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Anniversary Avnet: Interview Phil Gallagher, CEO of Avnet

IoT can bring tremendous benefits, but with them come risks and the responsibility to keep them reliable and secure, says Phil Galagher, who took over as CEO of Avnet in late 2020.Anniversary Avnet

by Tim Cole

 

Avnet has come a long way in the past century from a small shop selling radio parts to a global distributor and a Fortune 200 company. How did it get here and where is it heading?

Avnet was formed in 1921 when the US government lifted its ban on private radio, prompting Charles Avnet, a 33-year-old immigrant fresh from Russia, to begin buying and selling surplus radio parts on Manhattan’s Radio Row. Then came antennas, connectors, and something epochal: calculating machines. Equipped with vacuum tubes adapted from radio, these computers, Charles proclaimed at the time, would alter human history forever – and he was right.

Anniversary Avnet: : Phil Gallagher - CEO of Avnet

Phil Gallagher, CEO of Avnet

I’ve been with Avnet for 39 of the company’s 100 years, and its people exemplify what’s enabled the company to withstand all of that change: adaptability, resilience, and perseverance. We’re still here because we’ve embarked on a continuous transformation alongside the ever-evolving technology market.
And while one hundred years is an enviable run, we prefer to think of it as a great start. Today, Avnet sits squarely in the middle of the technology value chain, with expertise in components distribution and deep knowledge of the global supply chain.

Avnet and Intel have partnered for five decades to help connect the world and enhance the way people interact with it.

Avnet was the first distributor to place a product order at Intel, which had just started producing its first microprocessor, the 4004. How has the relationship worked out?

In November 2019 we celebrated an amazing milestone with Intel leaders: 50 years of partnership! Back in 1969, Avnet (or Hamilton/ Avnet) placed its first PO with Intel for $170,000. Over the past five decades, Avnet and Intel have partnered to help connect the world, and enhance the way people interact with it. Our alliance is still going strong and I am confident that a new generation of Avnet and Intel leaders will gather again to recognize future milestones.

In the mid-eighties, Avnet was the number-one US distributor in semiconductors, computers, connectors, and passive components, but you were still just a national distributor. When did globalization hit?

In 1991, Avnet began its modern era of globalization with the acquisition of the Access Group, a UK semiconductor distributor. And in 1995, Avnet entered the technology distribution market with the acquisition of Hong Kong’s WKK Semiconductor. Our strategy was simple: grow organically faster than the markets we serve, and augment that growth with value-creating mergers and acquisitions. We have made small acquisitions as well as some of the largest in industry history. Each has enhanced our product or geographic portfolio while adding critical talented employees.
Today we operate in over 140 countries, with over 125 locations supporting over two million customers with 15,000+ employees. Avnet is always evaluating the needs of our customers and expanding into new areas as the market demands.

How is Avnet helping customers and suppliers build solutions to meet some of the fastest-growing demands in the marketplace, like connected IoT devices and automotive solutions?

As connectivity is built in to more and more of the technology we rely on, we are once again at a point of transformation for our industry, our suppliers, our customers, and of course for Avnet. Everyone’s focused on understanding how to build connected capabilities into their existing and new products, and Avnet is enabling both our suppliers and customers to succeed in this effort. We offer comprehensive solutions both above and below the cloud, thanks to the talented teams we’ve onboarded through several acquisitions in recent years. We now help companies around the world with engineering expertise, financing, product enhancements, marketing, and system integration, in addition to the physical distribution of technology products.
More specifically, in the automotive industry, there are more electronic devices than ever before for applications such as instrumentation and infotainment to cameras, radar, and lidar. The speed at which electrification is accelerating is amazing. To support our customers, whether it be a reference design, total ADAS (advanced driver assistance system) solution, or complex global supply chain need, Avnet has put in place global design and supply chain teams with expertise in the automotive industry to help get designs to market quickly and efficiently.

IoT can bring tremendous benefits, but with them come risks and responsibility to keep them reliable and secure.

Fundamentally, across many verticals, we act as an extension of our customers’ teams. They can leverage our deep technical and supply chain expertise throughout the product life cycle to maximize their return on investment. Companies turn to Avnet for two simple reasons: we save them money and help them grow faster, thereby accelerating their success.

The Avnet Silica division is one European semiconductor specialist of Avnet, Inc., and acts as the smart connection between customers and suppliers. Selling components is only part of your business, right?

Avnet Silica is the European semiconductor specialist division of Avnet, one of the leading global technology distributors, and acts as the smart connection between customers and suppliers. The distributor simplifies complexity by providing creative solutions, technology, and logistics support. Avnet Silica is a partner of leading semiconductor manufacturers and innovative solution providers over many years. With a team of more than 200 application engineers and technical specialists, Avnet Silica supports projects all the way from the idea to the concept to production.
Currently we’re redefining our strategy and structure to be an even more efficient organization. Our goal is to deliver for all stakeholders as technology and supply chains rapidly change. Our customers rely on us to help them stay nimble in the face of future volatility or even shocks like the pandemic. We are streamlining the business and getting emerging businesses like IoT and Avnet Integrated to drive demand for our supplier partners to accelerate higher-margin growth.

Avnet is deeply involved with Microsoft and their IoT offering especially around Azure. What about your own offering, IoT Connect, which leverages Microsoft’s Azure hybrid cloud computing service?

Avnet’s IoT Connect platform is a cloud-based platform, powered by Microsoft Azure, and it’s highly scalable to address common industry needs and challenges. The platform provides pre-built market-specific applications for quick solution development and data services to deliver customer insights and impactful ROI. In addition, it offers the security of IoTConnect-certified plug and play devices to simplify solution design. Plus, Avnet’s IoTConnect Partner Program enables system integrators and OEMs to accelerate and scale their IoT solution development by developing new device solutions and service models on the platform. With a standardized way to harness IoT and access to Avnet’s extensive suite of experts, developers can quickly build smart apps and solutions.

Security is critical – but are IoT solution providers addressing this problem adequately?

While IoT was a driving force in the wave of technological change a decade ago, security has been its greatest adversary. Avnet is working to ensure its customers’ IoT deployment will be stronger, more successful, and most importantly more secure. When thinking about IoT today and in the future, there are a lot of “nice to haves.” Security is not one of them. It needs to be built into IoT solutions from the ground up, across both hardware and software. We’ve seen how IoT can bring tremendous innovation and benefits to individuals, organizations, and societies. But with those benefits come both the risks and the responsibility to keep those systems reliable and secure. To do that we’re going to need to think, act, and invest differently.

Has the pandemic accelerated the IoT?

With the majority of people working remotely because of the pandemic, we want to be more connected than ever. The Internet of Things is becoming more intelligent, immediate, and interoperable. We are creating a world where everything that should be connected to the Internet is connected. Like the smartphone app economy, the Internet of Things is simply becoming part of life and business as we know it.

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