Avnet: SMB Spending Still StrongBy Jessica Davis | Posted 2008-01-25 Email Print
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The distributor's second quarter results show SMBs in the U.S. aren't spooked by economic fears.
If the economy is flagging, somebody forgot to tell small and mid-size businesses.
Distribution giant Avnet's Technology Solutions organization reported a 6.9 percent increase in sales on a pro-forma basis year-over-year during its second fiscal quarter – excluding revenues from the company's acquisitions. On a geographic basis, sales in the Americas were up by 6.6 percent while sales in EMEA and Asia were up 1.9 percent and 45.6 percent respectively, year-over-year.
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"There's been a lot of conversation in the press about the difficulty that the U.S. economy is having," said John Paget, president of Avnet's global Technology Solutions group, the organization that distributes IT solutions. "We serve a reseller community that focuses on SMBs and we continued to see good growth there."
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And from Avnet's modeling for the short term, there are no indications that SMB purchasing will be slacking off.
"The SMB market place has shown very consistent growth for quite some time now – two to three years," he said "I see that continuing. We are all looking for the indicators to see that that is softening, but we just aren't seeing any indication that it is."
Virtualization and server consolidation marked the fastest growing technology solution of the quarter. Storage, networking, security, and document and content management solutions were also strong.
In terms of vertical industries, healthcare, government and education led the way, Paget said.
Paget said that Avnet has started to see an increase in the number of end-user companies requesting that resellers provide them with leasing capabilities.
"Given the interest rates available today, leasing is a better option than using cash," he said.
Looking ahead, Avnet is expecting a high-single digit growth rate around the world, in line with overall market predictions, during the third fiscal quarter.