Executive Briefing: Avnet's Cloud Strategy
Rick Hamada, Avnet's current president and COO, will take over the CEO job on July 4, 2011 from the current chief Roy Vallee. Should Avnet partners and vendors expect big changes ahead? Not likely. Hamada, speaking with Channel Insider, points out that he's worked for Avnet for 27 years and has shaped and influenced many of the company's directions and strategies already.
Nevertheless, a new CEO at the helm will likely mean some kind of change. Channel Insider spoke with Hamada about his vision, goals and strategy as Avnet's new CEO. Here are excerpts of that conversation.
Channel Insider: What are Avnet's key issues going forward?
Hamada : Growth, globalization and great people. Theses are the major topics on my mind and I have a feeling that my vision and agenda will include a lot of attention to those three. But I’m keeping an open mind and using this transition time to reconnect and make sure I know what’s on the minds of key constituencies.
Channel Insider: Tell us about the progress of Avnet's Solution Paths. Are you seeing more success from any one more than the others? Is the Solution Path strategy performing the way you'd hoped it would?
Hamada : We are still very firmly convinced that the move towards solutions enablement for our partners – building full ecosystems around verticals or technology practices, is absolutely the right strategy. The most mature ones are Health Path, Gov Path, Storage, Security and Virtualization… We feel so good about it, we announced additional Solutions Paths in the areas of Retail, Finance and Energy.
We still believe that preparing a channel to be more specifically trained, knowledgeable, have deeper subject matter expertise in some of these key vertical and technology areas is the way that value-added distribution is defining itself for the future. Value propositions have lifecycles, too. People working in technology are very familiar with technology product lifecycle. Value propositions have lifecycles, too, and Solutions Path I believe is the result of the evolution of value-added distribution.
Channel Insider: What are the big trends in the market today that solution providers need to do a better job of capitalizing on? How will Avnet help them do that?
amada : There are some positive signs early here in 2011 that there is reason for optimism regarding economic growth. There are some exciting growth prospects in less developed or what people call emerging markets. We’ve invested quite aggressively in building out our global scale and scope during the past 5, 10, 15 years, both on components as well as our computer side of the business. We’ve done so both with organic investments as well as with acquisitions.
In North America there are still bright prospects in information technology such as analytics. If you drill down from there, solution or vertical or application or industry specialization that adds even more value to the engagement.
Channel Insider: Which technology areas do you see growing?
Hamada : I see strong demand drivers for an increased focus on storage. I see storage that moves from today’s storage sub-systems to more maybe solid-state, SSD-type solutions and hybrid solutions. Virtualization, as far as I can see, makes more and more sense to leverage what you do have in infrastructure.
Everybody’s most popular topic is the cloud and how the cloud will play going forward and how the channel can add value going forward -- what will be public and what will be private. I certainly believe there will be elements of cloud solutions in the data centers of the future as well as in Avnet the customer and Avnet the operating company.
Our challenge -- and our opportunity -- is to remain nimble, agile and innovative.
Channel Insider: What are Avnet's plans around the cloud, and how important is the cloud to the company's strategy?
Hamada : Our role is to help sort through all of the options and opportunities here and to continue to communicate with our VARs. What kinds of services, demands , opportunities? What types of value should we be creating together as the demand for these types of solutions arise?
What values can scale across a network of partners and what needs to be done customer-by-customer? What’s more customer-specific should be the domain of the VAR, and what’s scalable could perhaps be the domain of the value-added distributor.
Channel Insider: Vendor rivalries have heated up lately -- Oracle/Sun vs. HP vs. Cisco. As "Switzerland," how does a distributor like Avnet keep all these vendors happy?
Hamada : The skill of relationship management is something we’ve done for many years as a distributor. We’re not an IP company. We are a services company out to accelerate the success of our trading partners doing certain things all day every day, building scale and efficiency and leveraging that for our partners benefit.
This is the world we live in.
Our go-to-market strategy helps us keep that more manageable. In North America we have a dedicated team of people built around our IBM relations, one around HP, one around Oracle/Sun, one around Cisco… There’s an element of the front-office that we focus with dedication to our key partners. And then there’s the scale… finance, HR, legal, etc. to keep a very cost-efficient model in place because we do not have a totally-expansive line card that is trying to cover every tech provider out there.
I would tell you our top ten for Technology Services, our computer business, our top 10 supplier relationships represent over 80 percent of our revenues.
Channel Insider: What impact do you think the iPad will have on IT?
I don’t think it’s a one-hit wonder. I think it’s here to say – I’m a personal user… I don’t want to overly influence my answer here.
I think tablets represent are just a step on the evolutionary path. I believe that we’re going to have choices as consumers and as employees… there are going to be more invented we haven’t even named yet… smartphones, tablets, netbooks, notebooks and then you’ve got desktops and portables and docking stations. You’ve still got this range of options and what works best for your application and your environment… I’m not smart enough, nor would I ever attempt to figure out what will be more popular. All I see, I see a spectrum of device opportunities. Which form, function, features and benefits fit your world, and I think there will be adoption accordingly.
Channel Insider: What do you want solution providers to know about you and about Avnet as you take over this summer?
Hamada : Many of them do know me and I’m very proud of that, so number one, I would like to make sure I keep direct contact with our customers, even as CEO. By the way, many of them have my direct contact information and I would invite them to use it, when appropriate. Feel free to continue to do so.
I love being connected to the customers, and this applies across all of Avnet. That’s one thing I look forward to – just because I’m CEO doesn’t mean I’m changing that… as I said at the beginning, my most fervent desire for Avnet is that this transition is a smooth transition that does not give us any disruption in the current relationships. Roy and I are working very hard to make this like a relay race… that’s the vision we have for trying to do this.
I would encourage the customers to challenge us if they see any particular issues there, but we’re working very hard and have worked very hard to make sure there’s no opportunity for disruption. Let us know what you need from your value-added distributor. Where it’s going and how it’s going to get there is something we need to work out together… I intend to keep the voice of the customer a very top influencer in our decision making and resource distribution.