Avnet 2000 Annual Report Download - page 14

In his first full year as president, Andy Bryant has driven
further expansion and record growth for Avnet Computer
Marketing (CM). FY’00 did, however, begin in a continued downturn due to Y2K-related
compliance issues and slowdowns. By the end of the second quarter, however, CM
began to experience significant recovery in its overall business. CM markets enterprise
servers, software and storage to value-added resellers (two-tier distribution model) and
predominantly large end users (single-tier model).
Despite the lingering effects of Y2K, as Avnet CM entered the second half of the
fiscal year, sales of storage products, enterprise database software from Oracle and
multi-processor Intel Architecture servers from major OEM suppliers boomed as the
e-business revolution accelerated.
From recovery, CM posted solid results. Achieving a 19.8 percent increase over FY’99,
CM’s sales reached $1.86 billion. Throughout the year, as changes occurred in the
distribution landscape, CM took an offensive position, expanding its physical presence on
three continents. In Asia/ Pacific, Avnet completed the acquisition of Integrand Solutions,
Compaq’s largest single-tier distributor in Australia, which was integrated into Avnet
Computer. On the European front, Avnet acquired PCD Italia S.r.L. and Matica S.p.A., two
of Italy’s leading value-added technical distributors of IBM AS/ 400 and RS/ 6000 com-
puters, IBM printing, storage and software, SUN workstations and Hewlett-Packard
servers, with combined revenues of $120 million in 1999. IBM appointed Avnet CM as its
distributor in France, a country which boasts high usage of information technology. In July
of FY’01, Avnet also acquired Savoir Technology Group, Inc., the leading North American
two-tier distributor of IBM midrange server products, with calendar 1999 revenues of
$767 million. Savior is the largest acquisition ever for Avnet Computer Marketing.
The addition of Savoir positions Avnet CM as the number one global value-added
distributor of IBM midrange computing products and establishes Avnet’s first $1 billion
worldwide supplier relationship.
REBRANDING
At the close of FY’00, Avnet Computer Marketing and its operating divisions committed
to a worldwide rebranding effort that consistently emphasizes the Avnet name and
Avnet Computer Marketing’s core competencies, which are customer-focused, solutions-
AVNET CM
SALES BY PRODUCT
Hardware 83%
Software 11%
Services 6%
0.5
1.5
2.0
CM SALES GROWTH
00
999897
96
billions
.8
1.1
1.4
1.6
1.9
based offerings around enterprise servers, software and storage products. CM’s
mission is to be the global value-added leader in the information technology distribution
marketplace, by building channels to market for its suppliers and providing the highest
level of satisfaction to its customers.
Moving forward, all divisions will be referenced under the parent brand of Avnet Computer
Marketing. Hall-Mark Global Solutions has become Avnet Computer Marketing, Hall-
Mark Division (Avnet Hall-Mark). Avnet Computer has been rebranded Avnet Computer
Marketing, Enterprise Solutions Division (Avnet Enterprise Solutions). Avnet Convergent
Technologies (formerly Penstock Point of Sale) is now known as Avnet Computer
Marketing, Convergent Technologies Division (Avnet Convergent Technologies).
The rebranding is expected to result in a more consistent marketing presence, while
leveraging the most valued brand in distribution – Avnet.
AVNET HALL-MARK (NORTH AMERICA)
The Avnet Hall-Mark team faced one of their most challenging years ever in FY’00. As
FY’99 ended, supplier partners were building very different strategic channel models.
Dedication of resources from their distributors became a requirement. These changes
in the marketplace were turned into opportunities. The business was reorganized in
June 1999 to accelerate focus and sales growth for suppliers. Specifically, dedicated
Product Business Units (PBUs) were organized to support Compaq, Hewlett-Packard,
IBM, Software, Storage and Services. The most dramatic area of growth was in the soft-
ware business unit where revenues exceeded $160 million — or 450 percent year to year
growth. Hall-Mark’s overall North American business posted top-line annual revenues
of over $950 million.
Hall-Mark also successfully responded to Hewlett-Packard (HP) and its Channel 2000
(C2K) challenge – a program designed to audit the supply-chain efficiencies of its dis-
tribution channel strategy – the most significant test of Avnet Hall-Mark’s value to date.
Avnet Hall-Mark was ultimately selected as one of only two midrange channel partners.
Avnet Hall-Mark, North America, takes a commanding lead into FY’01 as the bench-
mark performer for solutions distribution.
AVNET HALL-MARK, INTEL ARCHITECTURE SERVER BUSINESS
UNIT (FORMERLY HALL-MARK INTEGRATED SOLUTIONS)
In its first complete year, Avnet Hall-Mark’s two-tier Intel Architecture (IA)-focused
business unit enjoyed tremendous growth. Sales more than doubled year to year, from
Avnet Computer Marketing’s
new global headquarters, a
132,000 sq. ft. facility at Arizona
State University’s Research Park,
Tempe, Arizona.
25
AVNET COMPUTER MARKETING
In the Avnet Integration Center,
complex IBM RS6000
configurations are built and
customized every day to
customer specifications.