Imagine you're driving through a mountainous region. On your right is deep gorge with a spectacular river at its bottom. On your left is a steep cliff. Risk on the right is minimized because of a sturdy barrier, but on the left, you're never quite sure whether a boulder might get loose and come crashing down on your vehicle.
Some people think of that boulder as Amazon and Google and the road as the electronics supply chain. The odds that it will happen are long, but still it could happen. (See Google Is Electronics Supply Chain’s New Kid on the Block.)
In an EBN reader poll last year, more than 41 percent of respondents said they would buy or had already bought parts through the Amazon service. The interest is keen.
Some at the industry's largest distributors, Arrow and Avnet, don't worry too much about Google or Amazon encroaching on their business. But what about a company like Digi-Key, where e-commerce is crucial to the company's success and business model?
depth to make a big encroachment into the electronics supply chain.
I was chatting with Digi-Key CEO Mark Larson recently, and he struck me as an utterly confident, safe driver on that mountainous road — and enjoying the view to boot. Said Larson:
It doesn't keep me up at night. Maybe it should. With Amazon and Google, there's probably a segment of the market that they can bring some value [but]… I really don't see them as aligned closely enough to our market — at least at this point — to be considered a significant threat.
The electronics market is about engineering applications, and Amazon and Google aren't geared up for that model. Larson continued:
If you take a look at Digi-Key from the outside, we have 140 engineering types that support our customers with thousands of contacts each day to guide them with product selection and helping them understand applications. It's a different world. We provide a depth of knowledge. At this point, you can't draw any parallels.
What does keep him up at night? “Not to sound insensitive, but there's not a lot at this point,” Larson said, noting operational strength is a key care-about right now for him and his team at Digi-Key.