Business to Business

Marketing
Avnet Technology Solutions

Submitted on: 09/11/2009

Team 1, Marketing A

Ankur Garg
Chintu Agarwal
Kunwar Rohit Singh
Mandeep Singh
Poonam Rathi
Sharan Bhalla
Swati Agarwal
 INTRODUCTION

Information Technology is what constitutes the most important sector in the present day trend
of carrying out business. It is because we cannot be present everywhere to monitor the work,
but with networking and communications, we can always stay in contact with the other
business sites of ours. India’s development and contribution in world’s information
technology sector is of the highest reputation. India has become the favourite (most preferred)
destination of all the big banners like HSBC, Dell, Microsoft, GE, Hewlett Packard, and
several Indian multinational firms like Infosys Technologies, Wipro, and Microland who
have set up their offices in the country.

Technology is a broad concept that deals with an animal species' usage and knowledge of
tools and crafts, and how it affects an animal species' ability to control and adapt to its
environment. Technology is a term with origins in the Greek "technologia". However, a strict
definition is elusive; "technology" can refer to material objects of use to humanity, such as
machines, hardware or utensils, but can also encompass broader themes, including systems,
methods of organization, and techniques.

The information technology (IT) industry has become of the most robust industries in the
world. IT, more than any other industry or economic facet, has an increased productivity,
particularly in the developed world, and therefore is a key driver of global economic growth.
Economies of scale and insatiable demand from both consumers and enterprises characterize
this rapidly growing and developing sector, which shows no signs of slowing down.

Both software development and the hardware involved in the IT industry include everything
from computer systems, to the design, implementation, study and development of IT and its
management.

Owing to its easy accessibility and the wide range of IT products available, the demand for IT
services has increased substantially over the years. The IT sector has emerged as a major
global source of both growth and employment. The IT industry can serve as a medium of e-
governance, as it assures easy accessibility to information. The use of information technology
in the service sector improves operational efficiency and adds to transparency. It also serves
as a medium of skill formation.

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India's IT growth in the world is primarily dominated by IT software and services such as
Custom Application Development and Maintenance (CADM), System Integration, IT
Consulting, Application Management, Infrastructure Management Services, Software testing,
Service-oriented architecture and Web services.

The government expects the exports turnover to touch US$ 80 billion by 2011, growing at an
annual rate of 30 per cent per annum, from the earlier few million dollars worth exports in
early 1990s. Moreover, according to a study by Springboard Research, the Indian IT services
market is estimated to remain the fastest growing in the Asia-Pacific region with a CAGR of
18.6 per cent.

However, The Indian IT industry has seen a lot of negatives in the past year. The Satyam
debacle had shaken the confidence of global clients on Indian IT and left a scar on the face of
the IT industry, but the scenario is stabilizing again. Despite the uncertainty in the global
economy, the top three IT majors— Infosys, TCS and Wipro—have seen revenue growth
from all important sources of income: from the North American and European regions, in the
financial services vertical and from application maintenance and development (ADM)
offerings between fiscal years 2008 and 2009.

The Indian IT market is projected to expand to a value of nearly US$25bn in 2013, from an
estimatedUS$13.77bn in 2008, driven not only by business process outsourcing (BPO) but
also by a growing domestic market for hardware and solutions. Contributory factors include
low computer penetration, rising incomes, falling computer prices and the government’s
ambitions to connect the vast rural areas to the outside world.

The potential of India’s IT market is plain: less than 2% of people in India currently own a
computer -about one-fifth of the level in China - meaning particular potential in the lower-
end product range. The IT services sector remains critical to future market growth. According
to government figures, India’s BPO industry is likely to capture more than half of the
US$110bn global off shoring market by 2010. However, a recent government report
identified a strong challenge to India’s BPO dominance from other countries, including
China.

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 COMPANY OVERVIEW

Avnet is fairly new to the Indian Market, with having entered the country barely over a year
ago through the acquisition of a Mumbai based IT solutions provider – Ontrack Solutions
Pvt. Ltd. Avnet plans to use the popularity and the corporate image of Ontrack to its
advantage and sees it as the ideal stepping stone into the Indian Market. This can be
confirmed by an article that has been published on the Avnet parent website, which states that
Avnet Inc. has completed acquisition of Mumbai based Ontrack Solutions Pvt. Ltd.

