The Avnet Agenda: Top Execs Talk Cisco, Vblock, Oracle, Cloud

The Long View

Boy, has Avnet been busy in the last six months. It's added Cisco to its line card, watched the delicate dance of the Oracle-Sun acquisition from a front-row seat, bought up distributors like Bell Micro and others to broaden its worldwide footprint, and planted a firm stake in the ground with its CloudReady program that seems to say, "Damn right distributors have a role in cloud computing."

In a recent visit to Avnet's Phoenix headquarters, CRN had a chance to catch up with a range of Avnet executives on these many issues, including Phil Gallagher, Avnet Technology Solutions Global President, and Jeff Bawol, President of Avnet Technology Solutions, Americas. Here's a look some of the key issues top of mind for Avnet on the Technology Solutions side.

More Acquisitions

Avnet's recent acquisitions tear, which includes the pending close of its Bell Micro buy and the Tallard Technologies pickup, expands its presence throughout the world, especially in opportunity-rich geographies like Asia and Latin America. Expect them to continue, said Gallagher, (left).

"Our strategy around acquisitions is in three primary categories: does it strategically make sense, is it a good cultural fit and does it meet the financial goals we need to abide by?" he said. "Are there going to be more? The short answer is 'Yes.' Do we know when it's going to happen? Probably not. You date, you get to know each other for a while. They don't typically happen as fast as you'd like them to happen."

Vblocks Are Coming

Avnet is the first distributor authorized to sell fully configured Vblocks, the pre-tested, pre-configured virtualized data center packages being offered by the VCE coalition of Cisco, VMware and EMC. Vblock comes in three types of configurations that use Cisco's Unified Computing System and networking switches, EMC's Symmetrix or Clariion storage arrays, and VMware's vSphere server virtualization platform. According to Bawol, (left), the first Vblocks will be available in July.

"It's not a hard walk to get there," he said. "We're the only distributor that has Cisco, VMware and EMC, so it would be nearly impossible for anyone else to bring Vblock to life. We have agreements with Cisco to do the build for the Vblock products through our integration centers."

Bawol said that the NetApp infrastructure configurations with Cisco and VMware data center technologies -- not called Vblock -- are also on the way.

Go (Pre)configure

According to Bawol and Gallagher, Avnet's model of solutions-building is an ideal fit for Vblock and data center configurations like Vblock because so much of the data center deployments require custom configurations.

"This industry is known for trying preconfigured bundles, but what Cisco is finding is that there's a need for integration, and that the future of success for Vblock will be in the uniqueness and ability to configure it on the run. That's what Avnet brings to the party," Bawol said.

Bawol admitted that some VARs might be thinking, "let's configure it ourselves." But because each configuration could be slightly different, there's more value for VARs in getting a customized package from distribution, which carries all the products and can adjust as needed, he explained.

The turnaround time for configured Vblocks, Bawol noted, is expected to be a week to 10 days.

All Cisco?

Is Avnet going to become a full-fledged Cisco distributor? Well, technically it already is: it's no secret, Bawol said, that Avnet carries the entire Cisco product line. But according to Bawol and Gallagher, Avnet has no plans to start moving volume routers out the door.

"If all we're going to do is sell hardware, that's not what we're looking to do," Bawol said. "There's not a lot of value for us to sell networking product on behalf of Cisco. They have great partners who do that for them already, and we don't want to be in the low-value transactional end of the business."

But if Avnet customers want Cisco product from Avnet, they can get it.

"They can, if they have to," Gallagher said.

Managing 800-Pound Gorillas

When Avnet added Cisco as a supplier partner, the executives noted, they went to HP and IBM and made sure everyone knew up front what was going on.

"The key wih partners is never surprise 'em," Gallagher said. "The Cisco business is completely separated from our other business units. None of them can reach in and see the others' backlog and the others' VARs. We can't control everything they do but we have business plans with each, commitments to each and continue to grow with each. Distribution is a balancing act."

The cultural fit with Cisco, Gallagher added, "has been a very good relationship" and Cisco has made substantial investments of time and money in Avnet's model.

Looking To Add?

If there are holes or gaps in Avnet's line card, the executives said, they're more likely in services opportunities than in specific product lines. The distributor will commit heavily to its core, powerhouse vendor partners, and, Bawol said, not get "distracted" by data center gadgets. ' "The whole premise of solutions distribution from us has been to get to the data center, and we haven't been too shy about that," Bawol said. "There are multiple routes to market to get to the data center, so as we get there, we have to ask open-ended questions. We don't want to be attracted by the shiny new object that technologically is very cool but not a great part of the big picture data center. We can't allow ourselves to get distracted."

"Stay tuned for a lot more on the services aspect," Gallagher added.

The Oracle Question

Speaking of balancing acts, Avnet has a doozy on its hands with the evolving Oracle-Sun relationship. Oracle is increasing the size of Sun's direct sales force, but also expanding Oracle PartnerNetwork Specialized programs to be Sun-centric. How is Avnet eyeing the moves?

"Is there a concern? Yes? Are we watching it closely? Yes. And if Oracle-Sun were sitting here with us, we'd say the same thing," Gallagher said. "What we need to do is see where their strategy is going and align to their strategy. We're a distributor. That's our job. Is there a risk to our business, sure, and we're still trying to evaluate that. But there are unique opportunities around the world, and Judson [Althoff, Oracle's channel chief] added a strategic team to service Avnet around the world. Plus, as they get out of certain OEM agreements, we still have, for example, HDS."

Don't Panic

Bawol added that Avnet has no plans to change the way it does business with Oracle.

"We've taken the tack to leave the team whole," he said. "We need to do that for the benefit of our VARs, and we think it would not be in their best interests to just guess at what the outcomes are going to be. That would be wrong and would put them in a precarious situation."

Expect some bumps along the way as the Oracle-Sun strategy plays out, the executives advised.

Ready For CloudReady

One of Avnet's most-discussed new ventures is CloudReady, a host of cloud-based offerings along with training and financing centered on cloud computing solutions. Tony Vottima, senior vice president of solutions marketing and development, declined to provide information on which newer cloud vendors are part of CloudReady, but said that most of Avnet's core tier-one vendor partners, from HP to IBM to Cisco, will be involved.

"Our number one focus is knowledge transfer: what does the reseller need to know, and is there a threat or an opportunity?"

The advice Vottima gives to VARs nervous about the advent of cloud solutions is "Run toward it, not from it." Cloud solutions don't mean the end of hardware sales by any means, he said, and Avnet's role as a distributor involves managing expectations on cloud while steering VARs toward cloud opportunities that suit them.

A Cloudier Channel

Beyond solutions configuration and matching partners to cloud vendors, one way Avnet can really help, Vottima offered, is channel evangelism.

"We have a lot of new companies who come to us and want to learn more about the channel," he said. "A lot of them aren't sure why it's so important, which is what makes it an opportunity. The relationships are changing, and they want us to help build channels for them."