Arrow Electronics, Inc. (NYSE:ARW) recently launched the ArrowPlus platform in partnership with Freelancer.com. The platform will enable technology providers as well as Fortune 500 companies to access numerous skilled electronic and electrical engineers to build hardware products.
The ArrowPlus is powered by Freelancer.com, a freelancing and crowdsourcing marketplace. Through the partnership, the marketplace aims to reduce R&D costs by as much as 30% and receive products from concept to market faster.
Per Arrow Electronics, the platform will provide full product development lifecycle services that will facilitate concept development and prototypying, printed circuit board design, bill of materials selection, product delivery requirements, cost analysis, component selection, documentation and translation services, software development as well as manufacturing support.
Rationale of the Deal
The collaboration will enable Arrow Electronics to expand its reach to the 32 million users on Freelancer.com. Also, the company will utilize Freelancer.com’s platform and expertise in running global online services marketplaces to solve advanced technological issues related to consumer electronics, transportation, healthcare, industrial Internet of Things (IoT), telecommunications, biomedical, cloud security, firmware, hardware as well as connected products in every industry.
Matt Barrie, CEO and chairman of Freelance.com, stated, “We have seen increasing demand to solve difficult and complex technology problems from larger organizations. We are excited to form an exclusive alliance with the most trusted guide in technology creation, Arrow Electronics, to break down barriers for larger companies with more complex needs to utilize our platform to accelerate technology.”
The rationale behind the collaboration is in the convenience of a marketplace. Marketplaces are witnessing higher adoption by technology vendors to expand their customer reach and lower cost efficiently. The platform intends to provide talent as a service and leverage the convenience of a marketplace.
We note that partnerships and innovations are helping Arrow drive its customer growth. The company has more than 200,000 customers in its portfolio as of the fourth quarter of 2018.
Further, management is optimistic about increasing cross enterprise engagements, which are expected to continue boosting margins.
Zacks Rank & Key Picks
Arrow Electronics currently carries a Zacks Rank #3 (Hold)
Some better-ranked stocks in the broader Computer and Technology sector are Fortinet, Inc (NASDAQ:FTNT) , Synopsys, Inc (NASDAQ:SNPS) and eGain Corp. (NASDAQ:EGAN) , each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
Long-term earnings growth for Fortinet, Synopsys and eGain is projected to be 16.75%, 10% and 30%, respectively.
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