Avnet Sells Off HP Enterprise Server Unit to Logicalis

Published: January 26, 2006

by Timothy Prickett Morgan

Server distributor Avnet, which sells products from IBM and Hewlett-Packard and is one of the largest master resellers of IBM gear in the world, has announced that it has sold off its U.S.-based business unit devoted to selling HP enterprise gear to a U.S. subsidiary of British company Logicalis. With this move, Avnet gets out of competing with its channel in the HP ProLiant and Integrity server business, and Logicalis picks up a business that brought in about $100 million a year in sales.

The Avnet unit was focused primarily on selling the ProLiant and AlphaServer systems of the former Compaq, and it has over 700 customers, located predominantly in the American southwest and midwest. Logicalis has been on a tear to bolster its presence in the IBM and HP channels in the past year, having acquired two IBM partners in the U.S.--Solution Technology and Eisco--two IBM partners in the United Kingdom--Notability Solutions and TBC--and one HP partner--Hawke Systems.

As part of the deal, Logicalis has inked a multi-year deal with Avnet to get its IBM and HP server iron exclusively from Avnet. So Avnet wins in that it has basically hired Logicalis to take over sales for its formerly in-house HP sales unit. The value of the five-year deal is estimated to be in excess of $1 billion. Logicalis had previously bought its IBM servers upstream from Avnet's rival, Arrow Electronics.