Distributor looks overseas for better markets

So business might be slowing here in North America, but it isn’t in other parts of the world. And this may cause some disties to focus their efforts elsewhere. Avnet, for example, has some aggressive international expansion plans – and that may be where the money’s at right now.

The IT market in Asia is growing – and growing faster than any other market. So Avnet plans to concentrate its efforts there over the next 12 to 18 months. Case in point: in May, it announced the acquisition of Ontrack Solutions, a Mumbai-based systems integrator with expertise in security, networking, virtualization and storage solutions. The deal is expected to close by the middle of this month and will open the door for Avnet to build what it calls a “value-added solutions distribution business” throughout India.

It also acquired a Singapore-based distie called Azure, which focuses on IBM solutions, as well as ChannelWorks, an Australian security and networking provider. Then there are all those non-Asian-Pacific acquisitions, including U.K.-based distributor Acal for its IT Solutions Division and the European Enterprise Infrastructure Division of Magirus Group (which operates in seven European countries). And it’s just received approval to acquire European distributor Horizon, an acquisition it first announced in April, for its enterprise server, storage, networking and security solutions.

And that’s not all. Then there’s Source Electronics, which provides outsourced custom programming services with facilities in the U.S., China, Singapore, Mexico and Brazil. Source will become part of Avnet Logistics, providing international facilities.While Asia is still booming, other parts of the world are also open for business, including Eastern Europe and Latin America, and we may see more acquisitions like this from other disties looking to strengthen their overall business by doing more of it overseas.

Avnet is still considered a niche player, but when does a niche player become too big? The distie is on an acquisition binge that doesn’t appear to be slowing down any time soon. But will it be able to keep its core focus? The good news is that its acquisitions are focused on the same core technologies, with the same core vendors, so it doesn’t appear to be straying from its expertise. And strengthening its position in stronger markets can’t hurt either.

Overseas markets could help disties weather the economic storm here. But in order not to lose valued reseller customers, they have to stay focused on their core competencies, rather than spreading themselves too thin.

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Jim Love, Chief Content Officer, IT World Canada

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Vawn Himmelsbach
Vawn Himmelsbach
Is a Toronto-based journalist and regular contributor to IT World Canada's publications.

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