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Ingram Micro: Changing The Conversation

Ingram Micro is answering the call of today's solution providers with new financing options and recurring revenue models to propel their business into the future, says Americas Group President Paul Bay.

Corus360 President and CEO Steve Johnson couldn't imagine transitioning his Cisco practice from traditional networking business to software-defined powerhouse without the might of Ingram Micro, his trusted distribution partner, behind him.

The distributor is helping fund training for Corus360 engineers on Python scripting and other coding skills and is working to help the solution provider bring in the expertise necessary to automate software-defined infrastructure, track malware faster and quickly upgrade networks, Johnson told CRN.

"These are all new skills for us," he said. "Ingram Micro is helping us pivot and transform our business to meet tomorrow's business demands. I'm not seeing that from other distributors out there."

[RELATED: Ingram Micro - Changing The Conversation]

It's a long journey -- 24 months so far -- for the Atlanta-based solution provider, one that will enable it to offer more flexible and efficient networking and cloud infrastructure for customers built on Cisco ACI software-defined networking, Cisco SDWAN and Cisco HyperFlex hyper-converged infrastructure.

Johnson is glad not to be making the journey alone.

"We've shown up on Ingram Micro's radar, and they are investing in us to see us grow," he said. "They take an active role in our business."

Corus360 still has a lot of work to do, including developing Cisco ACI skills, Johnson said. But it already is making the most of Ingram Micro's investment, using its employees' new Python scripting skills to cut back significantly on the hours of expensive engineering time needed to configure Cisco solutions and by automating solution rollouts at customer sites.

"Our service delivery business has had a record start this year because of the training," Johnson said.

Corus360 is one example of a solution provider that has benefited from just how much Ingram Micro is changing the channel conversation from focusing on products to focusing on business outcomes and from distributing boxes to supporting the development of services and skills at partners that might otherwise be left behind in the age of digital transformation.


Shifting To The Future

Rather than focus on technology and its delivery, Ingram Micro today is all about the business outcome the channel needs to deliver, said Paul Bay, Ingram Micro's executive vice president and Americas group president.

"The business model shifted completely," said Bay. "When I talk about the business partner and being a business consultant, it's not about the technology and the output. It's about what is the business outcome that we're trying to solve for? And then we back into, what's the right way to solve for that business outcome?"

As a result, Ingram Micro has changed its conversation with solution providers to include not only technical know-how but also creative financing, recurring revenue models and everything-as-a-service capabilities that are now helping partners generate increased value for customers while simultaneously boosting partner profitability, Bay said.

At the same time, Ingram Micro is able to draw on the global scale and investments it made in its own services and skills development to help partners change the discussions they're having with end users from the on-premises hardware and software world to one based on new business models, Bay said.

"We can test markets and help partners lessen the risk in trying to build a new practice," he said. "They can ride shotgun with us, because we're doing this and we have the skill to be able to say ’use that' or ’build that' on their behalf without everybody having to do that on an individual basis."

Ingram Micro has proven itself adept at getting channel partners to think about the future, said Robert Bello, partner and vice president of sales at Bit by Bit Computer Consultants, a New York-based MSP and member of the Ingram Micro Trust X Alliance, an invitation-only peer group of the distributor's top-performing channel partners in the midsize and enterprise markets.

"We have dedicated a big part of our business to working closely with Ingram Micro, and in return we get feedback on issues important to the future of our business," he said. "They come to us, ask what we need, what trends we are seeing, and tell us what they are seeing in return."

As Bello sees it, it's the kind of relationship every solution provider should have with its distribution partner.

"If you are a box pusher and just need the best price, you are being a little short-sighted," Bello said.


Giving Partners The Tech Edge

While Ingram Micro is helping ramp up new technologies -- with their related services and new recurring revenue opportunities -- to meet future customer requirements, it has been doing so in a way that partners don't become overwhelmed with the shift, said Kirk Robinson, Ingram Micro's chief country executive.

For instance, he said Ingram Micro has held a lot of conversations around the Internet of Things, but has taken its time to enter the market.

