avnet analyst day 2010 presentation 4 technology solutions
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Accelerating Your Success™1 Accelerating Your Success™
Avnet Analyst Day 2010
Performance & Potential
Avnet, Inc.
December 15, 2010
Accelerating Your Success™2 Accelerating Your Success™
Technology Solutions
Phil Gallagher
December 15, 2010
Accelerating Your Success™Accelerating Your Success™
Agenda
• Avnet Technology Solutions (TS) – A Global
Snapshot
• TS’ Strategic Imperatives
– Customer Focused Go-to-Market Strategy
– Global Scale and Scope
– Portfolio Management
3
Accelerating Your Success™Accelerating Your Success™
Demonstrating Sustainable Growth
We will create a
sustainable competitive
advantage and
profitability for TS
globally by developing
technology solutions that
generate value for the IT
supply chain.
Our Mission
Accelerating Your Success™
4-Year CAGR 13.2%
4
Accelerating Your Success™Accelerating Your Success™
Regional Revenue Mix Shift
4-Year CAGR:
Asia = 41.4%
EMEA = 17.9%
Americas = 7.3%
Q1FY11 includes Bell/Tallard5
Accelerating Your Success™Accelerating Your Success™
World-Class Supplier Partnerships
In Q1FY11, Avnet’s Top 10 suppliers* accounted for 73% of total revenue.
* Includes Bell Micro
We celebrate our supplier
partnerships every day and are
particularly proud of those that
achieve significant milestones.
6
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Outperforming the Market
Source: Avnet Data based on rolling 4 qtrs YoY growth- 1FQ11; IDC, Gartner, iSuppli – Oct 2010
0.8%
5.2%
14.6%
6.2%
12.0%
19.0%
0%
5%
10%
15%
20%
Services Software Hardware
Market Growth TS Revenue Growth
-16%
16%18%
11%
2%
23%21%
25%
-20%
-10%
0%
10%
20%
30%
40%
Proprietary Servers
ISS Networking Storage
Key Hardware Technologies vs. Market
Market Growth TS Revenue Growth
We are outgrowing the market in all categories -- software and services at an
accelerated rate, with hardware growth led by storage, ISS and networking.
7
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Demonstrating Market Leadership
Avnet is the largest value-added IT
distributor in the world, with $8.2B in sales
Avnet has the only global footprint among
its peer group
The industry recognizes Avnet’s thought
leadership with our SolutionsPath®
methodology
Avnet’s Global Solutions Centers provide integration capabilities that
deliver a differentiated end-to-end supply chain for data center solutions
around the world
The world’s leading suppliers of data center technology partner with
Avnet to attract and grow the most successful enterprise resellers
around the globe
8
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Executing Our Strategic Imperatives
1. Achieve targeted ROWC in all regions
2. Continue to build and leverage TS’ global scale and scope
3. Focus on high-growth technologies and verticals
4. Strengthen TS’ value-added solutions enablement model
5. Support customer, reseller and supplier migration to cloud-
based services
Market Focus
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Becoming a “Trusted Advisor”
11
Empowered consumers are
driving businesses to become
more agile, without compromise
Available, scalable, flexible,
capacious and secure
Legacy infrastructure is complex
and burdensome
Simplification, virtualization
New infrastructure can be quickly
deployed with virtual data center
assets (public or private cloud)
Line executives are challenging
IT to support new, differentiated
applications and service levels
The channel partner of the future
is a trusted advisor to their
customer – understanding not only
technology, but also its application
and its business value.
