Avnet Expects Big Turnaround In Its HP Enterprise Business

Avnet executives made the bullish HP predictions at the distributor's annual HP Enterprise Partner Summit in Phoenix Wednesday.

Avnet executives said they saw an uptick in HP business during the company's fourth quarter ended Oct. 31. Avnet's fiscal 2005 began July 1, 2004.

"We expect to see aggressive HP growth going forward," said Jim Kleeman, vice president and general manager of the HP business unit at Avnet Partner Solutions (APS). "They have a new channel organization in place. They are listening much better and are quicker at adopting and resolving issues."

Among the issues HP has resolved are the supply chain problems that stalled product shipments during the summer and instituted a much quicker turnaround on providing solution providers with special bid quotes, Kleeman said. "They've gone from about four days to four hours," he said of the pricing quotes.

Rick Hamada, president of Avnet Technology Solutions, said Avnet did about $500 million in HP business during its fiscal year 2004. He said HP hardware revenue was up only 1 percent, even though industry-standard servers were up 33 percent and enterprise storage was up 19 percent.

"In the fourth quarter, HP got its supply chain issues straightened out and now we are seeing HP pick up share," said Steve Tepedino, president of APS America. "The transition from Kevin Gilroy (former vice president and general manager, HP Americas Solution Partners Organization) to John Thompson (Gilroy's replacement) has been pretty seamless. I think HP's channel is about to get a big boost [from Thompson]."

APS also announced at the conference that it has struck two new software alliances that should improve its HP business. The distributor said it was rolling out a bundled Microsoft CRM solution called ClientConnect. The bundle includes hardware, software and implementation services that allow solution providers to quickly deploy Microsoft CRM solutions.

Rick Rubenstein, president of RMS Business Systems, an HP solution provider in Buffalo Grove, Ill., said his customers are asking for CRM solutions that are easy to deploy, and the new ClientConnect should help him better deliver the solution to his enterprise customers.

APS next week is expected to sign a distribution agreement with PolyServe, Beaverton, Ore., to offer PolyServe's clustering solutions for Linux and Windows. The PolyServe Matrix Server product for Linux and Windows allows many industry-standard servers to appear as a single large multiprocessor system and also allows users to migrate large databases, such as Oracle running on Unix, over to industry-standard servers.