Electronics firm: EE Times to stay straight as an Arrow
By Jeff Thomas
When a Fortune 150 company has been around for more than 80 years, you can bet it has seen its share of major product changes, along with raising a few eyebrows along the way.
So it appeared to be last month with Arrow Electronics Inc., when it announced the signing of an agreement to acquire the online electronic design publications of UBM, including EE Times, EDN, ESM, Embedded, EBN, TechONline, and Datasheets.com. Last year, Arrow acquired United Technical Publishing, a division of Hearst Business Media and a leading digital provider of product information to the global electronics components industry.
The moves definitely raised some eyebrows in the technical publishing fields, including those of Electronics Weekly, which pointed out that a major distributor of processor components and accessories was purchasing a chief competitor at the forefront of providing independent review of electronic engineering solutions, particularly in applications dealing with processors and microcontrollers. Locally, the move also caused some concerns among the electronic engineering crowd about whether EE Times would continue to be the completely independent voice it had been for decades.
“Absolutely, the intent is to keep the editorial arm independent,” said John Hourigan, vice president for global communications. While noting that the UBM sale is still subject to normal regulatory approval, Hourigan said that Arrow fully appreciates that changing the editorial policies of the acquired media assets would be a mistake, and the company is establishing an independent publishing arm of the company to make sure there is editorial separation.
“That was done with the publications of United Technical publishing,” Hourigan said. “We’re working to keep the editorial voice of those publications independent.”
Still, for those of us outside of the electronic engineering field, it is difficult to appreciate the stature of EE Times. While the content of other publications, including some of UBM’s holdings, tend to fall in line with the products being advertised, EE Times has been an extremely independent voice, advocating new processes long before they became widely accepted and questioning some that were largely accepted.
In other words, it would be somewhat similar to ExxonMobil buying The New York Times.
“I’ve been a reader of EE Times since it was distributed in print 25 years ago,” said Scott Hoot, a former AMD engineer and chief executive of Sage Electronic Engineering, an open-source bootloading solution for AMD and Intel processors.
“Definitely Arrow is a great company and distributor, with its fingers in lots of the development pieces today. But I actually find it concerning, having the industry commentary bought up with someone with a vested interest in setting the directions of the industry,” said Hoot. a Longmont resident whose new startup, Zfyre, is a cloud-storage solution.
Arrow is headquartered in Centennial and employs about 1,700 people in Colorado and 18,500 in 640 locations in 85 countries. Historically, Arrow is a very interesting company, a mirror of what was transpiring in the industry as a whole.
The company was founded in 1935 as Arrow Radio, a retail store selling used parts for radios that opened in the heart of lower Manhattan’s “Radio Row,” known as the birthplace of electronics distribution.
Moving into new radios in the 1940s, the company found its true nature by gaining the franchise rights to sell parts for major radio brands, and was renamed Arrow Electronics in 1946. In the ’50s, Arrow began selling electronic parts to industrial customers, and went public in 1961, listing total sales of $4 million, more than half coming from industrial sales.
In the 1970s, the company really showed its progressive thinking, gaining key semiconductor franchises, including Texas Instruments. That thinking led Arrow to become the country’s second largest electronics distributor by 1980.
Arrow now lists annual sales of $23 billion and may be on the verge of yet another corporate leap, as the Internet of Things and cloud-storage world begins to unfold. Arrow distributes all kinds of processors, from the super-fast, multi-core processors powering servers, computers and mobile products to the smaller, slower processors, usually known as microcontrollers, that can be found in products such as coffee makers, refrigerators and thermostats.
Coupling communication solutions between computers and microcontrollers — which may just be relaying data on something as simple as temperature, winds and humidity — is exactly what the IoT is all about. So while the profit margin on all types of processors has been slipping lately, Arrow sells all the components to make these solutions happen, including the engineering designs.
Hourigan said buying the publication assets was not about the editorial side of the industry. Instead, it was gaining access to the engineering data that flows through these websites.
“There wouldn’t be any value of the acquisition of these assets if the editorial independence wasn’t maintained,” he said. “But both (the UBM and United Technical asset) have engineering websites and databases. You have to look at the entire portfolio.”
The data that can be gleaned from these sites, Hourigan said, will help shape corporate decisions that will pay dividends five to 10 years down the road. The company isn’t simply seeking email addresses to dump into a CMS, it is trying to determine what types of engineering solutions are needed by up-and-coming customers.
“This is a step forward in our digital transformation, positioning Arrow as the pre-eminent, unbiased technology internet media, design, and eCommerce option for companies, from those on Indiegogo all the way to Fortune 500 global leaders,” said Matt Anderson, chief digital officer of Arrow Electronics, in a prepared statement.
Hoot said he understands Arrow’s intent to be ahead of the curve in providing solutions, but as Arrow and Avnet control more and more of the market in providing both the components and the engineering solutions, there still will be a loss of independent review.
“What happens is the duplication of bad ideas, bad code and bad practices,” said Hoot, who has provided engineering design for more than 300 different computer boards. “These are the kinds of things that led to the OpenSSL and Heartbleed bugs.”