Volume 20, Number 38 -- November 7, 2011

Arrow Electronics ECS Unit Keeps Humming In Q3

Published: November 7, 2011

by Timothy Prickett Morgan

Last week, we told you all about how the IT distribution business of master reseller Avnet did in the third quarter, and this week, it is time to take a gander at what is up with its rival Arrow Electronics, which is also a big distributor of IBM systems, storage, and software.

In the quarter ended in September, the Enterprise Computer Systems group at Arrow grew by 26 percent, to $1.54 billion, and it even managed to grow its operating income by 51.4 percent to $53.7 million. The electronics components distribution business, which is larger at $3.65 billion, grew a lot more slowly at 6.1 percent, but had an operating income of $194.2 million, down a smidgen from the year-ago period. Add it all up, and pay the taxes and other expenses, and Arrow had sales of $5.19 billion (up 11.4 percent) and net income of $132.2 million (up 11.6 percent).

Michael Long, who is president, CEO, and chairman at Arrow, said all of its system lines, including proprietary machines (mostly small IBM System z machines and Power Systems boxes running AIX and IBM i but also including X86 boxes and storage), drove ECS to the high-end of the revenue and profit guidance that Arrow had previously set for the third quarter.

In a conference call with Wall Street analysts, Long said that Arrow had just signed a distribution agreement with switch maker and IBM partner Juniper Networks, which would help bolster its sales into the data center. "We are focused on several growth opportunities including the addition of new suppliers, the penetration of new market segments, and the expansion of our services portfolio," explained Long." In particular, our midmarket initiative has seen great success as we've increased our market penetration in this segment and expanded our customer base."

Well, that is always good news. But the question is what platforms is Arrow peddling in the midrange? Hopefully the IBM i platform is getting some love and attention, not just Windows and Linux. Andy Bryant, who runs the ECS unit, said that proprietary server revenues were up 18.4 percent, compared to just 6 points of growth in "industry standard" servers, by which he meant X86 machinery. (I really don't like the term "industry standard" any more than IBM likes the term "proprietary.")

Long said that Arrow expected for enterprise IT spending to "remain solid" in the fourth quarter and Arrow was longing forward to a "seasonally strong" fourth quarter. Looking ahead, Arrow expects for ECS to bring in between $2 billion and $2.2 billion in revenues and total sales to come in at between $5.29 billion and $5.69 billion. Earnings per share should be between $1.25 to $1.37, which is anywhere from 3 to 15 cents per share better than what Arrow did in Q3.

Arrow was not about to make any solid predictions about how its business would do in 2012, but Long said that he was expecting IT spending to exhibit "mid-single digit type growth" and that it would not dip below that point.


Proprietary Machines Prop Up Avnet, Arrow Server Sales

Arrow: Proprietary Server Sales Up 22 Percent in Q1

Arrow Sees Enterprise Sales Rebound a Bit in Third Quarter

Arrow ECS Skill Builder Tools Help Create Gung-Ho IBM Resellers

Arrow Rebounds in Second Quarter, Buys Into Unified Comms

Arrow ECS Launches Cloud Services, Expands in Germany

Midrange Shops Shift Priorities This Year

Arrow ECS Adds Professional Services

Arrow to Expand Services for ECS, Sells Some Debt

Avnet and Arrow: System Sales Might Have Hit Bottom

Arrow Revises Its Fiscal Q2 Outlook Downward

Distributors Arrow and Avnet Deal with the Meltdown

Arrow Lets Mid-Market Resellers Buy Sales Campaigns

Arrow Hit by X64 Downturn, Proprietary Servers Do OK

Arrow and Avnet Say Their June Quarters Exceeded Expectations

Arrow Buys French Midrange Distributor

Arrow Buys Agilysys' IT Distribution Business for $485 Million

                     Post this story to
               Post this story to Digg
    Post this story to Slashdot

Sponsored By

Infinite i™

The Infinite i™ Suite migrates RPG and COBOL applications to
Linux, Unix or Windows. The Infinite toolset recompiles AS/400 applications
for deployment in open systems without having to rewrite.

Once compiled, the Infinite Deployment Environment deploys applications
on the target platform. It includes the database.

