Distributor Looks At 30: Spierkel On Ingram Micro's Anniversary

Page 1 of 3

Ingram Micro in July 2009 marks 30 years of operation, dating back to its origins, in 1979, as Micro D in Santa Ana, Calif. Back then, its founders were husband-and-wife teachers who developed a software business to sell to book stores, and would in the six years following sell the majority interest in their business to Bronson Ingram and his family-owned technology companies.

That was then. These days, the distributor -- which first went public in 1996 as a spin-off from the privately owned Ingram Industries -- has more than 15,000 employees and serves 150 countries.

Greg Spierkel, who has been Ingram Micro's CEO since June 2005, has held executive positions with the distributor since his arrival in 1997, meaning he's been with Ingram Micro during two recessions and some of the most eye-opening transformations to both the two-tier IT distribution model and the broader technology industry.

Spierkel recently caught up with Assistant News Editor Scott Campbell and Assistant Managing Editor Chad Berndtson to assess Ingram Micro past, present and future, examining some highs and lows and also where he sees the distributor headed in an uncertain economic climate. (Hint: look abroad.)

Excerpts of the conversation follow, and for more on Ingram Micro's 30th anniversary, check out a pictorial look at some of the company's recent history.

On the tier one vendors that are most surprising over the past 10 years, in terms of their relationship to the channel and the broader industry:

There are several large ones and I don't want to make anyone feel like I don't care about them. HP is our largest -- I think everyone knows that -- and there's been a lot of changes there. HP's been very positive for the company and everyone in distribution. But probably two stand out to me for different reasons.

One would be Cisco. Cisco until about six years ago was essentially a direct business, mostly selling to telcos or large corporations. But to the credit of that organization, by the year 2000 and since thereafter with the crash of the dot-com market, Cisco went through a pretty big change. [CEO] John [Chambers] adjusted the company very significantly and then his whole team embraced what I'd call multiple routes to market and partnerships that were very important to them to get to a point where somewhere north of 95 percent of the company's [sales] go through partners. That's a very significant shift over a seven-year period.

We have benefited and participated as a key partner of theirs, starting in a very ugly downturn. We made some very significant commitments to them in that period of time. I have to say that the company's move and clear direction to what they're trying to do has been a very positive thing for Ingram Micro and to this day continues to be very interesting because they're starting to get into, oh, the data center. Here's the data center as their new play. Three or four years ago they made a big run into the VoIP space with VoIP telephony products, and now they're the leader in that. So it's interesting how they've gone into certain sectors and done a good job.

The other one I'd highlight just because it's been good news is how well Apple has done in the past five years. One, this was a company that was a darling computer company with IBM in the late '80s and '90s, losing its way in the second half of the '90s and with a lot of people who frankly thought it would disappear, especially after the IT bubble bursting. All of a sudden, they switch gears into a consumer sense with music and the iPod, and then re-embracing the channel as they went down a much stricter business model. I have to give them a lot of credit.

I look at those two as two of the more interesting plays of the last five to 10 years in the consumer sector and the channel. I know both CEOs and have met both CEOs a number of times, and both of them said they'd reached a near life-threatening situation for the companies that made them re-evaluate what they were doing with their strategy. Both benefited from reacting quickly and making some big bets in key areas. It speaks well of what they were able to do when they were on the ropes.

On Ingram Micro's -- and the channel's -- complicated relationship to Dell:

I have to say, Dell's been a customer of ours for a decade or more. We started with them in the late '90s and we've been close to that relationship for years; but again, that's been as a customer. We've been selling them peripherals, hardware and software and we help them with virtually all the countries we're in. I always felt that at some point, even though there was strong messaging to the contrary, Dell would have to change. And I have to say without being too bold that I had discussions with them years ago saying I expected that would be the case. Particularly in emerging markets and Europe, a direct model can only work to certain degrees. I knew that was going to be a factor in their strategy over time.

If you look at other major manufacturers, there isn't a single manufacturer that has a direct-only model, wants to get large and expects to continue to grow. You need multiple routes to market to reach certain types of classes of customers, and certain classes will only buy products in what I will call a handheld manner: someone guiding them through the technology.

Dell ultimately had to deal with these things if it was going to be able to succeed in meeting a certain class of customers. Dell's penetration with a direct model outside of North America is much, much lower. I'm pleased at some of the decisions that have been made there, and I think it's going to benefit us. I am a believer that Dell is an important company. They are the largest player in certain product categories, and are what I consider a top-3 or top-4 player that's going to survive and make a difference in the next 10 years in the PC and server spaces. That they've embraced the channel is great, and I think it'll be a positive thing for us and for them. We're only two quarters into the relationship, but like any relationship these things develop and grow and move forward.

Next: Emerging companies, emerging markets

1 | 2 | 3 | Next >>

Tweet

   

More Channel Programs