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Arrow ECS following value approach

Arrow ECS is following a mantra of selling value upstream as it looks to keep reaping the rewards selling security, networking and cloud with IoT also growing in importance

It can be quite glib to wave a hand and make a sweeping generalisation that everyone is going through digital transformation, including all tiers of the channel.

There has been plenty of focus on customers and increasingly resellers are also being asked to prove that they too are undergoing some transformation to ensure they are well placed to serve future needs.

There are also changes at a distribution level and each business is reacting differently to events. Talking to Eric Nowak, Arrow ECS EMEA president, and his colleague Jesper Trolle, vice president North West Europe and APAC, there is a sense of excitement about just how digital transformation will impact the day-to-day business.

"With digital transformation more and more we design tools to generate leads and bring some new kind of services to the partner community. We want to enable the partner to combine the new technologies and practices," said Nowak.

"It is exciting as a company because it requires skills and investments. It is never easy because the world is transforming so quickly," he added.

One of the strengths that Arrow ECS has going into this period of transformation is a strong vendor portfolio and relationships with a number of legacy vendors that are changing their products and approach to the market.

The other cause for excitement, as well as changing processes and the way resellers are supported, is the revenue opportunity that is being generated by customers.

"Digital transformation means increased spending and for IT players there will be more opportunities and we can move our value upstream," said Trolle.

"The channel can have different conversations. It is a much more complicated sale but of course it is exciting because it is an opportunity to add services," he added.

There has been a lot of talk about uncertainty, with Brexit looming large in any conversation with a plan-European channel player. With weak Sterling causing price rises the impact on a firm that sells plenty of US technology and reports in Euros has been something that the distributor has been forced to adapt to over the last seven or so months.

Nowak said that these trends have now been in the market for the last few months and there are signs that the same environment will remain for 2017.

On the Brexit front the expectation is that even after Article 50 is triggered in the next few days the process will take years. Even those hoping for a smooth untangling of the UK from the EU are prepared for a two year passage of discussions, arguments and then a final settlement.

"Everybody understands this process will take years. Short term and mid term people have to now live with that," said Nowak.

In terms of technology the areas of growth last year continue to be the same as well, with security, networking and cloud all proving to be sectors that the channel should invest some time looking into.

IoT growth
As part of a group that includes an electronics business Arrow ECS is well placed to be the route to market for IoT products that have been designed to be integrated into customers and vertical markets.

The plan is to source the components and by the time the products come to be a channel proposition they will have gone through various sanity checks across the Arrow Group.

"We are able to source the components and design and integrate all of those components. The ECS part is to help and and find the right channel to trade IoT. We can support every single actor and have a support platform 24/7 with all the strategy around IoT," said Nowak.

Later this year the distributor will launch an IoT partner programme and ramp up its activity around that part of the market.

When it comes to the competitive landscape there has been fairly consistent consolidation in the distribution market so moves by Tech Data to buy Avnet TS and Ingram Micro being bought by a Chinese outfit have not had that much impact on Arrow ECS.

"We will continue to move the value upstream. We don't believe the combination of Tech Data and Avnet will [have a massive impact] because it didn't before," said Nowak.

"We will always compete on value so for us it does not really change that," he added.

Looking ahead Nowak is upbeat with some of the weakness that was a feature of Eastern Europe last year is decreasing and it is going to be possible to look at the UK and the performance quarter on quarter with a established currency issues that will provide better comparisons.

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