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Avnet gets aggressive in the cloud

One of the more busy weeks for value-added distributor in its history

As the large Mexican-American population in Phoenix celebrated Cinco de Mayo (Mexican Independence), there was another more low key celebration happening at the Avnet Technology Solutions (NYSE: AVT), offices in the Arizona capital.

It all started with a significant agreement to acquire the Tallard Technologies, another value-added distributor focused on the Latin American market. But the more strategic announcement came a couple of days later when Avnet positioned itself in the cloud computing space with the introduction of CloudReady, a new initiative designed to prepare and enable Canadian channel partners and those in the U.S. to capitalize on emerging cloud computing growth opportunities. CloudReady includes education and training, financing solutions, professional services, technical resources and integrated cloud computing solutions that Avnet hopes partners can leverage to begin pursuing cloud computing opportunities.

According to Gartner Research, cloud services will be a $150 billion market by 2013. Tony Vottima, senior vice-president, solutions marketing and development for Avnet, said cloud computing is still evolving but it’s gaining momentum among businesses of all sizes as a flexible and cost-effective option. Cloud computing is a natural progression of the data centre investments that companies have been making for years, and it will significantly change the way resellers do business.

Vottima is on the mark with his comments. Cloud computing is gaining significant momentum. Consider this, NetSuite, a predominant direct sales organization and a pioneer in the Software-as-a-Service model, told CDN that its channel business has grown 40 per cent year-over-year because of the advantages around cloud-based services. Now NetSuite has a direct selling culture but even they realize there is no stopping the channel from delivering cloud-based services on mass; so instead they are committed to helping them. And, Avnet with its CloudReady program may have hit the channel community while the cloud wave is starting to form. Let’s face it, cloud computing is still complex and for a distributor to offer more education and outline recurring revenue models for the cloud it will help channel partners get started and grow even faster, which will enhance cloud’s momentum even further.

CloudReady will be part of Avnet’s SolutionsPath series of best practices for partners that include data centre, networking, security, storage and virtualization.

While the cloud initiative was truly strategic for Avnet, the company did not rest on that by announcing a distribution partnership with Hitachi Data Systems. Now HDS is a main vendor for Bell Microproducts, a distributor that Avnet acquired last month. Avnet also announced it has signed a pan-European distribution agreement to market and sell the products of Bluegiga Technologies Inc., Bluetooth developer.

Last week Ingram Micro reported better than expected revenue and this week, Arrow Electronics is doing the same. Arrow reported first quarter 2010 net income of $87.0 million on sales of $4.24 billion, compared with net income of $26.7 million on sales of $3.42 billion in the first quarter of 2009.

The company said that its first quarter performance “exceeded expectations for both sales and earnings per share.”

Meanwhile Synnex Corp. had to upwardly revise its current outlook for its results of operations for the fiscal second quarter of 2010 by stating that revenues, net income and EPS are each expected to exceed the top end of the distributor’s prior stated guidance for the quarter.

What does this all mean to the channel marketplace? Well these are positive signs of growth and we can all use some of that news.

Award Season

Ingram Micro earned the Cisco Worldwide Distributor of the Year award at the recently concluded Partner Summit in San Francisco. Synnex has been recognized with a Partner in Excellence award for HP Distributor Growth during the 2010 HP Americas Partner Conference in Las Vegas.