                                 Features of the Infinite solution:
                                 · AS/400 applications can be deployed on multiple platforms
                                    (Linux, Windows, UNIX)
                                 · Infinite doesn't require a rewrite of the applications
                                 · Infinite is a complete replication of the AS/400 environment
                                 · Infinite includes the database
                                 · The average migration takes less than 120 days

For more information, visit

Editor: Timothy Prickett Morgan
Contributing Editors: Dan Burger, Joe Hertvik, Victor Rozek,
Jenny Thomas, Hesh Wiener, Alex Woodie
Publisher and Advertising Director: Jenny Thomas
Advertising Sales Representative: Kim Reed
Contact the Editors: To contact anyone on the IT Jungle Team
Go to our contacts page and send us a message.

Sponsored Links

Shield Advanced Solutions:  Access IBM i data & objects from Linux & Windows Servers using PHP
Dan Riehl Presents:  Fall Training Sale Discounts up to 40%! RPG IV COBOL CL Admin Security
ProData Computer Services:  Learn how to access remote data -- RDB Connect On-Demand Webinar



IT Jungle Store Top Book Picks

BACK IN STOCK: Easy Steps to Internet Programming for System i: List Price, $49.95

The iSeries Express Web Implementer's Guide: List Price, $49.95
The iSeries Pocket Database Guide: List Price, $59
The iSeries Pocket SQL Guide: List Price, $59
The iSeries Pocket WebFacing Primer: List Price, $39
Migrating to WebSphere Express for iSeries: List Price, $49
Getting Started with WebSphere Express for iSeries: List Price, $49
The All-Everything Operating System: List Price, $35
The Best Joomla! Tutorial Ever!: List Price, $19.95

Four Hundred Stuff
Help/Systems Streamlines IFS Backups with Robot/SAVE 12

VAI Unveils New Cognos-Based BI Solution

Adaptive Planning Delivers CPM Without the Geeks

Venyu Delivers Online Backup and Recovery for Kawasaki

Halcyon Bolsters IBM i Security Tool

Four Hundred Guru
Debugging Authority Failures, Part 3

Adaptable Data Areas

Admin Alert: What To Do with Vendor Profiles During an Audit, PLUS Two Other Great Features

Four Hundred Monitor
Four Hundred Monitor's
Full iSeries Events Calendar

System i PTF Guide
October 29, 2011: Volume 13, Number 8

October 22, 2011: Volume 13, Number 7

October 15, 2011: Volume 13, Number 6

October 8, 2011: Volume 13, Number 5

October 1, 2011: Volume 13, Number 4

September 23, 2011: Volume 13, Number 3

TPM at The Register
Teradata embiggens on big data

AMD sacks 1,400 to chase 'emerging markets'

Virtualization market faces shake-up

Oracle gives Solaris 11 final spit and polish

AMD pins exascale vision on Fusion APUs

Appro goes to extremes with new Xtreme-X supers

Virtualisation turns PCs into personal clouds

Fujitsu busts K super through 10 petaflops

CloudSigma invites Solaris to frolic on its cloud

Cray results suffer from AMD delays

HP Project Moonshot hurls ARM servers into the heavens

Calxeda hurls EnergyCore ARM at server chip Goliaths


Infinite Corporation
Linoma Software
Shield Advanced Solutions

Printer Friendly Version

Fun With IBM i Software Pricing

JD Edwards Solution Edition Fights Oracle

Profits Boom As Magic Software Snaps Up BluePhoenix AppBuilder Biz

Mad Dog 21/21: ARMs To Fare Well

Flexera to Tag Apps on IBM i for Usage Monitoring, License Audits

But Wait, There's More:

TUG Night School Matches Enthusiasm with Capability . . . U.S. Unemployment Rate Inches Down, IT Sector Adds Jobs . . . Arrow Electronics ECS Unit Keeps Humming In Q3 . . . IBM Powers Up Software Development Lab With Rooftop Solar Array . . . Small Businesses Agree Social Media Is A Path To Customers . . .

The Four Hundred


Subscription Information:
You can unsubscribe, change your email address, or sign up for any of IT Jungle's free e-newsletters through our Web site at

Copyright © 1996-2011 Guild Companies, Inc. All Rights Reserved.
Guild Companies, Inc., 50 Park Terrace East, Suite 8F, New York, NY 10034

Privacy Statement