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Serving a Very Large and Growing Market
Source: Gartner, IDC & iSuppli – Nov 2010
$914$946
$984$1,034
$1,087
0
300
600
900
1,200
2009 2010 2011 2012 2013
US
$B
illio
ns
TS Served Available Market
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Vertical Growth
Technology Growth
Segmenting for Optimal Growth
TAM CAGR,
4.7%
0%
5%
10%
15%
20%
25%
30%
$0 $50 $100 $150 $200 $250
3 Y
r C
AG
R 2
010-
2013
2010 IT Spend
Go
vt &
Ed
u (
5)
Ban
kin
g (
4)
Ret
ail (
3)
Hea
lth
care
(2)
Uti
litie
s(1
)
Security (d)
Networking (f)
Mobility (b)
Storage (g)
Collaboration (e)
Virtualization (c)
Cloud (a)a
b
c
e
d
f
g
12
3 4 5
Source: Gartner & IDC Oct 2010
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Lin
e o
f B
usin
ess E
xe
cu
tive
s
an
d C
-Su
ite
De
cis
ion
Ma
ke
rs
Avnet interprets market needs, creates differentiated enablement programs and
aggregates products & services to help our partners become trusted advisors.
Extending the Value Chain with SolutionsPath®
• NetworkPath™
• VirtualPath®
• MobilityPath™
• SecurePath™
• StoragePath™
Fin
an
cia
lPath
™
Healt
hP
ath
®
Reta
ilP
ath
™
En
erg
yP
ath
™
Go
vP
ath
™
Market Focused
Customer Intimate
…with a repeatable, scalable enablement framework.
Industry, technology, application and customer expertise…
Avn
et
Serv
ices
Clo
ud
Read
y™
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Increasing Supplier, Reseller and End-User
Value
Envision – Enable – Execute with our proven SolutionsPath® methodology
“We continue to invest in helping our channel partners
deepen skills, deliver value to clients, and pursue new
opportunities for growth. We see that commitment to
growth reflected in Avnet's resources and programs that
they have developed to help IBM Business Partners sell
complete solutions that meet the business needs of
IBM's customers worldwide. Many of these programs
are among the industry best practices for our channel."
Rich Hume, general manager, global business partner and midmarket
organization, IBM
“Thanks to Avnet’s HealthPath® University and Internship and
the skills that we have been able to further develop with their
collaboration, we have the in-depth healthcare industry
knowledge that stands out to hospitals and medical facilities
and that quickly establishes us as trusted advisors.”
Jeff Teeter, vice president, vertical solutions, Logicalis
Analytics & market
opportunity identification
Strategic engagement & go-to-market strategy
Training and enablement
Demand creation
Service delivery
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cloud
/klaʊd/
–noun
1. a set of services and
technologies that
enables the delivery of
computing services
over the internet in real
time.
2. the delivery of IT
resources via a shared
network in the form of
applications (SaaS),
infrastructure (IaaS)
and platform (PaaS).
Assessing “The Cloud” Opportunity
“The Cloud” is growing quickly and could become a much more significant portion
of overall IT spend by 2014, with private cloud services outpacing public.
Traditional IT Products -- 5% CAGR
Public IT Cloud Services -- 27% CAGR
Private IT Cloud Services (prelim) – 36%
CAGR
Source: IDC 2010 (note: Private IT Cloud
Services are IDC's preliminary estimates)16
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Private Cloud – Avnet is Here, Now
Public, Private or Hybrid?
Legacy infrastructure predicates a slow,
deliberate migration to public cloud offerings
Private cloud solutions still dominate the
landscape in Avnet’s served market
Avnet is CloudReady™
Portfolio of cloud offerings from the world’s
leading technology suppliers
SolutionsPath® practices in all key cloud
technologies
Hosted/managed service infrastructure
Partner enablement services, including end-
user assessment services
PayNow™ financial program
Avnet occupies a unique and differentiated place in the value chain for
customers evaluation and migrating to cloud solutions.
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Public Cloud – Avnet is CloudReady™
Avnet is poised, in all regions of the world, to support our suppliers’,
partners’, and customers’ respective pace of public cloud adoption.
Infrastructure still reigns
Even in most emerging markets, IT/voice
infrastructure is still core
Cloud adoption is likely in back-office
functions, not mission-critical ones
“Voice of the Customer” still rules
Councils, conferences, polls, surveys
Avnet has its finger on the pulse of the
speed with which customers will move
The future is still unclear
The channel will always find its role and a
way to add value
We consider team, time and tempo in all
endeavors
Predicting the impact of the
internet 10 years ago is
analogous to predicting the
impact of the cloud today. Avnet
is positioned to succeed, along
with our trading partners.
