Arrow perfecting the art of invisible computers through its multi-billion-dollar computing division
Monday June 22, 2015
CENTENNIAL -- In Arrow Electronics’ computing division, invisibility is the name of a multi-billion-dollar game.
The OEM Computing Solutions department -- known as OCS -- is one of several branches now based at the corporation’s relatively new headquarters in Centennial. Each division works with clients on a global scale, including several in the Fortune 50.
But the Colorado offices of OCS are where engineers and supply gurus are perfecting the art of “computers you never see,” to borrow a phrase from Brian Armstrong.
“When you think about Arrow, you can almost guarantee we provided a part to the manufacturer of anything someone touches, and in our case that could be a motherboard or a server or a computing system,” says Armstrong, VP and GM for OCS. “These are not your typical desktop computers. They are industrial grade, the type of thing you’ll find in an ATM or a slot machine.”
Or at the gas pump. A run-of-the-mill automated pump at your local station is made to do one thing: sell gas. On the surface are buttons and screens to make selling gas easy. In the guts is a computing system built solely to wade through a slew of complicated calculations, from price to payment type to just how much gas comes out of the nozzle.
And that’s where OCS comes in.
By working with a network of nearly 100,000 electronics manufacturers — think major players like Dell, Intel, Microsoft and dozens more — the OCS team designs, assembles and eventually sells custom-made computers to roughly 8,000 clients across the U.S and into Europe. Those computers run the gas pumps and ATMS with software and programming language created by the client.
More often than not, clients don’t want to advertise every nut and bolt in a product, Armstrong says. So rather than slap the company logo on a motherboard, OCS tends to stay unseen, just like its computers.
“We’re boxing it for them, we’re making it for them, we’re fulfilling it for them, so a lot of the times we are the person behind the scenes helping them out,” says Brian Toomey, OCS senior director of sales and marketing. “From the customer point of view, all they’re doing is selling a product and collecting cash.”
Built to last
OCS has leveraged Arrow’s heft as a $22.8 billion company to make invisible computers attainable for the little guy. Unlike consumer electronics in the vein of Apple or Samsung, OCS works on a relatively small scale, producing 500 computers for a CAT scan manufacturer in the client “sweet spot” of $7-8 million, Toomey says.
A select few accounts are in the $50 million range — they’re the unnamed Fortune 50 — but most are under the $10 million mark.
“This is very customized work, with lots of heavy lifting, and it honestly isn’t the sort of thing everyone wants to do,” Toomey says. “We aren’t making iPhones or other consumer products. We’re building maybe 500 a year for one of our clients.”
Still, the entire computing division accounted for $8.5 billion of Arrow’s total sales, and OCS is one of the largest arms.
For a relatively small client, a major selling point is reach: OCS works with seven outsource centers on four continents, pooling together processors and motherboards from the Intels and Microsofts of the world.
‘There are a lot of small companies that want to be global, but they don’t have the ability to do that,” says Armstrong, who has experience in French, German and Chinese markets. “We can help small companies look like they are large, international enterprises, even if they aren’t on that level.”
OCS clients range from military and aerospace contractors to video game manufacturers, and most can rarely afford to build computing systems in-house.
When an assembly line alone costs several million dollars, Armstrong says, it makes sense to invest in OCS. Technology moves at a rapid clip, and the division often works with clients to pre-design new technology for the next generation of CAT scan software. Costly medical equipment lasts much longer than the average smartphone, but so does the design and manufacturing timeline.
“A medical customer can’t deal with changing every time something newer and faster and better comes out,” Armstrong says. “They have to deal with FDA certifications, so they want something that will last for two to five years.”
Room to roam
Since moving its Long Island headquarters for Centennial in 2011, Arrow has fast become Colorado’s largest publically traded company. The move was logistical — it’s now easier to serve both the East and West coasts, Toomey says — but it was also a sort of employee incentive program.
“Colorado is a very affordable and livable place,” Armstrong says. “We had a large presence in Long Island and many of our employees had deep roots there. But when they came here, they were surprised at how much open space there is. There are opportunities to spread out.”
Arrow has also paired with the Colorado Clean Energy Cluster to act as a technological consultant. A recent problem is lighting management in Denver: How can the city switch over to energy-efficient LED lighting — and a citywide lighting system — in the best, most cost-effective way?
“It’s about reducing the carbon footprint and decreasing emissions,” Armstrong says. “We’re providing recommendations on the best way to do that.”
If successful, Denver’s lighting solution could be as invisible as an OCS computer.
“We build the computer that becomes the guts and the brains of a machine,” Armstrong says. “You’ll never see Arrow anywhere on the outside of the machine, but we build very specific components that are an integral part.”