AAvnet CEO Bill Amelio sat down with Jeanne Yurman for Nasdaq’s View from the Top to discuss the Arizona-based technology solutions provider’s current business and growth strategy.
Amelio elaborates on how the evolution of technology has influenced Avnet’s customer base, and how his company utilizes artificial intelligence to analyze data and provide insights to customers. Furthermore, he shared reflections on Avnet’s 98-year history, the company’s impact on the global macro environment and embracing the Internet of Things (IoT).
The video above captures Amelio’s full conversation, which is detailed below in an abbreviated transcript that was lightly edited for clarity.
Jeanne Yurman: Digital transformation keeps moving along at a very rapid pace. Helping it along is Avnet. It is a global technology solutions provider based in Phoenix, Arizona. And joining me today for View from the Top is the CEO of Avnet, Bill Amelio. Nice to see you. Tell us about the company and what you do.
Bill Amelio: The best way to describe it would be this: Think about having an idea, a great idea, and you write it down on the back of an envelope or a napkin. We can take that idea, go into product production, full-scale production, harden the design, and lo and behold, you've got a product line.
Jeanne Yurman: That's amazing. And it seems like that's the direction that a lot of companies are going.
Bill Amelio: That's correct. I think the best way to think about it is that when we work with customers, we bring the world's technology in a cost-optimized, lead-time optimized way so they can have the best ability to be able to deliver their solutions to their customers.
Jeanne Yurman: Avnet has a rich history. There's not a lot of tech companies out there that can say that they're nearly 100 years old. I wonder if maybe you can share a little bit of the history of the company, where you started, and a little bit of the progression of the company?
Bill Amelio: Can you believe in 1921, we started right here in New York City, Radio City Row. Here we are today, a global powerhouse in 140 countries, 15,000 employees, and we went through so many different technology cycles. What I find fascinating is that if you think just back in the year 2000, how many companies were on the Fortune 500. Fifty percent of them are no longer there. To live 98 years, is truly a remarkable demonstration that we continued to learn how to adapt and change as the market changed around us.
Jeanne Yurman: Crypto is one way that Avnet is expanding. How or where do you see other areas where the company is going to expand?
Bill Amelio: I think one of the most exciting areas is the evolution that's happening with respect to IoT. Or maybe even revolution, you could say. Because by the year 2020, just in front of us, there will be 20 billion devices connected. By 2025, there'll be 50 billion devices. Avnet's right in the center of that. We are right in the epicenter of being able to provide a device, the gateway, the network, the cloud, the applications, the artificial intelligence to analyze the data and provide unique insights to customers.
Jeanne Yurman: What about the global macro environment? Of course, there concerns about Brexit, also China. How does Avnet navigate these things?
Bill Amelio: Our thought process is always this: we control what we can control, and we have contingency plans in place for things that we can't control. Let's take the two examples you brought up. China tariffs: we had to put in place a strategy where we minimize the tariff exposure to our customers. For example, we used to ship all the product from China into the United States, and then we would send it to regions in the Americas; Canada, Latin America, South America. What we had to do is start direct shipping from Hong Kong to those other countries, so they didn't pick up a tariff.
Brexit clearly caused an uncertainty in the market. We have 20% of our revenues from our business called Farnell that's in the U.K. Clearly this past quarter we saw a bit of a slow down because of that. We're hopeful, now that the date moved to October, that's created a little bit more certainty. We're hopeful that it'll be a deal that occurs that will be not a hard Brexit, but a soft Brexit, or something better for us.
Jeanne Yurman: Are there any particular verticals where you see IoT really exploding?
Bill Amelio: You can look at areas like smart factories, smart employees. You can think about automobiles, and you can think about precision medicine. I think all those are where you see great applications of IoT technology.
Jeanne Yurman: When you did come to the helm at Avnet, you came with loads of experience. Just a brief recap: you were IBM for a considerable amount of time in different roles, almost two decades if I'm not mistaken. You were also the CEO of Lenovo for a period of time, and just before Avnet, you were with CHC Helicopters. You have a wealth of experience, majority in tech. How did all of that experience inform the way that you're leading the company now?
Bill Amelio: Well, I've been privileged with having the opportunity to be part of transformation stories at all the companies that you mentioned. I bring to the company the ability to have a transformation playbook that allowed us to be able to pivot the company from what our core strengths are. Now we needed to pivot to other, higher-margin, higher-growth opportunities, and having a transformation playbook really helps out.
Jeanne Yurman: You've been at Avnet now three years. You have introduced bitcoin, you're pivoting the company to more of a service-oriented model. Where would you like to see the company in, say, the next one, two, three years?
Bill Amelio: I think we have a chance to really have a big first-mover advantage in the IoT space. I think with the rapid growth there, we have an opportunity to be able to not only provide the devices, but we can provide the gateways, the networks, the cloud, the applications, content providers, and then expand that to other system's integrators so they can build on our platform. I think that's going to be a great source of revenue growth for us in the future.
Jeanne Yurman: If I asked you how are you rewriting tomorrow, what would you say?
Bill Amelio: We've taken Avnet from a distribution company to a technology solutions provider. I think that's the most effective way to describe what we're going to do as a business moving forward.
Jeanne Yurman: Terrific. Well, I've really enjoyed speaking with you, Bill. Thanks so much for the time.
Bill Amelio: Thank you very much.
About Nasdaq View from the Top
View from the Top documents candid conversations and reflections with Nasdaq-listed company CEOs on business trends and innovations, corporate growth strategies, and matters of the market. These dynamic one-on-one conversations take place from Nasdaq’s global Client Experience Center, located in the heart of New York, in Times Square.
Avnet is a global technology solutions provider with an extensive ecosystem delivering design, product, marketing and supply chain expertise for customers at every stage of the product lifecycle. We transform ideas into intelligent solutions, reducing the time, cost and complexities of bringing products to market. For nearly a century, Avnet has helped its customers and suppliers around the world realize the transformative possibilities of technology. Learn more about Avnet at www.avnet.com.