18
Global Expansion
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Going Where the Growth Is
20
We continue to invest in markets that will provide the greatest growth
opportunity, organically and through value-creating acquisitions.
$946B
$984B
$1,034B
$1,087B
2010 2011 2012 2013
IT Spend Forecast North
America44%
Asia/Pac19%
Western Europe
17%
Latin America
8%
Japan4%
Eastern Europe
4%
Middle East/Africa
4%
New Growth Spend by Region
$141B
*Note: Data represents breakdown of net new IT Spend
Growth between 2010 to 2013
Source: Gartner, IDC & iSuppli – Oct 2010
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Extending our Global Footprint
Americas
$5.1B Revenue
17% YoY Growth
EMEA
$2.5B Revenue
16% YoY Growth
Asia
$1.1B Revenue
79% YoY Growth
Recent Acquisitions
Avnet Revenue & Growth based on Rolling 4 Qtrs Q1FY11
Bell Micro (NA, LAC, EMEA) ~~~ Tallard (LAC) ~~~
Datamation (Indonesia) ~~~ itX (Australia) ~~~ Sunshine (Vietnam)
Recent Acquisitions
Avnet TS-Served Countries
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NetApp Services
SyncSort
CommVault
Quantum
Apple (Latin America)
IBM (Latin America)
Riverbed
Oracle (Brazil, Mexico)
Oracle (Australia)
Dell (Vietnam)
HP (Vietnam and Indonesia)
NetApp (India)
VMware (Indonesia)
IBM (Indonesia, Vietnam)
Oracle (UK, Belgium, Luxembourg,
Switzerland, Ireland, Hungary, Slovakia,
Czech Republic, 16 countries in MENA)
HP (Hungary, UK)
Juniper (Poland, Czech Republic)
NetApp (Ireland, Netherlands, Germany,
UK)
EMC/Data Domain (Mostly Eastern
Europe)
VMware (Eastern Europe)
Avaya (Belgium, Ireland, Netherlands,
Poland)
ShoreTel (pan European)
Symantec (Ireland, UK, Netherlands,
Czech Republic, Slovakia)
Brocade IP (Eastern Europe)
HDS (France, Germany, Austria, Hungary)
Microsoft (UK)
IBM (Belgium, Netherlands, Turkey)
Asia
Americas
EMEA
We expand our line card to support our solutions distribution vision
and provide our suppliers global market reach and operational scale.
TS Global Line Card
Expanding Partnerships* for Global Reach
*Significant 2010 line card additions by region22
Portfolio
Management
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TS remains committed to value-based, portfolio management to
drive our committed financial returns in each region.
▪ Continue to drive
profitable growth
▪ Expand in LAC, with a
focus on improving
profitability
▪ Maintain strong regional
ROWC performance
Americas
▪ Continue driving toward
targeted financial returns
▪ Leverage and scale
regional expertise for pan-
European support
▪ Expand appropriately in
high-growth geographies
▪ Strengthen the line card to
support our solutions and
global growth strategies
EMEA
▪ Accelerate drop-through
with operational focus
▪ Continue to balance
expansion opportunity with
profitability
▪ Strengthen the line card to
support our solutions and
global growth strategies
Asia
Managing Regional Priorities
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Avnet TS had a strong recovery in FY10 and is delivering financial
returns within our targeted range.
Avnet is the leading IT solutions distributor in the world in scale and
scope with revenues over $8B and presence in more than 70 countries.
Avnet intends to continue to outgrow the markets we serve by investing
in high-growth technologies, vertical markets and geographies.
Avnet leads the industry with our SolutionsPath® methodology,
redefining the role of distribution.
Avnet maintains world-class supplier and reseller partnerships that
provide data center hardware, software and services solutions.
Avnet will continue to exercise value-based management across the TS
portfolio to achieve our stated financial targets in all regions.
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Q&A
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