"We usually pride ourselves on being first to market with new technologies, but we kind of held back on this one," he said. "We built a board of vendors so we could pick their brains on what they need. We're not talking just selling sensors. If it was that, we're as big as anyone now. But we want to look at the analytics that clean and analyze the data. You will hear more about us on IoT, maybe this summer. But we're pacing ourselves. We want to be ready."

IoT is still an enigma to Bit by Bit, an area in which it hopes to gain guidance from Ingram Micro, particularly in security, Bello said.

"It's one of the areas we'd like to feed off of what Ingram Micro is doing, especially on the security side. Like security and the cloud, IoT is out there as a major topic of discussion," he said.

Tim Ament, senior vice president of Ingram Micro's Advanced Solutions, said the distributor already is working with Intel IoT Market Ready offerings even as it is developing its own solutions that combine its strength in industry-standard components with advanced analytics software and security.

The distributor also is taking it a step further with plans to combine IoT with its cloud capabilities and edge computing, Ament told CRN. "There's a need for analytics around IoT, and that requires lightweight edge computing," he said.

On the cloud front, Ingram Micro works extensively with Microsoft Azure, Amazon Web Services and the IBM Cloud. It also is the world's largest distributor of Microsoft, including Office 365 and Azure, said Tim FitzGerald, vice president of cloud channel sales for the distributor. The company offers a host of cloud-related services, including consolidating invoices from multiple providers, providing low-cost gateways to public clouds, and getting emerging technology vendors ready for cloud offerings and distribution, FitzGerald said.

A big part of Ingram Micro's outreach to solution providers is focused on inspiring them to adopt future-facing technologies, particularly IoT and cloud, Bay said.

"We're going to provide the opportunity to be able to help them if they want to make that transformation and that transition. … If people want to get more specialized and get help to go through that process, we will help them with that," he said.

Solution providers, especially smaller companies, find Ingram Micro to be a strong public cloud partner, Bello said.

Bit by Bit is hosting many of its managed services customers on AWS via Ingram Micro because the distributor has the scale with the cloud provider that smaller channel partners on their own can't possibly match, he said. "Ingram Micro knows the ins and outs of AWS to give us advice if things are changing," he said.

Larger partners, even those with direct relationships with public cloud providers, also find in Ingram Micro the missing link to exploiting the power of the cloud.

While Softchoice is one of Microsoft's largest Azure channel partners in terms of revenue and consumption and procures its licenses direct from Microsoft, the company works with Ingram Micro on scaling its cloud solution provider, or CSP, business, said Chris Woodin, vice president for Microsoft and software asset management for the Toronto-based solution provider.

As a CSP, Softchoice and other partners are required to provide technical support to Azure clients, Woodin told CRN.

"Ingram Micro has enabled Softchoice to bring Microsoft's services to a wider range of customers than Softchoice could on its own," he said. "We're able to offer services at a high level, and enable those customers then to come back to Softchoice for other services."

The CSP program also requires management of a lot of licenses, Woodin said. "Ingram Micro provides the support to manage those licenses with minimal overhead on Softchoice's part," he said.

Ingram Micro plays a key role in making sure solution providers know where the IT industry is going, even if not every new trend is a fit for every partner, said Dan Haurey, president of Exigent, a Mount Arlington, N.J.-based solution provider and member of Ingram Micro's Trust X Alliance.

"They do a good job of communicating with the VAR community," Haurey said. "While not everything they talk about fits a company like mine, where there is a fit, they provide the opportunity and support to help us exploit it."

Ingram Micro also makes it easy for its solution providers to communicate with each other on technology and business topics through its Trust X Alliance, said Jennifer Anaya, vice president of marketing for Ingram Micro U.S.

The Trust X Alliance, the 20-year-old organization known until 2015 as the VentureTech Network, allows a solution provider to team with a peer in cases where it has a customer who either needs specific skills that solution provider does not have or is in geographical areas outside the partner's reach, Anaya told CRN.


Blazing New Trails

Ingram Micro has been laying a solid foundation for its push into advanced technologies and new business models, in part through 31 acquisitions since 2012 that have brought it new engineering and services capabilities it has made available to its partners, Robinson said.

