Ingram CEO Spierkel Speaks About His Promotion, Goals

Greg Spierkel has spent the majority of his Ingram Micro career in Asia and Europe. Now the new CEO of the Santa Ana, Calif.-based distributor plans to spend a lot more time getting to know solution providers in the United States. He spoke with CRN about his promotion, what's next for Ingram Micro and what solution providers can expect.

CRN: Can you take us through the process of how you were named to replace the retiring Kent Foster as CEO?

SPIERKEL: Kent started the process as far back as two years ago. At 60, he sits on three other boards [Campbell Soup, J.C. Penney Co., and New York Life Insurance]. He wasn't planning to work too much longer and that board activity keeps him active. He's spent a great deal of time thinking about the management team of the future. As you know we've had a great deal of management changes here. Some left us because they felt it was the right thing to do. Others wanted to do something else.

Kevin [Murai, newly named president and COO] and I have both been in the sights of the board. We've both been running the largest parts of the company for several years. We both got pulled into the co-presidency this time last year.

That was the first formal signal you could take to the bank [about becoming CEO]. That gave Kevin and me exposure to strategy, governance and other things [that are part of] being a large public company, managing Wall Street and the board.

There's always a risk when two men struggle to share responsibility. The good news is Kevin and I both bring our personal experiences to the table. I spent the last 15 to 18 years abroad. I had an understanding of the issues and complications in working in a fragmented set of markets like Europe and Asia vs. the homogenous environment of North America -- which Kevin has. We shared views of what worked, what would be more difficult. We really set the agenda for the company over the last year. Without saying it, Kent has really stepped away quietly in the last year, giving the responsibility to Kevin and me.

CRN: How did you find out?

SPIERKEL: We were informed by the board yesterday. We were only advised at 12:30 [p.m. PST] yesterday. I did not know about this change until then. This was part of a planned transition by Kent and the board. Kevin and I knew this was a potential outcome. We knew with each passing board meeting that one would generate a change. We were not told which one nor which person would [get the CEO job]. The board did not say what criteria they used to pick or what they were looking for at the end of the day.

CRN: Can you describe your relationship with Kevin? Do you expect that he will leave the company because he did not get the CEO position?

SPIERKEL: Both Kevin and I are pleased where we are. We work extremely well together. We've complemented each other here. We get to sound off on each other, give thoughts on different situations. Through all that, we've been friends. We knew each other well, but I had never lived there before, now our offices are beside each other and we can bounce ideas off one another.

CRN: What have you done in the last year that may have led to your selection?

SPIERKEL: [Last year] was our best year since 1999, the boom year around the Internet. We had, I'm not going to take credit myself, a great year. Kevin and I saw lot of progress across the globe. Europe over the last two years has been a powerhouse. We needed that. In my five years there, I'm proud of what happened there. We had a strong year in North America. Kevin and Keith [Bradley, president of North America operations] saw growth in North America for the first time in 16 or 17 quarters. That was encouraging. I see now a major investment in Asia with the acquisition of TechPacific. Now we have a third leg of the stool, some real size with a $5 billion business in Asia. That's the future of the company in terms of growth. That region will be high [growth] for several years. I see a lot of positive things such as access to vendors that we didn't have access to before. We will bring Korean, Chinese, Taiwanese vendors to North America.

CRN: How do you plan to bring those vendors to the U.S?

SPIERKEL: We're bringing certain products that are frankly made by the same manufacturers [that sell in the United States now]. Pick, say, monitors. We can bring products in at a lower cost from China or from Taiwan by virtue of not having a branded product. We call it our own brand. V7, Video 7, which started in Europe four years ago. Now we have brought it to North America in the last few months. Manufacturers making products for HP or Dell and other well-known manufacturers slap their own name on them. We can bring a product to market here, with a great refresh rate, resolution, for cheaper.

CRN: Could you do the same thing for systems?

SPIERKEL: Systems would be more difficult. They tend to be extremely competitive and more sensitive to brand recognition in North America. It's a different story in Europe or Asia, where there is more acceptance of unbranded. As long as you have an AMD or Intel chip with a good drive, people are comfortable with no name. But when you get to monitors or low-end digital cameras or printers, or cables, those are things people say I can't tell the difference. They'll be more comfortable as long as the specs look good and the price looks good with reasonable support.

CRN: What is changing about the way you serve different customers, such as SMB VARs and direct marketers?

SPIERKEL: That's another example of how we are becoming more global. A number of our bigger customers come to us because they want to expand to another geography, Europe or Asia. They come to us and do one of two things. [They want to] align themselves with comparable resellers in another geography. [There], we can marry them up. But more often they say 'I want to invest in India or China and leverage your infrastructure.' We also see Europeans want to come to North America. We provide the introductions and facilities then it's up to the partners to get comfortable with each other.

CRN: What will differentiate the Spierkel era from the Foster era?

SPIERKEL: Kent, Kevin and I have worked shoulder to shoulder on our direction for the last year. Everything here we do is about growth, about going into adjacent markets, new technologies. Kevin and I do most of the work here, we review things with Kent. He gave us leeway to set the direction of the company. In Europe the last two years we have made powerful improvements. We have more control of rebate programs, we manage the distribution houses differently. We can take out costs by not having so many centers. We leverage the Web better. We have the highest Web usage in Europe by far. Those basic things allowed us to move from a $7 billion to a $10 billion company in the last two years.

The next wave from Europe is telecom. We've signed up all the data wireless players: Deutsche Telekom, T-Mobile, and packaged solutions of servers, GPS, navigation systems with wireless capabilities. Those solutions are important for small transportation companies, grocers, retailers, contractors. That is a new niche for us. We are starting that process here in North America. It is adjacent to our business now. That's an example of what do in the adjacent space. We are talking about more consumer electronics. We have that agenda globally. We are doing more in the POS/AIDC space. We made an acquisition here and are looking in Europe.

CRN: Some solution providers have said they hope Ingram Micro's new management team will focus on investment and providing more opportunities for solution providers, rather than cutting costs. Is that something you can do?

SPIERKEL: There's no question we went through a period of belt tightening and we had to get more returns that our shareholders want. It is a balance to find a good spot with your customer base and tough decisions to improve profitability. At times people would like us to do things, but our return won't be adequate.

We've made some of those mistakes in the past and we will be smarter about that going forward. We've gone through the phase of the biggest belt tightening here in North America. Frankly, there will always be times when you have to take a look at what the market is doing, where there are opportunities to improve cost. That will be an ongoing process. But we will invest in tools for customers, like we did with Choice Advantage. That was a clear signal that we want to have a more reflective set of options to customers on how to deal with us from a pricing and services perspective.

CRN: Solution providers know Kevin Murai more than they do you because Kevin has worked here for so long. Will you make it a priority to meet solution providers here?

SPIERKEL: I welcome the opportunity to be more visible in the U.S. I will be at VentureTech Network [Spring Invitational in Atlanta April 18-21]. That is important to me. I was at VTN last fall as well. One of the things I try to do, that I have not been doing as much in North America, is whenever I have an evening or a lunch somewhere, I sit down with key customers and listen. I will be accessible to the customer base. But we've got great people in Kevin and Keith who know the customer base here and should continue to be visible. I don't want to be the only face to the company.