Avnet Acquires HP Software Specialist Pepperweed Consulting

The acquisition will help Avnet, a Phoenix-based distributor, expand its services and software portfolio, according to Jeff Bawol, president of Avnet Technology Solutions, Americas.

Pepperweed was HP's cloud implementation partner of the year for 2012, Bawol said. "That skill set will help our VARs grow their businesses. It's helping our partners grow faster. We're very happy to have them as part of the family for that reason," he said.

Pepperweed was founded in 1996 and generated about $12 million in sales in 2011, according to Avnet. Over the last several years, Pepperweed has created a wide range of custom, on-demand and packaged services for HP's IT Performance Suite, Converged Cloud and Insight software tracks, which they have leveraged by forging relationships with other HP partners to deliver those services, according to Avnet.

About 18 months ago, Pepperweed also changed its business model to move away from traditional license selling to a model aimed at providing more profitable services on behalf of other HP partners, Bawol said. Pepperweed has partnered with more than a dozen HP VARs in that regard, he said.

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The deal marks Avnet's third purchase of a North American VAR this year. In March, the distributor acquired Ascendant Technologies, an Austin, Texas-based IBM solution provider, and a month later it introduced three new services stemming from that acquisition.

In January, Avnet acquired Canvas Systems, an asset disposal specialist.

"We don't see the acquisitions as buying three VARs. This isn't about Avnet buying VARs. They have some unique services that we are very interested in to help grow our HP services, our HP software and ultimately our HP hardware business through our VAR community," said Bawol.

That said, Avnet is still looking to acquire more services to offer to VARs, according to Bawol.

"We want to make sure we have the best services available for our partners. Over the last three or four years, we've looked around solutions distribution and vertical markets from retail to utilities. If you take a look at Pepperweed, they fall into some of those categories. That alignment has worked well for us. We talk about solutions distribution, and we know we need service capabilities to help partners do that. Other possibilities do sit out there," he said.