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Ingram Micro CEO: We Must Place Bigger Bets On Cloud, Mobility, E-Commerce
Ingram Micro has made "a mistake" by trying to safeguard thin margins and not investing enough money into emerging technologies, according to CEO Alain Monie.
"This is what we have been trying to change over the last three to four years, which is to really make bigger bets," Monie said Tuesday. "Otherwise, we won't be around in three to five years."
The Santa Ana, Calif.-based distributor historically has been extremely prudent in its use of cash to preserve the thin margins on the huge volumes of IT equipment moved each year and ensure the company can survive economic downturns, Monie told more than 1,900 attendees at Ingram Micro ONE in Nashville, Tenn.
"This very narrow profitability model leads you to be extremely prudent in where you put your money, in where you invest," Monie said. "I think it's a mistake."
Monie said Ingram Micro plans to chart a new course by continually betting big on cloud, mobility and e-commerce until those technologies become a much bigger piece of the distributor's overall business. Just 0.4 percent – or $200 million – of Ingram Micro's $46 billion in annual revenue comes from cloud today, Monie said; the distributor does not break out sales for mobility and e-commerce.
"Our core business is so large than even a fairly big business is still small when compared to the big engine," Monie said.
Ingram Micro's cloud practice, though, has delivered impressive growth off a relatively small base, with the amount of cloud business done by the distributor doubling every year for each of the past five years. Ingram Micro's recently introduced Cloud Marketplace has accelerated adoption even further, Monie said, with some applications experiencing a 15 percent to 25 percent expansion in usage each month.
"It's taking off like crazy," Monie said. "Right now, it's huge growth."
Nearly half of Ingram Micro's 800 cloud-centric employees are developers, which Monie said has allowed the distributor to introduce more sophisticated offerings into the marketplace.
"We are creating a little more intellectual property by having our own cloud platform," he said.
Ingram Micro is also developing a logistics engine to help smaller e-commerce players get products to their end customers, Monie said. Ingram Micro's ecosystem is not focused on brick-and-mortar warehouses, Monie said, but rather on unveiling systems that can automatically talk with one another so that products can go to any location with minimal human intervention.
In addition, the distributor has ramped up its investments over the past three years around mobile devices, Monie said, with a focus on insurance, services and repairs. That has not been without challenges, with the distributor announcing plans in June drop $600 million – or one-third – of its Verizon mobility business in North America due to a greater-than-expected level of handset returns.
Monie also urged partners to identify the precise verticals and technologies they're strong in and focus intently on just those areas.
"There's so much happening in so many different areas that if you want to try and go everywhere, you'll go nowhere," Monie said.
Frontier Technologies has had an e-commerce program for the past decade, integrating back-end technologies for its health-care customers, according to Krish Moorthy, chief operating officer. The Wilmington, Del.-based Ingram Micro partner hopes to leverage the distributor to enhance its CRM software and meet clients' enhanced supply chain requirements.
For its part, Connecting Point hopes to work more tightly with Ingram Micro going forward around mobility, according to owner Tony Kresha. The Columbus, Neb.-based solution provider said most of the customer interest it sees around the technology area focuses on tablet applications, additional devices and point-of-sale terminals.
PUBLISHED NOV. 17, 2015