Arrow Snags $350M of Channel Business From Competitors, Lands Dell Enterprise Portfolio

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Arrow Electronics has closed on more than $350 million of annual business coming from other IT distributors, and has been authorized to carry Dell's enterprise offerings.

"In all my years at Arrow, I've never seen greater opportunities for our business than coming into 2017," said Chairman, President and CEO Mike Long, a 26-year Arrow veteran. "It's not an exaggeration, but a fact."

Long said the Centennial, Colo.-based distributor learned very recently that, effective this month, Arrow has been authorized to distribute Dell's enterprise offerings in all of the same markets where they carry EMC today. Arrow has worked closely with Dell around reverse logistics in North America, but the company has only historically been a distributor of EMC products in the region.

[Related: Arrow CEO: Avnet-Tech Data Deal Is Bringing More Partners To Us]

"Given the footprint we have with EMC, we certainly think that we have a good shot at some growth with that [Dell enterprise] line," Sean Kerins, president of Arrow's Enterprise Computing Solutions (ECS) business, told Wall Street analysts on Tuesday.

Kerins, however, said it's too early to predict how much revenue Arrow will generate from the new Dell distribution relationship given that it's still new and a few unknowns remain. Tech Data had been the only IT distributor authorized to carry both Dell and EMC products in North America, but distribution relationships are changing as Dell EMC rolls out its new, post-acquisition partner program.     

Arrow also has agreements in place to grab more than $350 million in annual business from other distributors in the coming quarters, Long said. The new channel business wins won't have much of an impact in the first quarter, Kerins said, with intake ramping in middle and late 2017. 

"We're bringing new VARs and MSPs in house, and doing more business with our existing customers," Long said. 

The distribution landscape has experienced lots of upheaval in the past year, with core competitor Avnet agreeing to sell its Technology Solutions (TS) business to Tech Data in September for $2.6 billion and the closing of Ingram Micro's $6 billion sale to Chinese logistics firm Tianjin Tianhai in December.

Additionally, Datatec Ltd. announced late last month that it's negotiating a material transaction, and sources told CRN the most likely outcome is the sale of $4.9 billion distributor Westcon-Comstor.

Kerins believes there are still more opportunities for the company to bring over sizable business from competitors thanks to the appeal of Arrow's differentiated approach, though he cautioned that it often takes a while to onboard newly-won business. 

"We're having a lot of great conversations with a lot of interesting channel partners these days, so we'll see how it plays out," Kerins said. "But we're confident [we'll win more business]."

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