Avnet, Inc. (NYSE:AVT) is one of the world's largest distributors of electronic components,
computer products, technology services and solutions in the world with more than 300
locations serving over 70 countries. The company markets, distributes and optimises the
supply-chain and provides design-chain services for the products of the world's leading
electronic component suppliers, enterprise computer manufacturers and embedded subsystem
providers.

Avnet has a wide range of capabilities including; maximising inventory efficiency, managing
logistics, assembling products and providing engineering design assistance for its 100,000
customers, accelerating their growth through cost-effective, value-added services and
solutions. For the fiscal year ended June 27th, 2009, Avnet generated revenue of $16.23
billion.

Avnet Technology Solutions is an operating arm of Avnet Inc., a fortune 500 company
which is one of the world’s largest distributors of electronic components, enterprise computer
and storage products and embedded subsystems.

Avnet Technology Solutions - worldwide is a value-added distributor of enterprise-

computing products, software and services with locations in more than 34 countries. As a
global technology sales and marketing organisation, Avnet Technology Solutions has sales
divisions focused on specific market segments and a strategy enabling an exceptional level of
attention to the needs of its customers and suppliers.

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THE AVNET VISION

In line with the company's vision statement, Avnet will deliver the highest value to our
customers, suppliers, employees and shareholders as the premier technology Marketing,
Distribution and Services Company, globally. The 21st century is sure to bring more
innovation, new services and newer technology, thus new products and services to sell. Avnet
will continue to shape and lead the markets in which it chooses to compete.

AVNET TECHNOLOGY SOLUTIONS - MISSION

―To lead our industry in growth, innovation, value and effectiveness in such a way that it
ensures we are an indispensable element of our suppliers’, customers’ and employees’
success and future dreams.‖

AVNET’S CORE VALUES

Integrity

Customer
Innovation
Service

Teamwork Accountability

Figure 1: Avnet Core Values

The whole of Avnet’s work culture is based on 5 core values that they religiously follow, no
matter which country they are operating in or which customer they are serving. That way,
they ensure that there is no discrepancy in the service rendered and the customer is treated the
same:

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 1. INTEGRITY:
They demonstrate honesty, respect for others and trustworthiness in all that they do.
2. CUSTOMER SERVICE:
They continuously seek to improve each customer's experience by listening and
striving to exceed their commitments.
3. ACCOUNTABILITY:
They each take personal responsibility for their commitments, actions and results.
4. TEAMWORK:
They work together to accelerate success for their customers.
5. INNOVATION:
They adapt to and create change in pursuit of success.

PORTFOLIO OF PRODUCTS & SERVICES

SOLUTIONS OFFERED BY AVNET

Avnet classifies itself as an IT solutions provider. This means, they provide IT infrastructural
remedies to companies / organizations that need them. They offer a wide array of solutions,
which includes all of the following:

1. VIRTUALIZATION:

As a leading distributor of today’s top virtualization technologies, Avnet is ideally positioned

to help its partners capitalize on this fast-growing market opportunity. They can connect the
partners to the information, resources, relationships and opportunities that they need to
deliver highly effective and profitable virtualization solutions that deliver measurable results
for their customers and accelerate their success.

The IT challenge is clear — simplify and optimise the partner’s infrastructure so that their
business can efficiently respond in a cost-effective way. With its extensive portfolio of
virtualisation solutions, Avnet can help partners build a resilient infrastructure optimised for
cost-effectiveness, simplified management and flexibility.

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They have a team of virtualisation specialists who can help their partners leverage
complementary approaches for:

Improving IT asset utilisation

Creating an available and resilient infrastructure

Enabling rapid response to changing business requirements

Employing virtualisation and system-management technologies to increase flexibility

and responsiveness

The unique nature of virtualization solutions has led to various market challenges that many
resellers are unaware of or unprepared to address, including licensing complexities,
integration difficulties and extensive training and certification requirements.

Avnet VirtualPath™ can help turn these challenges into opportunities by leveraging the
strengths of its unparalleled portfolio of training and certification programs, services,
expertise and partnerships with industry-leading technology suppliers.

2. SECURITY:

The IT security market is constant in its demand for immediate attention and resolution of top
issues and threats. New challenges constantly arise ranging from in-house security breaches
to catastrophic occurrences and compliance requirements. To stay ahead of the curve in this
dynamic environment, solution providers need a partner with the market knowledge and
solutions expertise necessary to help them deliver top security solutions.

