Avnet Launches Paths For Energy, Financial, Retail Vertical Markets

Avnet Technology Solutions is expanding its SolutionsPath strategy to include the energy/utilities, financial services and retail spaces -- three vertical markets in which it sees significant opportunities for solution providers.

The distributor's new EnergyPath, FinancialPath and RetailPath programs will complement its existing HealthPath and GovPath initiatives focused on the health care and government markets, said Michael Houghton, vice president of vertical market solutions for Avnet Technology Solutions, Americas.

"Our suppliers are aligned on these verticals and we see a lot of opportunities for VARs. We did lot of homework to make sure that each one had a channel-friendly buying pattern," Houghton said from Avnet's IBM Partner Summit in San Antonio, where the announcement was made. "This is how we truly feel we can differentiate in the market. We're going through the entire process [with VARs]. We're looking for partners to get into these verticals and become the trusted advisor to those customers, not just someone giving you the lower price, but someone end users can look to help them solve critical business solutions and issues."

Avnet cited research figures estimating a $20 billion IT spending market for energy/utility companies this year because the market has "aged infrastructure," Houghton said.

"It's a bedrock of U.S. economic foundation. We are focused primarily on utility companies and smart grid. The government is putting stimulus dollars in IT to crate real-time information and two-way communication between utilities and consumers," Houghton said.

Next: Targeting Co-Op Utilities

In particular, Avnet plans to address the co-op utility space, of which there are close to 1,000 companies in the United States. "Some of them have already been working with reseller channel. Some of it is white space. A lot of co-ops are faced with big IT challenges," Houghton said. "It creates opportunities for our partners. It's similar to where health care was five or 10 years ago when it become more of an IT-led structure. Utilities are on the forefront. They are going through a transformation and for the next five to 10 years there is enormous opportunity."

Under Financial Path, Avnet plans to initially focus on banking customers. While financial services includes a much wider base, including insurance companies, Avnet will address those markets at a later date, Houghton said.

"The [banking] space is also going through a big transformation. They have big challenges with increased regulation, there's a lot of M&A withing banks and they have to keep up with technology for a higher level of customer service," Houghton said. Avnet believes there are almost 10,000 financial institutions that are "perfect targets for our partners," Houghton said.

Like the other two verticals, IT spending in the IT market is a tremendous opportunity, according to Avnet. Retailers will spend about $40 billion on technology solutions in North America this year, he said, and it's growing at about 5 percent each year.

Retailers Face IT Challenges

"Take away the big box retailers who go direct and there's about 2.5 million retailers in the U.S. That's a lot of space for our partners. There's a lot of dynamics each one is facing: financing, economic changes, how to engage with social media, mobile retailing. Figuring out what that means to a retailer can gain a lot of traction [for VARs]," Houghtons aid.

There's been a lot of interest in the new vertical strategies under Avnet's SolutionsPath initiative and Houghton emphasized that VARs should look to become a specialist in one of them to help differentiate themselves and get closer to clients in those markets.

"We don't look at this as a one-time event. When you're engaged with a partner, go down that path. It's a journey, an investment. It's a more strategic relationship. VARs need to figure out where they want to take their business and how far they want to take it. We can help them build a plan for assessments, roadmaps, education, demand creation, service offerings," Houghton said. "We want to make sure our partners know how far want to take it. "