Avnet And IBM Tie the Knot For Mutual Growth

Avnet can hardly be blamed for being a little partial; after all, Big Blue has been a hot spring of revenue for Avnet Technology Solutions' distribution arm, which was recently renamed Avnet Partner Solutions, during the past two years.

"What has been unwavering is IBM's commitment to the channel," Avnet chairman and CEO Roy Vallee told an audience of solution providers during his keynote. "It's clear that we in this room are riding a winning horse."

Consider that IBM sales represented nearly $2 billion in revenue for Avnet's fiscal 2004 year, and that IBM server and software sales jumped 33 percent and 40 percent, respectively, over 2003. With the rise of IBM's channel business during the past several years, Avnet has quickly become the industry's largest and most prominent distributor of Big Blue's products.

It's quite a turn of events, considering that before 1995, Avnet had no ties to Armonk, N.Y., and didn't have a significant IBM revenue base to speak of until around the time the dot-com boom was ending. Rick Hamada, president of Avnet Technology Solutions, casually describes how he and several IBM executives "had a vision and were writing stuff down on a cocktail napkin" 10 years ago.

While other vendors had a presence at Ignition, IBM dominated the event from start to finish. More than two dozen IBM executives, including Donn Atkins, general manager of IBM Global Business Partners, and John Callies, general manager of IBM Global Financing, took the stage (the distributor even bestowed its first annual Avnet Award for Excellence to Denny O'Connell, an IBM executive who has helped manage and cultivate the vendor's relationship with Avnet for more than five years). It became clear that the message for the event was IBM's strong value proposition.

Big Blue brought substance to the event, introducing new programs and incentives for IBM resellers under Avnet Partner Solutions' umbrella. First and foremost, Avnet Partner Solutions officially launched the Avnet Integrated Marketing Solutions (AIMS) program, which is designed to offer resellers additional methods and tools to stay connected to current customers and build relationships with prospective clients as well. The AIMS program provides IBM resellers via a subscription-based system such tools as customized newsletters, co-marketing campaigns and hosted Webinars.

"VARs need to develop an ongoing dialogue with their customers and prospects," says Roger Arndt, vice president of marketing for Avnet Partner Solutions' IBM Americas' division. "This program helps them establish that connection with a variety of tools."

In addition, AIMS also offers a Renewal Portfolio feature for VARs that tracks their IBM Global Financing contract expirations, IBM Global Services maintenance contract data and other information. Avnet Partner Solutions' IBM division also reworked its IBM rebate-tracking system to give IBM resellers better visibility on rebate statuses and eliminate redundancies with IBM.

"The partnership with IBM is extremely tight, and they've integrated a lot of systems to make it easier on the resellers," says Stuart Huels, executive director of business development at Perficient, a software solution provider based in Austin, Texas. "They've both done an amazing job with some of their marketing and support programs, like Channel Connection, which is damn impressive."

Just how close have IBM and Avnet become? A good indication was their mutual courting of PeopleSoft at the event. The distributor has been exploring a major distribution agreement with Avnet, according to Avnet executives, and IBM has taken a prominent role in the discussions.

"We've got a serious dialogue going with them, and it's being led by our IBM team," Hamada says.

IBM is eager to see Avnet and PeopleSoft get together, according to sources at the conference. After all, PeopleSoft acquired JD Edwards, which was IBM's top ISV partner. In addition, both IBM and Avnet officials believe PeopleSoft's enterprise back-office applications will help drive sales for iSeries servers, which have been lackluster lately. Thus, IBM is helping Avnet sell PeopleSoft on establishing a major relationship with the enterprise distributor.

Now that's a partnership.