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Companies are still spending
money on data center technology, despite a weak economy, as they look to drive
greater efficiency and boost employee productivity, and that’s good news for
the channel, according to Phil Gallagher, Avnet Technology Solutions global
president.

"Are CFOs holding back?
Are CEOs holding back on enterprise spending? I think even in a market where
there are some challenges around the economy, if we provide the solutions and
provide the partners solutions to drive efficiency and cost savings to an end
customer, they’re still moving forward with that investment," Gallagher
told Channel Insider. "Its not
like the corporations don’t have cash. Cash accessibility is not the issue with
this economic downturn. If you can drive efficiency and make investments in IT, that’s happening."

Sales at the Phoenix,
Ariz.-based value-added distributor were up 3.9 percent to $6.43 billion for
the first quarter of 2012, the company announced Oct. 27. Avnet Technology
Solutions reported revenue of $2.6 billion, up 1.9 percent over the same period
last year. Quarterly operating income was up 14.7 percent over last year’s
first quarter.

Avnet Technology Solutions
saw software sales grow 40 percent, year-over-year, and hardware sales were up
30 percent, led by industry-standard servers and storage. Services revenue also
grew. "The Americas continue to show very good signs of brightness from a
marketplace standpoint and opportunities moving forward," Gallagher said.
"We’re very optimistic, cautiously optimistic, about what’s happening in
the market."

For VARs looking to grow
their businesses, Gallagher said data center technologies across the board are
in demand.

"If you look at the
growth, we continue to see terrific growth in storage. Storage is continuing to
grow really well for us. Enterprise servers, led by industry standard, but in
the server area its still very good," he said. "As storage continues
to grow and networking continues to grow, security around the network and
security around the data center is going to be a big market for all of us.
We’re really excited about security."

VARs should also be paying
attention to vertical markets like government, health care and finance, he
said.

In looking for new
opportunities, Gallagher said solution providers need to be ready to go with
cloud solutions. "The private cloud is going to be a great opportunity for
us moving forward. It’s going to be a great opportunity for our partners moving
forward."