solution providers you have now?
Vallee: Both actually. Avnet will continue to expand its geographic footprint and its focus on solutions and vertical markets. Those actions will enable us to develop more relationships with more customers because we’ll be able to offer services in areas where we don’t have a presence today. For example, the recent acquisition of Azure Technologies brings us a group of customers in Singapore and Malaysia that we didn’t serve before. And by offering new solutions we’ll attract new solution providers looking for ways to grow their business, for example by working with Avnet to get into the healthcare market. At the same time, as we continue to expand the solutions we offer, our current customers will be able to expand into new revenue streams. A good example of that is our mobility business where we’re expanding our portfolio of mobility solutions, which in turn helps our resellers offer new technology to end-user customers.

CRN: What will Avnet’s business model look like two years or five years from now? What can we expect to see?
Vallee: We will continue to evolve, but I don’t think it will look radically different from today. What you will see is the continual evolution of our value-added services, an expansion of our offerings and probably a company with greater global scope and scale. The biggest changes will probably come from what our customers want from us in terms of the services we provide. This past year we launched a customer loyalty initiative to help us assess what’s important and then we’ll make the necessary changes to adapt, so it still remains to be seen how we will change as a result. Stay tuned!

CRN: Avnet is a much different company today than it was when you started, how would you say the company has changed in this time?
Vallee: Certainly I would say the biggest difference is that we are now a global company with operations in 70 countries. We’ve built our global presence through more than 40 acquisitions. As a matter of fact, when I first started, Avnet didn’t even have a computer business — that came later — but I had the opportunity to run what was, at the time, Hamilton/Avnet Computer, when it was just getting going. The interesting thing is that when I first started leading Hamilton/Avnet Computer, we had about $300 million in revenue. Today our global computer business is more than $7 billion. The increase in scope and scale has given us the resources to invest in tools for our resellers, such as Channel Connection, that make it easier for them to do business. We’re much more focused today on providing value-added services that enable our customers to grow their businesses whereas in the early days, our value was based more on having the right products available at competitive prices.

CRN:As a business partner, what can Avnet offer resellers and solution providers that other companies can’t?
Vallee: That’s an interesting question because one of the things our customers tell us is that our people really make the difference for them. They count on the Avnet team to understand their business and the industry and then work with them to help them to grow their business. So, what we really have to offer is the Avnet team. They are highly qualified with great technical skills and industry knowledge, but they’re also committed to serving our customers with integrity. And they have a passion to win on behalf of their customers. Avnet offers a great suite of services and tools to benefit our customers as well, and we work with the world’s leading manufacturers, but if I had to point to one thing that makes us different, I’d have to say our people.

CRN: How can Avnet do a better job of being a partner to the channel
over your competitors such as Ingram Micro?
Vallee: We need to continue to listen to what our customers and suppliers are telling us, and then respond. As a value-added distributor, we’re very focused on resellers serving enterprise customers and the solutions that help businesses be more successful. That gives us a leg up in understanding where the industry is going and how we can add value. We focus primarily on high-end servers and solutions, and because we’re not trying to represent every technology possible, the ones we do represent, we understand very well and therefore we can help the channel understand the opportunities as they emerge.

CRN: Avnet has a much larger presence in the US, what is planned for Avnet in Australia?
Vallee: Avnet has had a footprint in Australia for almost 10 years now; we started life as a systems integrator and then we transformed this business into today’s value-added distribution business. With the start of value distribution we have steadily grown our line card organically by working with vendors in the server, storage, software and networking arenas. Further extension of our line card is planned, so that the Australian operation fully reflects the global nature of the Avnet model.

We have also had a management change within the Australian operation. After many years of loyal service, Colin McKenna retired in December 2006. In 2007, Gavin Lawless assumed the role of General Manager Australia, and he continues to drive value to our business and vendor partners so that they can connect with more businesses via the Australian channel.

CRN: Last year KP Tang told CRN Australia that the company had grown by 50 percent year on year to reach 500 business partners in the Australian region. Has this grown?
Vallee: The Australian operation has reflected the growth that we as a company have seen across the globe. More importantly, the Australian team has continued to expand our line card, and this is evident in the fact that we have brought on four new vendors in the past 12 months. With the addition of new vendors, we have also seen the number of business partners grow, and today Avnet has more than 700 organisations that look to us to add value to them on a continual basis.

CRN: Tang also told us that Avnet re-branded the business divisions and became known as Avnet Technology Solutions Australia. What was the reason behind the re-branding? Has it helped to advance the company in this region?
Vallee: Globally we are going to market as two operating groups — Avnet Electronics Marketing and Avnet Technology Solutions, and this was a decision that we made last year. Al Maag, our chief communications officer, during his annual global marketing council gave Michael Costigan (Australian marketing director) the green light to roll out the ATS branding in Australia. Working with KP Tang, Michael and the Australian marketing team have performed a great job in re-branding the Australian business; central to the re-branding was the adoption of a new tag line ‘Vital Connections for Business.’ The new tag line refers to all of the value-add services, solution elements and partnerships that Avnet makes available to partners and customers.

CRN: How are you growing Avnet in the Asia Pacific Region?
Vallee: With KP Tang joining Avnet as president of Avnet Technology Solutions Asia, we now have a seasoned professional who is committed to the strategic direction and growth of Avnet’s computing business in the Asian region. Under KP’s leadership we have already acquired a new business in Singapore and Malaysia and a new integration centre in mainland China. Every region has its own set of distinct local cultural aspects, and with KP leading the Asian team, we have ensured that we remain sensitive to the opportunities of growing our global footprint in the Asia Pacific region.