Arrow & Microshare Team Up For Global IoT Solutions Delivery

Arrow Electronics (NYSE:ARW) recently partnered with Microshare to jointly deliver IoT solutions to global enterprise customers in facilities management, transportation, infrastructure, healthcare and other sectors.

Reportedly, the combination of Arrow’s worldwide distribution and support capabilities, and Microshare’s solution kits will ensure seamless deployment of IoT solutions at a global scale. The collaboration will include end-to-end services related to the IoT solutions as well.

Arrow’s management believes that Microshare’s “capacity to scale IoT and manage the resulting torrents of data for global portfolios” will enhance Arrow’s offerings.

The IoT Furore

IoT has received a lot of attention in the past few years, mainly because of the growing appetite for connectivity. A McKinsey report estimates that IoT could have an annual economic impact of $4 trillion to $11.1 trillion by 2025.

This partnership comes at a time when numerous un-scalable, one-off point solutions are crowding the market, especially the real estate. The deal will enable enterprise clients to implement their IoT strategy at their own pace.

Per a Fortune Business Insights report, the global IoT market is expected to hit $1.1 trillion by 2026 at a CAGR of 24.7% between 2018 and 2026.

Fast growth in IoT, big data, AI and blockchain are major trends that are influencing IT spending, which bodes well for Arrow, given the nature of its offerings.

Per Gartner, IT spending will reach $3.7 trillion in 2019, representing year-over-year growth of 0.4%, and is expected to grow 3.7% in 2020 from the current-year level.

Arrow Stands Tall Amid Intense Competition

The remarkable growth prediction of IoT is driving many companies to up their game in this space. For instance, Cisco Systems (NASDAQ:CSCO) allows its customers to extend connectivity in the toughest of environments and conditions, securely from the enterprise to IoT Edge.

Earlier this year, Microsoft (NASDAQ:MSFT) pledged to spend $5 billion over the next four years on IoT, and is already partnering with smaller companies in the space.

Moreover, Arrow’s closest contender, Avnet (NASDAQ:AVT) , is giving tough competition with robust steps in this space. It recently tied up with software company Trusted Objects to provide comprehensive industrial IoT solution for customers with low-power IoT devices. Also, its impending acquisition of Witekio is aimed to expand and enhance its end-to-end IoT strategy.

Nonetheless, Arrow has secured significant market share (12.81% in the third quarter of 2019, per CSIMarket.com) compared with Avnet (8.16%) through its broad portfolio of products and services, and continued efforts to maximize consumer satisfaction.

Moreover, the acquisition of eInfochips last year broadened its IoT capabilities. This encourages us about the company’s prospects in the space.

Arrow currently has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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