Arrow Electronics Inc. employs 1,000 people in the Denver area and has a hand in making products common in nearly every home and business.
Despite that, it is hardly a household name, although that may soon change in Colorado.
The company announced Tuesday that it will move its headquarters to Arapahoe County from Melville, N.Y., on Nov. 15, with a goal of adding 1,250 employees over the next five years.
Arrow Electronics, with $18.7 billion in revenues last year, will rank as the state’s largest company, public or private, on that measure. No other firm in Colorado comes close.
Economic-development officials hope its presence will draw dozens of other firms and create a steady flow of jobs.
Arrow might be in the company name, but a bridge might better symbolize what the company does — connecting suppliers to customers and smoothing the path for manufacturing.
The company links more than 1,200 suppliers with 115,000 customers, providing a one-stop shop for mostly small and medium-sized manufacturers and technology-system installers.
“We provide the right technology . . . at the right time and at the right price,” says Paul Reilly, the company’s chief financial officer.
Alarm clocks, electric shavers, microwaves, cars, radios, cellphones and computers are just a few of the products that have a component Arrow supplies, chief executive Michael Long said when he announced the headquarters move.
“We are in every industry in the world that is involved with electronics,” Long said.
The company consists of two big divisions. The first and oldest business, which accounts for about 70 percent of revenues, provides electronic components and related services to customers.
“We buy capacitors, resistors, integrated circuits, filters across the board (from Arrow),” said Gordon Anderson, purchasing and materials manager at Freewave Technologies, a Boulder maker of data radios.
Instead of shopping dozens of suppliers and buying in limited lots at higher prices, a small or medium-sized manufacturer can turn to Arrow to get all the parts it needs.
Arrow’s field engineers also keep the company up to speed on changes in components that might improve its products, Anderson said.
Although “just in time” delivery is the vogue in manufacturing, that concept is a misnomer. Somebody needs to hold an inventory so parts are available on demand.
“Arrow holds stock in their warehouse for us so that if we have a spike in demand, we can get parts immediately,” Anderson said.
For some of its larger customers, Arrow even maintains a parts store on the manufacturing floor. And it has followed its customers around the globe, with 340 locations in 52 countries.
“We have to predict our customers’ needs before they know what their needs are,” said John Hourigan, company spokesman. “Arrow has to see around the corner.”
The second major business line is Enterprise Computing Solutions, or ECS. That business, based in Arapahoe County, accounted for about 30 percent of revenues last year and was under Long’s direction from 1998 to 2005.
ECS helps system integrators and computer resellers install servers, software and other technology solutions.
For Vince DeRose, chief executive and president of PEAK Resources in Denver, Arrow acts as an intermediary between him and IBM.
Arrow provides training, updates him on product developments and finances his hardware purchases.
“When people think of big firms like Hewlett-Packard and IBM, they don’t realize how those companies go to market and the different layers of businesses involved in that plan,” DeRose said. “They don’t understand that companies like Arrow exist.”
Arrow also holds $4 billion in account receivables from its customers, a role that has become more important with credit so tight.
“The best term for what they do is enablement,” said DeRose, an Arrow customer since 2003.
Arrow got its start in 1935 as a seller of radio parts on Radio Row in Manhattan’s Lower West side, when that technology was the equivalent of the Internet and mobile devices today.
To survive, Arrow has had to adapt and shift with the times. For example, demand for low-cost cellphones is dropping sharply as consumers turn to smartphones.
Arrow has pushed into new areas such as cloud computing, Internet telephony, green energy, medical devices and aerospace.
Over the past two years, Arrow has acquired 15 firms that provide services from product design to LED lighting to dismantling old computer systems and recycling the components.
Financial strength coming out of the downturn has allowed Arrow to snap up those firms ahead of competitors like Phoenix-based Avnet.
Arrow revenues did drop from $16.7 billion in 2008 to $14.7 billion in 2009. But by 2010, it had bounced back to $18.7 billion, a 28 percent increase in a still-sluggish economy.
That showing was much better than what happened from 2000 to 2002, when Arrow revenues fell from just shy of $13 billion to $7.4 billion in the tech bust.
Product design is an example of a service that allowed both the company and its clients to weather the recession better than they might have otherwise.
Clients who couldn’t afford to keep engineers on staff during the recession turned to Arrow to design new products.
When demand picked up again, Arrow customers had something fresh to roll out, Hourigan said. And Arrow had demand for the parts that it supplies.
Aldo Svaldi: 303-954-1410, asvaldi@denverpost.com or
Arrow Electronics’ executive team
Michael J. Long
• Chairman, president and CEO
• CEO since May 2009; joined Arrow in 1991
• Based in metro Denver
Paul J. Reilly
• Chief financial officer and executive vice president of finance and operations
• CFO since 2001; joined Arrow in 1991
• Based in Melville, N.Y.
Peter S. Brown
• Senior vice president, general counsel and secretary
• Joined Arrow in 2001
• Based in Melville, N.Y.
Andrew S. Bryant
• President of enterprise computing solutions
• Became an executive officer in 1999
• Based in metro Denver
Peter T. Kong
• President of Arrow Global Components
• Joined Arrow in 2006
• Based in Hong Kong
