Ingram CEO: We'll Be Part of the Mobile Apps World

Ingram Micro wants to play in the mobile applications world. It just needs to figure out how, said CEO Greg Spierkel.

"We're trying to figure out a role to play, like others are. We are definitely helping our resellers understand the sector and talking about what we're doing there. It's not prevalent yet but we want to have a play," said Spierkel in an interview with Channelweb.com following the release of the distributor's second-quarter financial results.

Ingram Micro Thursday reported earnings of $25.3 million, or 15 cents per share, on $6.58 billion in sales for the quarter ended July 4. Second-quarter income dropped 57 percent and revenue dropped 25 percent compared to the same quarter a year ago.

The head of the Santa Ana, Calif.-based distributor said Software-as-a-Service (SaaS) and "software over the network" or small applications for mobile devices won't replace licensing for most business applications anytime soon, but he recognizes that the world is moving and that Ingram Micro needs to go along for the ride.

"There's a lot happening in the whole software space. That could be a discussion for an hour. Where there's a big [application] to go on, licensing is still the majority of what we do and what goes out to market," Spierkel said. "There's going to be some degree of software over the network and Software-as-a-Service. They both have a small base right now. Software over the network -- applets -- is becoming normal, but not in the case of business applications, where its married up with hardware. Software loads take a long time to load up on the server. I don't see that changing overnight."

As the world's largest distributor of IT products, Ingram Micro has the scale and resources to invest in new business models, and the company has traditionally looked at new technologies and new routes to market before competitors.

"I'm a big believer in innovation. The better companies out there are going to survive and grab share in the next few years [and are the] ones that continue to spend in innovation," Spierkel said. "The thing that's probably the most visible to everyone, and what will continue, is what everyone is doing with their PDAs. Applications are getting moved to PDAs. The Apples, BlackBerries of the world are gaining share and continue to outpace the overall market. Those devices are changing the way we use communication," Spierkel said.

Ingram Micro is engaged in discussions with multiple vendors now, he said.

"There is a play and we're active. We can't share all the details, but BlackBerry is a strong relationship with us from nothing a year ago. We move both apps and [hardware] units and it's a healthy business for us. We also do a very significant work with Apple in the logistics context. You see us working with Google to sell apps and search engine appliances. There's definitely more to come," said Spierkel.

Spierkel also believes that its important to invest around new vendors and new technologies that continue to innovate even as the economy sags.

"There's a number of them doing that and it's hurting their results. It's frustrating [for them] because analysts are short term in their thinking. They want to see profitability go down less," he said. "But smarter companies take a bath on profitability because the market is horrible and don't want to cut off their nose to spite their face because they want to appease market for the short term," Spierkel said.

"I would count us in that. I would like to see our costs go down more. We've taken good variable costs out of the equation, but we've also protected funding for investments around data center, data analytics, our Seismic [services division], e-commerce, systems upgrades. We're pushing forward," he said.

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