Avnet SecurePath™ helps channel partners deliver unparalleled results in the ever-changing
security market through their portfolio of services, programs, expertise and partnerships with
industry. They enable these partners to deliver the key components of strategic solutions to
ensure that their customers are not impacted by security issues. The partners are the end
customer's trusted advisor and Avnet is their trusted source for leading security solutions.

The worldwide security market for products and services achieved a revenue level of $48
billion in 2008, and IDC currently forecasts this market to reach $82 billion in 2012—
representing a compound annual growth rate of 14 percent.

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Based on research from leading analysts, Avnet has identified four key focus areas aligning
training, programs and tools, resources, services and cross-supplier solution offerings that
position its partners for success in the security market.

Security &
Vulnerability
Management

Network & Web &

Security &
Endpoint Messaging
Compliance
Security Security

Identity &
Access
Management

Figure 2: Security Solutions offered by Avnet

3. STORAGE:

Information has never been more crucial to the survival of business. The explosive growth of
applications has resulted in a demand for higher levels of data storage and an increasing
dependence on information as a competitive differentiator. This application boom is making
data storage and management an essential component of corporate strategy.

As a leading distributor of today’s top storage technologies, Avnet is ideally positioned to

help its partners capitalize on this considerable market opportunity. They connect them to the
information, resources, relationships and opportunities they need to deliver highly effective
and profitable storage solutions that bring measurable results for their customers and
accelerate their success.

Avnet StoragePath™ enables their partners to deliver true storage solutions that utilize the
right combination of hardware, software and services to help their customers afford greater
utilization of storage resources, reduce costs, support business continuity or disaster recovery
imperatives and address legal and regulatory issues.

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4. EMBEDDED SOLUTIONS:

Avnet Technology Solutions provides customers with the technologies; expertise and supply
chain needed to quickly and successfully bring quality products to market. This is achieved
by integrating commercial off-the-shelf computing technology and customized components
with a wide array of value-added services to create custom solutions.

Complete Solution Lifecycle Support Customers Served

Engineering Solutions OEMs

Global Logistics ISVs

High – Flex Integration System builders

Post – Sales support System Integrators

Supply Chain Management VARs

Financial Services Others

Benefits Markets Served

Maximized asset utilization Healthcare

Reduced capital investment Education

Lower cost of ownership Government

Exceptional customer service and support Communications

Dramatically accelerated time to market Mil / Aero

Differentiated terms and conditions Security

Consistent product with revision control and Storage

end-of-life management
Table 1: Embedded solutions and their advantages

Customers benefit from the expertise and resources of the entire Avnet Technology Solutions
organization when working with any part of the company.

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5. UNIFIED COMMUNICATIONS:

IP Telephony has evolved from the early adoption phase and it has entered the end customer
environment. The era of unified communications is clearly upon us, and Avnet stands ready
to help its partners quickly and cost effectively bring these exciting new solutions to market.

At Avnet, they enable you to deliver the key components for unified communications
solutions by connecting you to industry experts, programs and technologies from the biggest
names in unified communications, including Extreme Networks, IBM, Microsoft, Oracle,
Sun (Mitel) and industry leader Avaya. By partnering with Avnet, one can quickly build new
revenue streams by offering their customers fully converged voice and data solutions that
help them get more out of their network investment.

6. MOBILITY:

For channel partners looking to take full advantage of the exploding interest in the mobile
computing and data collections market, you're in the right place. From hand held devices to
data collection to RFID and wireless networking, Avnet Technology Solutions offers the
proven products, services—including productivity-enhancing activation services—plus the
expertise and support you need to master the rapidly evolving mobile computing market and
exceed your profit goals and your customers’ expectations with the same sale.

DISTRIBUTION CHANNELS

As a leading distributor of computing technologies and services, Avnet Technology Solutions

connects its partners to more customers and more solutions. Our comprehensive suite of
services and established partnerships with leading technology providers, ensures that you
have the right combination of resources to capture new revenue generating opportunities.

