Avnet Australia neared half a billion dollars before Tech Data deal

Avnet Australia increased its revenue by $57 million in the year leading up to its acquisition by US distribution giant Tech Data.

The distributor's revenue hit $480 million for the financial year ending 2 July 2016, an increase of 13.6 percent from 2015. Profit was down 18 percent to hit $7.6 million.

Avnet Australia's financial report, which was lodged with corporate regulator ASIC, made little mention of the impending Tech Data acquisition, other than to say the deal is expected finalise in the first half of 2017.

On 19 September, Tech Data announced it would acquire Avnet's Technology Solutions business unit for US$2.6 billion. The deal should see the Tech Data brand arrive in Australia for the first time.

Avnet vice president and general manager Australia Darren Adams told CRN that he was pleased with the year overall given the competition among distributors and industry volatility.

"We’ve always been in the solutions business, but the problems are different now," Adams said. "Therefore, last year we got even more serious about the mantra, 'Think big. Act small. Fail fast. Learn rapidly.'

"That’s not easy to do, but I’m thankful we have good people that kept looking forward. So our big project continues to be all about managing change and being performance-orientated in a rapidly moving IT landscape."

He said that Avnet Australia this year has been focusing its efforts on execution and shoring up relationships with existing partners.

"We are fortunate to have amazing suppliers on our linecard; last year we focused on increasing scale and leverage with them, as well as adopting innovative new sales models."

One of those new sales models is Powered by Avnet, a finance model that sees the distributor underwrite capital investments to allow partners to offer more flexible finance models to customers. The offering builds on a variety of Avnet services, including outsourced integration, hosted private cloud and co-location. 

It has been a year of ups and downs for Avnet Australia, starting in February when it lost distribution rights to Hewlett Packard Enterprises' portfolio. HPE sat alongside Avnet's growing converged systems business, which has been bolstered with the likes of Nutanix and Tintri, along with existing enterprise infrastructure solutions vendors IBM, Oracle and EMC.

Two months later, though, Avnet strengthened its relationship with Dell, gaining access to the entire range of servers, storage and networking gear.

Avnet also scored two big wins with Microsoft, being the first Australian distributor admitted to the vendor's Cloud OS Network in March, meaning its private cloud is validated with Microsoft Azure, enabling Avnet to open up a hybrid cloud data centre solution to partners.

In June, Avnet was one of the five distributors appointed as a Cloud Solution Provider partner, which includes products such as Office 365 SKUs, Azure infrastructure-as-a-service, Enterprise Mobility Suite and Dynamics CRM Online.