Avnet: Partners Need to Go Cutting Edge

Avnet is encouraging channel partners to take chances on cutting-edge technologies and emerging markets before these markets become overrun by direct-business models.

At Avnet’s Hewlett-Packard partner summit Nov. 28, the company’s president of global services, John Paget, told partners in his keynote speech that instead of “building business around the 5 percent of what is being spent, focus on the 95 percent that’s going to be spent,” and begin building businesses around longer-term goals, business models and technology. The channel, he said, is the driver of leading-edge technology, and there’s money and innovation just waiting to be taken advantage of.

If the channel doesn’t get there first, Paget said, direct sales will. “If we’re not ahead of that market, it’ll end up being a direct market. And no one here gets paid in a direct market,” he said.

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However, most of Avnet’s partners are SMBs (small and midsize businesses) with limited budgets, and it can be difficult for them to make the necessary investments in new technology without help, Paget said. Avnet’s role is to help its SMB partners break into new technology markets, he said, including vertical markets such as health care and government.

Paget said that Avnet plans on investing in high-growth, high-ROI areas such as security, document management, software as a service and SOA (service-oriented architecture). The distributor has made acquisitions in those areas recently, buying ACAL, a U.K. IT distributor of storage, and also buying the enterprise business of European distributor Magirus.

Paget said the distributor will also place more emphasis on its vertical markets. Its HealthPath program educates partners on business issues, clinical workflow and hospital hierarchy so that partners gain credibility with their customers, said Jack Morris, vice president of technology and market solutions. “We want to educate partners and bring them along with us,” Morris said.

The distributor’s University program offers a three- or four-day event during which partners learn about and visit with health care professionals to find out what technology issues they face. Those partners who attended, said Morris, saw their health care practices grow 47 percent. The distributor intends to hold an “internship” program, during which their customers spend a week in an actual hospital to experience firsthand the issues their customers face.