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> Off The Shelf – Our industry is transforming. Are you?

by Phil Gallagher
President, Core Distribution Business,

Phil Gallagher is president of the core distribution business for Avnet. He leads the company’s broadline distribution business globally with three regional presidents reporting to him — spanning the Americas, Europe and Asia Pacific.

Gallagher began his career with Avnet in 1983 and has held executive leadership positions in sales, marketing and operations during his 30-year career with the company. He has served as president of both of Avnet’s business operations, the electronics component business for the Americas from 2004 to 2009, and the IT business globally from 2009 to 2014.

A past president of the National Electronic Distributors’ Association (NEDA), now part of the Electronic Components Industry Association, Gallagher received one of the organization’s highest honors, the Gail S. Carter Award, in 2009.

He holds a bachelor’s degree from Drexel University.

… the Internet of Things and the multitude of innovative capabilities born of “computing at the edge” will be the key to generating the kind of disruptive transformation needed to drive long-term business growth and deliver truly differentiated customer experiences.

In our fast-moving industry with consolidation, margin compression, shifting line cards and expanding customer demands, companies that stand still get left behind. Fortunately, new opportunities are everywhere — from the power of digitization, predictive analytics and artificial intelligence (AI) to low-cost support models and value-add solutions for customers of all sizes.

When you consider this burgeoning environment in the context of the current global economic landscape, with growth in 2017 estimated at 3.7 percent and 2018-19 forecasts of 3.9 percent, there are plenty of reasons for optimism in the global electronics industry. While everyone wants to take advantage of these brighter economic times, the question that we frequently hear is where do we invest to stay competitive and relevant as the requirements of existing and emerging customers continue to evolve?

At Avnet, we believe that the Internet of Things (IoT) and the multitude of innovative capabilities born of “computing at the edge” will be the key to generating the kind of disruptive transformation needed to drive long-term business growth and deliver truly differentiated customer experiences.

A trillion reasons to get excited

To appreciate the magnitude of these opportunities, let’s look back at some major technology shifts that have changed the course of the tech sector and, by extension, the global economy.

During the 1970s, IBM and other mainframe vendors sold tens of thousands of units each year. In the 1980s and 1990s, the market became saturated with personal computer manufacturers selling hundreds of millions annually. With the launch of Apple’s iPhone in 2007 and the first Android phone in 2008, we saw a billion-plus smartphones shipped globally each year.

Today, we are in a very exciting era with the global IoT market forecasted to grow from $2.99 trillion in 2014 to $8.9 trillion in 2020. Walking through CES 2018 earlier this year, we saw all kinds of amazing new IoT gadgets, and nearly every category of device got “smarter” thanks to AI and voice assistants such as Google Assistant and Amazon Alexa. We saw wall-sized televisions, razor thin laptops, autonomous electric cars and the world’s first smartphone with an in-display finger scanner.

The number of electronic components in these smart devices is increasing dramatically, creating a whole new ecosystem for our industry. Each and every one of us has an opportunity to stake our claim. I feel fortunate to have a front row seat to all the innovation and transformation taking place.

From top supplier partner to fast-growing global customer

One thing has become abundantly clear — the traditional “swim lanes” that once separated the various players of the technology supply chain are defunct. A great example of the blurring of lines within the technology ecosystem is illustrated by one of our longtime supplier partners, Molex. Acquired in 2014 by Koch Industries, Molex’s new parent company transformed the business to extend a solution strategy in 12 industries. Today, with 72 factories worldwide, Molex is one of Avnet’s fastest growing customers. As a global provider of electronic solutions that are integral to a diverse range of end products — from smartphones and electric cars to robotic surgery tools and the Mars Rover — Molex seized IoT and computing at the edge opportunity to form a new value proposition and propel business growth worldwide.

Taking ideas from kitchen table to market

The latest technology innovations also have served as a powerful enabler of a new legion of emerging customers in the maker community. Some of today’s most innovative and disruptive concepts are being developed by “recreational” designers in garages, dorm rooms and the kitchen table. We are also seeing new revenue streams for our industry coming from organizations that have not previously employed electronics, but are now seeking to remotely measure, monitor or control something. Farmers, for example, who have seen the technology in their tractors and equipment evolve, are now increasingly leveraging IoT, using low-cost sensors, drones and machine learning algorithms to improve farm productivity, reduce spoilage, monitor supply chains, manage water and much more.

Winners in our industry will adapt to customers of all sizes, supporting them with tools and resources needed to scale and take their products to market, including financing and infrastructure. Our customer, PNDULUM, is a fully integrated, consumer product development and innovation company. They came to us at the prototype stage with technology for a smart, self-cleaning duffle bag that deodorizes, sanitizes and “anti-bacterializes” clothes, shoes and accessories. Through our partnership, we helped them bring their product to market in just six months, versus the two years that they had originally projected.

Start your transformation journey

Ten years ago, I would never have dreamed that I’d be sharing customer stories like these. We are living in a time with so much innovation that it’s hard to know where to go next. But, go we must. The time is now for new partnerships and collaborations. Smart people everywhere are finding new ways to solve business challenges and improve how we live by leveraging technology to make products and services more efficient, cost effective and, perhaps most crucially, more valued.

While we talk about edge computing, AI and IoT today, who knows where the next technology shift might take us tomorrow? One thing is certain: I’ll be ready to adapt and embrace change so that Avnet can continue to serve as a trusted partner to our customers and suppliers. I encourage you to do the same.



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