THE CHANNEL PARTNER FRATERNITY

A channel partner is a person or organization that provides services or sells products on

behalf of a software or hardware vendor. Value-added resellers (VARs), managed service
provider (MSPs), consultants, systems integrators (SIs), original equipment manufacturers

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(OEMs) and distributors may all be called channel partners. Many companies, including CA,
Microsoft, AMD, IBM, SAP and Oracle, have formed channel partnership programs to work
more closely with the distributors for their products.

Channel partnerships provide an opportunity for companies to promote certain products or

services. In return, channel partners receive access to product and marketing training,
discounts, technical support, lead generation tools and beta versions of releases.

A value-added reseller (VAR) is a company that adds some feature(s) to an existing

product(s), then resells it (usually to end-users) as an integrated product or complete "turn-
key" solution. This practice is common in the electronics industry, where, for example, a
software application might be added to existing hardware.

This value can come from professional services such as integrating, customizing, consulting,
training and implementation. The value can also be added by developing a specific
application for the product designed for the customer's needs which is then resold as a new
package.

The term is often used in the computer industry, where a company purchases computer
components and builds a fully operational personal computer system usually customized for a
specific task such as non-linear video editing. By doing this, the company has added value
above the cost of the individual computer components. Customers would purchase the system
from the reseller if they lack the time or experience to assemble the system themselves.

Resellers also have pre-negotiated pricing that enables them to discount more than a customer
would see going direct. This is because a reseller has already qualified for higher tiered
discounting due to previous engagements with other clients, and the strategic partnership
between the vendor and VAR inherently brings the vendor more business. The VAR can also
partner with many vendors, helping the client when deciding which solution is truly best for
their unique environment rather than trusting each vendor who believes their solution is best
when it may not be the case.

A systems integrator is a person or company that specializes in bringing together component

subsystems into a whole and ensuring that those subsystems function together, a practice
known as System Integration. According to the Institute for Partner Education &
Development, systems integrators traditionally realizes approximately 50 percent of revenue
from consulting services and 40 percent of revenue from IT services in design,

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implementation and post-transaction consulting. They are different from an IT Consultant in
that they also take title to product.

A managed services provider (MSP), is typically an information technology (IT) services

provider, who manages and assumes responsibility for providing a defined set of services to
their clients either proactively or as they (not the client) determine that the services are
needed. Most MSPs bill a flat or near-fixed monthly fee, which benefits their clients by
providing them with predictable IT support costs. Many MSPs now provide many of their
services remotely over the Internet rather than having to perform on-site client visits, which is
time consuming and often expensive. Common services provided by MSPs include remote
network, desktop and security monitoring, patch management and remote data back-up, as
well as technical assistance.

The business model behind managed services was commonplace among enterprise level
companies, provided by large IT support companies such as EDS (Electronic Data Systems),
IBM Global Services, and Centerbeam. The model was later adapted to fit small to medium
sized companies by the value-added reseller (VAR) community as their existing model of
reselling hardware and software continually provided lower profit margins.

PEOPLE AND PROCESS STRENGTHS

Avnet connects more than 300 technology suppliers with more than 100,000 customers in
over 70 countries all around the world. Headquartered in Phoenix, Arizona, Avnet has been
in business since 1921 and was incorporated in 1955. Today, Avnet employs nearly 13000
employees and has annual sales of around $17.95 billion, around the globe.

Avnet Technology Solutions markets and sells enterprise and embedded technology products
from the world’s premier computer manufacturers and software suppliers, along with the
services and solutions that are needed to implement them efficiently and effectively. Avnet’s
relationships with diverse technology suppliers, including well established leaders and
emerging market innovators coupled with their rich services portfolio and the support of
more than 3200 Avnet Technology Solutions professionals around the globe, enables their
partners to become part of a worldwide network that enables them to profit from high growth
opportunities faster and with lesser investment, wherever they choose to conduct business.

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The partners believe that the distributor market in India is highly fragmented and lacks
professionalism. They think that the market is promising for a distributor who has strong
technical expertise. They think that the distributor plays a key role in terms of them
honouring their commitments to their customers. They believe that the market is evolving and
distributors that offer solutions are required. What they all believe in but is the fact that –
―Gone are the days where the distributor only served as a logistics partner. Now the market
demands have changed.

This turned out to be a fairly new concept for most of the partners. They think that it is a new
phenomenon that is yet to be experienced by the channel. Some of them think that Redington
has already started working in that direction since a long time, but still the market is fairly
open, as no one has given importance to solution base distribution yet. They feel that it is the
need of the hour as the needs of the customers are getting more and more complicated, and so
are the solutions. They think that it is still a fairly unequipped market and they are yet to see a
―Solutions Distributor‖.

