Arrow ECS shuts down A/NZ operations

Distributor Arrow Electronics has made the decision to shut down its enterprise computing solutions (ECS) business across Australia and New Zealand. 

In a statement to ARN, the distributor said it will honour its global contractual obligations, maintaining a limited presence to support these commitments. 

“Arrow Electronics has made the strategic decision to close its enterprise computing solutions business operations in Australia and New Zealand as part of a continuing initiative to invest in growth areas across the company’s businesses,” the statement said. 

“Arrow is committed to providing a smooth transition for its employees and channel partners during this period. 

“Customers will receive continued support through Arrow’s channel partner network.”

The decision will not impact Arrow’s global components business located in Melbourne, Arrow Electronics Australia.

Globally, Arrow announced a multi-year restructuring plan in November, including some job cuts during its third-quarter 2024 earnings which saw revenue fall almost 15 per cent, to US$6.82 billion from $US8 billion.

Arrow Electronics VP of public affairs and corporate marketing John Hourigan said the multiyear plan will reduce its annual operating expenses and involved reorganising and consolidating certain areas of its operations focusing on geographic realignment and consolidation of resources. The distributor plans to complete its plan by December 2026.

In its most recent financial results published on ASIC for the year ending December 2023, Arrow ECS Australia’s consolidated revenue tumbled from $193.7 million in 2022 to $161.7 million. 

Profit after tax took a hit from $4 million in the black in 2022 to $4.5 million in the red in 2023. 

In New Zealand, revenue has halved over the past few years from $17.2 million in December 2019 down to $8.4 million in December 2022.

Former founder of Distribution Central and current CEO of iasset.com, Scott Frew said he was devastated to hear the news of Arrow ECS shutting down its A/NZ operations but was proud of the staff and the many individuals whose careers he helped to launch and elevate throughout the industry. Arrow ECS is one of iasset.com’s key customers globally.

Arrow ECS made its mark in the A/NZ market in 2014 through the acquisition of Observatory Crest, followed two years later by the acquisition of Distribution Central to help bolster its market share. 

At the time of the acquisition, Arrow had around 40 staff in Australia and revenue of approximately $4.2 million per employee, while Distribution Central operated 130 staff at around $2.4 million per employee.

Recent documents show the number of employees in 2023 were 75 and ARN understands that there were only a handful of staff remaining towards the end of 2024, with a majority of staff made redundant on 14 January 2025, according to various sources.

The distributor’s vendor portfolio has shrunk considerably in the past couple of years with its most recent loss being HPE, one of the key elements that brought the two distribution entities together.

At one stage, the combination of Distribution Central and Arrow’s portfolio featured vendors such as AWS, Arista Networks, Avaya, Broadcom, Check Point, CommVault, Emerson Network Power, Equinix (DC), Extreme Networks, F5, FireEye, Forescout, Fujitsu Australia, Gigamon, Hitachi Vantara, IBM Security, Illumio, Infoblox, Infinidat, Jabra, LastPass, Microsoft, MobileIron, Opengear, Opswat, Palo Alto Networks, Pure Storage, Quantum, Riverbed, SimpliVity, Tintri, Varonis, Vast Data and Venafi.

In 2021, Arrow ECS underwent a change in guard, when Andrew Assad left the business and industry heavy weight, Karl Sice took the reins.

At the start of 2023, Paul Marnane was flown in from Ireland to take on the leadership role following Sice’s departure. 

In an ARN interview in 2022, Arrow ECS EMEA president Eric Nowak discussed the transition of its traditional business model into a ‘hybrid’ one, with its ArrowSphere cloud platform taking centre stage.

Nowak at the time hinted the distributor would look very different from its current environment to what it will be in the next three years. Very different indeed.