Verticals new frontier for resellers: Avnet CEO

Distribution giant Avnet is investing in training programs and other resources to help its resellers better understand how to do business in specific vertical markets.

Rick Hamada - Avnet chief executive officer effective next month - said that the next frontiers for value-added resellers were in vertical markets, which would lever them into more complex, services-oriented contracts.

Avnet ran training programs for its US resellers focused on vertical industries such as finance, government, energy and healthcare. 

With the US healthcare system on the verge of fundamental change, Hamada said that Avnet’s HealthPath University was preparing its resellers to understand the technology needs of hospitals and other providers. More than 500 partners graduated from the program last year.

He would not be drawn on whether equivalent programs would be brought to Australia but said that Avnet would consider their introduction.

Resellers were expected to play a growing role in the large-scale digitisation of health records and operations being flagged by the Australian Government, while public sector and miners were also expected to lift demand.

Avnet Australia marketing director Michael Costigan said that the distie's education programs including NetworkPath and StoragePath helped Australian resellers win deals.

Last month, Avnet reported a 40 percent jump in third-quarter sales to $US6.6 billion ($A6.2 bilion). Sales in Australia - roughly a third of Asia-Pacific  – are $500 million. 

A third of sales were attributable to former competitor itX, which Avnet received approval to buy for $77.5 million early this year.

Former head of ITX and now Avnet’s general manager for Australia, Laurie Sellers said that the marriage created the only “genuine enterprise distributor in Australia”. Resellers were able to access the  range of hardware and software enterprise offerings from the likes of IBM, HP and Oracle. 

Avnet also recently signed a global partnership with Cisco to sell its unified communications solutions, an area in which the company expected to deliver sharp growth over a few years.

Sellers said he expected to see cloud services deliver a bigger proportion of the pie as resellers learned to move companies from platform-as-a-service (PaaS) to the more services-oriented infrastructure-as-a-service (IaaS).

“The cloud is the best opportunity resellers have ever had to sell software and hardware,” Sellers said. 

It’s a familiar cry from companies which derived much of their revenues from pure hardware sales as they contemplated the disruption to their businesses from the cloud. About 70 percent of Avnet’s sales were for hardware.

But Hamada rejected suggestions that resellers should be concerned about the cloud eroding their sales, especially to the enterprise: “There was a concern that virtualisation would kill server sales. It didn’t.”

But he stressed the importance of resellers acquiring new skills, especially to meet demand for private cloud services. 

And a core skill resellers needed in the cloud was how to secure services, especially in light of the recent high-profile failures of Amazon and other public-cloud service providers.

“Security is a great growth area. Some of the headlines have had a big effect.”