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By | Paul Kunert 1st May 2013 16:32

Avnet welds services tentacles into one mighty arm

Octupus looks to get some knuckle in its punch

Distributor goliath Avnet Technology Solutions has rounded up its disparate portfolio of acquired service providers into one unit as traditional product sales continue to wane.

The Avnet Services team was created to "increase operational efficiencies" by merging the firm's software, lifecycle and training services operations.

"The IT services market is estimated to be $674.9bn, with a four-year compound annual growth rates of four per cent," said Avnet TS president Phil Gallagher.

"However this large growing market is underserved by the channel," he added.

In recent times Avnet TS hoovered up IBM reseller BrightStar Partners, Pepperweed Consulting, Mattelli and Ascendant Technology to repackage those firms' services for other resellers.

This puts the distie giant on a collision course with some of Avnet's larger reseller/integrator customers that directly sell software lifecycle or training services to customers, industry sources have claimed.

Avnet has previously defended this strategy, and building a services arm is an obvious move given the recent string of declining numbers coming out of the distie and its major rivals.

In its most recent results for fiscal Q3 ended 31 March, Avnet's profit slid more than 40 per cent and it introduced further cost cutting measures to counter the leaner market.

The timing of Avnet's services move, coming in the wake of those disappointing results may well soothe Wall Street's nerves and help to galvanise the share price.

Avnet TS declined requests for additional comment, citing the Labour Day Bank Holiday in Germany as the reason why its EMEA spokesman was unavailable. ®

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