Electronics and IT distributor,
), is set to distribute software solutions related to analytics,
big data and enterprise mobility from
) in the U.S. and Canada per an agreement signed between the two
companies. Avnet will also distribute the SAP HANA data base
The current deal extends Avnet's existing distribution
agreement with SAP covering a number of countries in the Asia
Pacific region including China, India, Indonesia, Malaysia and
Singapore. Avnet has significantly boosted SAP's global reach
through its strong network of channel partners.
The current agreement is expected to place Avnet in a strong
position in the enterprise software market compared to its prime
). According to market research firm Gartner, enterprise software
spending is expected to increase 6.4% in 2013 and 6.6% in 2014 to
$304 billion and $324 billion, respectively.
Separately, Avnet's recent agreements with TechNexion and
) are also expected to expand the company's product offering. The
agreement with Cisco to distribute its high-value specialty data
center products in Latin America and the Caribbean is a positive
for Avnet and should further strengthen its core business of
distributing electronic components.
The TechNexion agreement will help Avnet to provide low-cost
and high-value embedded System-on-Modules to its original
equipment manufacturer customer base which will significantly
lower customers' costs and cut the product development cycle
We remain optimistic about Avnet's leading position in
electronics distribution, continuous cost cutting initiatives and
acquisition synergies. The company's acquisitions have been
prudent, enabling it to expand its product portfolio and add to
its revenue streams.
However, a sluggish macroeconomic environment coupled with a
tepid IT spending projection and competition from other
electronic component distributors remain headwinds, going
Currently, Avnet has a Zacks Rank #2 (Buy).
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