ITdistri recently met Patrick Zammit, Global President for Avnet Technology Solutions, and interviewed him on the impact in the EMEA region of the latest acquisitions and announcements of the distributor.
ITdistri: your are launching only now your cloud marketplace, behind your competitors. Why only now?
Patrick Zammit: the most important is not to go fast, but to be steady to win the race. We have observed the evolution of the market, to answer perfectly to the user needs. We have determined that the hybrid cloud (including both private and public parts) was the future. Historically, we are very strong on the private cloud infrastructure market. So we just needed to build our application platform, in order to offer ways for our customers to optimize their information systems, thanks to public cloud services. By starting late, we have been able to choose the best which has been done on the market, and to add our own tools, especially regarding invoicing. We want our customers to have an absolute control on their cloud usage, so they may decide when and how to switch to a private cloud platform if necessary while keeping a large flexibility on their public cloud subscriptions. According to our studies, this is a differentiating factor in sales points. Regarding vendors, we have signed worldwide distribution partnerships with major companies such as IBM (Softlayer) and Amazon (AWS). Our platform, which is also available in a white-label version, has of course been built to be able to include local vendors. This will allow our European offices to sign local distribution deals, whether for IaaS, SaaS or even, who knows, cloud-based enterprise management solutions. We will also offer to our partners tools that allow them to define precisely what they can virtualise, and what can be placed in private or public clouds. These tools will allow them to optimise the flexibility they need, according to their budgets.
ITdistri: other major distributors have decided, for cost cutting reasons, to centralise some backoffice functions in Eastern Europe, like Westcon in Romania or Ingram in Bulgaria. Does Avnet have similar plans?
Patrick Zammit: this is not a major issue for us, for the time being. We think that such centralisation projects lead to an important loss of competences. Nevertheless, we do have already centralised some functions. Sales management for France, Italy and Eastern Europe is based in Poland, while Germany and the United Kingdom manage their own sales locally. All financial flows with vendors (purchase and stocks) are managed from Belgium, as well as logistics, cashflow, taxes and our pan-European integration centre. We currently do not have plans for more reorganisations than that. At Avnet, we believe more in our Competence Centres. To day, we already have two of them: a Security Competence Centre in the Netherlands, and an Information Management / Business Analytics Competence Centre in Germany. A third Competence Centre is already planned, for cloud issues. Their task is to define solution-oriented offers, as well as their implementation. The centralisation ends at the definition of a core offer and program, which is eventually adapted locally by each Avnet country team.
ITdistri: what about Orchestra’s acquisition?
Patrick Zammit: we have acquired Orchestra to become a major EMC distributor in Germany. Orchestra has developed a predictive tool which allows resellers to intervene before the servers of their customers either fail or reach saturation. This service is managed from Croatia. It will be expanded, in order to be used in all the European countries where we are official EMC distributors. The former Orchestra Croatian office, which is not to be moved to Germany, will ultimately become our EMC Competence Centre.
ITdistri: even if you do no work on it anymore, can you explain us the reason of the Silica-Memec merging?
Patrick Zammit: I know very well this subject, as I have long worked for Avnet electronic business. The idea behind this reorganisation is fairly simple: Memec is focussed on niche products, while Silica is specialised in broad-usage electronic components. By merging the two structures, we allow Memec vendors to reach a much broader customer base than previously.
ITdistri: after having acquired the EEC business of struggling Russian multi-specialist RRC, Ingram has very recently been acquired by a Chinese company. Anything planned, on your side?
Patrick Zammit: we will of course acquire more companies. But we are very mindful about compliance issues, to keep in line with the American legislation. So, anything new regarding this will be announced in due time…
Distributor Westcon has revealed a business process outsourcing (BPO) firm with operations in Romania will take charge of some of its EMEA finance and operations functions. Parent company Datatec announced yesterday that 300 of Westcon's 1,900 EMEA staff would be affected by a "BPO transformation" of its EMEA operations.
Westcon senior vice president David Grant revealed a phased migration of the functions in question will occur between now and mid-2017 and insisted service levels for resellers would not be affected. Although Grant was not in a position to divulge Westcon's BPO partner, he described it as a global outfit "in the top-right of the Gartner Magic Quadrant". "We separated our activities into those we see as transactional and those that add value to the customers and vendors," he said. "Anything that is very transactional we have decided to outsource to another organisation as it gives us scale and efficiency."