The partners are looking for various value added programmes from the suppliers. They want
the suppliers to remain focused in the channels and understand the true value that these
channels deliver to their overall business.

MARKETING STRATEGY

The Avnet Solution does marketing for its business customers in the 4 main ways,

1. Personal Selling
2. Trade Shows
3. Magazine Ads
4. Brochures

PERSONAL SELLING

Avnet Solutions has a team of highly qualified, professional trained sales persons. These
sales representatives go to various companies, providing them information about the product
and giving them demo of the product. These representatives actually face of the company
and help a lot in growing and setting new bench mark for the industry.

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TRADE SHOWS

Avnet solutions has a long history to participate in trade shows globally, these trade shows
help company to reach a lot of there prospective customer. The Avnet keeps a demo version
and shows how it can help the company to reduce its cost and improve its efficiency.

MAGAZINES ADS

This is another tool which is extensively used by the company, company give the add in
leading magazines along with the add of the suppliers for instance it will advertise the
advantage of IBM new hardware and then it will give information how this will be used by
Avnet solution to create a totally customer oriented solution to satisfy there various needs.

BROCHURES

The company in off extensive use of print media for marketing its product. Its regularly prints
brochures and catalogue greeting all his resellers and telling how it helped them to transform.
There is now where the description of the product the company is offering in brochures but
just an greeting with there vision along with there address and contact no.

FACTORS DIFFERENTIATING AVNET FROM COMPETITION

Avnet, unlike its competitors, does not approach the end users / customers directly. Instead,
their sales team works with the channel partners and together they pitch the customers. By
doing so, Avnet generates sales for their partners, which increases partner loyalty. Also, the
Avnet sales personnel, due to their immense training and expertise, are able to decipher the
exact problem faced by each customer and deliver a customized solution through the channel
partners. They believe that there should be only one point of contact for each customer, and
that point of contact is the channel partner. Thus, it is evident that Avnet focuses more on
building and nurturing relationships with their partners, and through these partners, adding
value to the proposition for the customer. Avnet is the only Solutions Distributor that
provides assistance to its partners in the Logistics, Marketing, Financial areas and also helps
them in sales generation.

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 Avnet Others

Figure 3: Factors differentiating Avnet from Competition

The brand promise emphasizes our commitment to outperform competition.

Some features of Avnet – Listed below are some of the salient features of Avnet, which
have helped carve its image as one of the premier IT solutions provider around the globe:

Avnet is an efficient and cost effective sales and marketing channel helping
suppliers reach a broad base of customers

Avnet’s state-of-the-art logistics systems manage a high volume of transactions

and complex information flows to ensure accurate and timely product delivery

Avnet is an efficient manager of more than 300,000 unique parts in the technology
supply chain

Avnet’s supply chain management solutions reduce customers’ working capital

and inventory risk

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 Avnet’s value-added solutions for design chain management help customers
reduce cycle time and lower costs

Avnet’s experienced technical customer support teams ensure the highest quality
solutions and products are utilized by the customer

Avnet Key Facts – Here are some important facts about Avnet, which the reader should
know about, in order to get an idea about the company in general:

Fortune 500 company (ranked144)

More than 100,000 customers worldwide, including Godrej and Bayer Chemicals
in India.

More than 300 suppliers throughout the globe that include HP, Sybase, f5, Sun
Microsystems etc.

Does business in 70 countries

More than 300 locations

Ships more than 32,000 line items per day.

CONCLUSION

Avnet is a new entrant in our country but is already enjoying a good rate of growth. It has
revolutionized the IT infrastructure industry by christening itself as the first solutions
distributor in the country. It does not offer services, instead it offers solutions, and each
solution is unique in itself. Avnet has adopted a proactive, value adding process that helps
them to establish and maintain a healthy relationship with its clients. Avnet has brought with
itself its expertise and global experience, which it tends to exploit to its fullest potential in the
Indian market. Also, the fact that Avnet does not sell directly but through its channel partners,
who share an excellent rapport with the company, have made Avnet the leading solutions
distributor worldwide and have revolutionized the way in which companies regard their IT
infrastructure.

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