Arrow ECS top dog parades $200m (run rate) cloudy biz
Ha! Thought disties have no role in new world tech? Born-in-cloud what?
Cloud computing is on track to be a $200m plus annual business for Arrow ECS, the enterprise IT distie's big boss has claimed.
The reliably boring firm - in a good way if you are an investor - notched up its umpteenth straight quarter of expanding sales, jumping nine per cent to $1.8bn for Q1 of fiscal ’17 ended 2 April.
Michael Long, holder of the triple crown - chairman, president and CEO - at parent Arrow Inc, said cloud sales grew 90 per cent in the quarter “exceeding most” of the “born-in-the-cloud” start-ups.
“Probably right now we are on about a little more than $200m run rate coming out of the quarter,” he told analysts on a conference call.
Long said Arrow “grew faster than the overall economic and IT spending backdrop”, claiming it has identified industry trends and invested in them “ahead of our competitors”.
He said that “pretty much across all [product] categories we’re up”. The company provided only a little colour to the mix - software was up 36 per cent, networking up with eight per cent, while sold state doubled.
Long claimed that while “others are seeing declines” in hardware and software, partly related to customer spending switching to the cloud, Arrow's cloud services created a “pull through” for its traditional business.
“The truth is, whether anybody calls it or not, cloud activity creates hardware and it creates hardware sales,” the chairman, president and CEO claimed.
The perceived wisdom among channel types when the cloud gained momentum was that it might be the start of the end for distributors, it still might.
Arrow ECS global honcho Sean Kerins told analysts that in “complex” data centres, “the applications and workloads associated with them are pretty sophisticated and highly integrated.
“And the truth is, we don’t see that they lend themselves to disruption easily from the public cloud model, certainly not as easily as some might suggest”.
This is leading to popularity of hybrid clouds which are now taken as the route most enterprise will travel, and is an area where the channel think they can play a part.
The Global Components arm of Arrow reported sales growth of ten per cent to $3.68bn, taking group sales to $5.47bn, up nine per cent year-on-year.
Group overheads went up 5.8 per cent to $5.29bn, leaving operating profit at $181.3m, up 2.2 per cent. Net profit after taxes and interest payments came in flat on the prior fiscal period at $106.2m. ®
Sponsored: DevOps and continuous delivery