The outsourcing project will run alongside Westcon's impending European implementation of a global SAP project, Grant said, adding that affected employees may be offered other roles in the organisation. "It is not a case of everything changing on day one," he said. "Where roles are affected we will give people significant advance notice, as it's the responsible thing to do. We are growing, and while some transactional roles will be eliminated from the business, some new opportunities will be created so we will take as much time as we can to retrain and redeploy staff where it is appropriate to us."
Westcon, which operates through the Comstor and Westcon brands, has order-processing staff in 42 countries in EMEA, Grant said, adding that any staff whose roles are displaced will be offered the choice of staying on to help with the migration. Employee and other fees associated with the migration will cost parent Datatec about €11.5m in its current financial year.
Rival distributor Ingram Micro centralised more EMEA back-office functions to Sofia in Bulgaria last year.
Grant said it made more sense for Cisco, Avaya, Polycom, Juniper and Check Point partner Westcon to partner with a BPO outfit with knowledge of the region. "We have chosen an organisation where it is their core business to provide business processes and support," he said. "We are not experts in sourcing a facility or finding local language specialists and training them on what we do."
Romania, which is where the BPO firm in question will carry out Westcon's transactional work, was ranked fourth in an index of the top global BPO locations this year carried out by Cushman & Wakefield, behind Vietnam, the Philippines and Bulgaria. Grant emphasised that Westcon's "core value-add" will be retained in-house and claimed that neither customer service levels nor its ability to execute would be affected by the move. "Our top 10 vendor partners have all offered to make sure there is good knowledge transfer and are helping to train our BPO staff," he said. "If you think about it, most of our major vendors have some part of their organisation that is outsourced so are completely familiar with what support they can give us."
Graeme Watt, EMEA president at rival distributor Avnet Technology Solutions, confirmed his company has also made some steps towards centralising transactional functions, "but nothing like on the scale we are seeing with Westcon". "It is fair to say that everybody is looking to see how much of that non-technical, more run-rate, transactional operations they can centralise," he said. "We have been talking about it for a while and we will centralise functions and operations where we think it makes sense and keep things local where we think it makes sense." (source: Channelweb United Kingdom).
American distributor Avnet has promoted Patrick Zammit to serve as global president for Avnet Technology Solutions, one of two global operating groups within Avnet. Zammit previously served as president of Avnet Electronics Marketing EMEA. Zammit will be responsible for the strategic direction, day-to-day operations and performance of the group globally. Zammit's appointment is effective immediately, and he will report directly to Avnet Chief Executive Officer Rick Hamada, succeeding Phil Gallagher. As a global IT solutions distributor, Avnet Technology Solutions transforms technology into business solutions for customers around the world. It collaborates with customers and suppliers to create and deliver services, software and hardware solutions that address the changing needs of end-user customers. The group serves customers and suppliers in North America, Latin America and the Caribbean, Asia Pacific, and Europe, Middle East and Africa. It generated €8.3 billion in annual revenue for fiscal year 2014. Zammit began his career with Arthur Andersen and joined Avnet in 1993. He held a series of positions in finance, operations and strategic planning and served as president of EBV Elektronik, an Avnet company, before being promoted to regional president of Avnet Electronics Marketing EMEA in 2006. He graduated from the Business School ESLSCA with the French equivalent of a master's degree in business administration. Zammit succeeds Phil Gallagher who remains with Avnet to help ensure a smooth leadership transition.
Avnet eyes return to European M&A scene
After taking a break to "digest" its latest acquisitions, American multispecialist Avnet could be set to get back on the M&A trail in Europe next year, with converged systems, security, and licensing renewals earmarked as key target areas. The firm has not made any buyouts in Europe for a year, since the acquisition of German embedded electronics specialist MSC. A voluntary hiatus as the distributor seemingly needed time to digest Magirus, the last major acquisition in the past seven or eight years. Now that is its ready to enter the M&A arena, Avnet may look to turn its focus towards different areas. The future deals are geared towards new competencies and higher-value market areas, such as onverged systems, security (on a pan-European basis, especially around Cisco and RSA), license renewals and services (source : Channelnomics EU).
Avnet loses its President
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Avnet Embedded Sverige
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