For instance, the company in 2015 purchased the Odin service automation platform from Parallels, giving it a strong cloud software development base with a large engineering presence, Robinson said.

"We differ when it comes to cloud in the distribution market with hundreds of engineers from Odin," he said. "Through that acquisition, we probably have more engineers focused on the cloud than any other distributors combined."

Other important acquisitions include last year's purchase of Cloud Harmonics, a provider of cloud security training, and The Phoenix Group, a specialty distributor of point-of-sale technology with a focus on the integration of security into POS devices and infrastructure. Ingram Micro in 2016 acquired Ensim, giving it a cloud marketplace and service catalog, and in 2013 acquired CloudBlue Technologies, a provider of e-waste recycling technologies since renamed Ingram Micro Enterprise IT Asset Disposition.

Haurey said CloudBlue was a textbook example of how a distributor can use an acquisition to help its solution provider community.

"Our customers know we're not big. But they appreciate what we can do with the support of Ingram Micro. It gives small companies like us a much bigger line card, and lets us add more value to our customers."

More acquisitions are on the way, Robinson said. "We have a list we're looking through now," he said. "It includes companies in our current markets, and others in adjacent businesses to help us continue to get growth out of the companies we have already acquired. It's a constant quest to meet the needs of the market."


The Financing Advantage

Ingram Micro also has pushed to make as much technology available to solution providers on an as-a-service basis as possible, Robinson said.

This includes ramping up Ingram Micro's new Technology-as-a-Service program during the second quarter of this year, Robinson said. Introduced last year, the program offers short-term and long-term financing options, including flexible leasing options that bundle IT services and solutions into a consolidated monthly invoice. It also includes Hardware-as-a-Service and Hardware-as-a-Rental offerings on new and refurbished technologies, as well as full or partial funding for recurring revenue engagements.

Indeed, the distributor is anxious to provide as much financing as possible to its channel partners, said Anthony Mackle, senior vice president and chief financial officer for the U.S. and Latin America business.

"The only deal we haven't financed is the one I don't know about," Mackle told solution providers at last year's Ingram Micro Trust X Invitational.

Mackle is known to get down in the trenches when it comes to financing, even with SMB-focused channel partners, said Alan McDonald, president and CEO of All Connected, a Simi Valley, Calif.-based solution provider and member of the Trust X Alliance.

McDonald cited the case of a large $1.1 million deal All Connected had to open a data center for a customer's new business unit where there was a small three-week window to arrange financing. Unfortunately, he told CRN, the customer's chief financial officer didn't want to set up a lease and didn't want to sign traditional financial instruments for the deal.

"In other words, he wanted 120 days of credit," he said. "Our Ingram Micro rep put us in touch with Anthony Mackle at last year's Trust X conference, and he signed the deal for us in 15 minutes on a napkin. A real napkin. Four months later, the client paid if off."

Financial support from a company with the scale of Ingram Micro gives All Connected's sales teams the confidence to pull off those kind of transactions, McDonald said.

"Because of Ingram Micro, we have the flexibility to overcome what otherwise might be deal-killers," he said.

Exigent also has found Ingram Micro a strong partner in terms of flexible financing, Haurey said. He cited as an example Ingram Micro's partnership with NOWaccount Network, an Atlanta-based provider of a business-to-business payment system that lets partners get paid immediately for invoiced jobs as if the client used a credit card.

"With NOWaccount, Ingram Micro provides a way to sell receivables to the distributor while we get our money right away for a small fee, like a credit card fee," he said. "We don't have to worry about 60-day or 90-day terms. Ingram Micro always finds a way to make us and the customer happy with financing."

One centerpiece of Ingram Micro's financing efforts is its focus on helping channel partners work with SMBs, Robinson said.

"We have an extremely large SMB business," he said. "We use our scale for financing. The dollars we have available surpasses everybody."

Ingram Micro's willingness to step in with financial support is a huge part of why Corus360 does business with the distributor, said Johnson. As an MSP, Corus360 may sign three-year to five-year

contracts with clients, leaving it with up-front costs that take time to recover, Johnson said.

Ingram Micro helps by buying some of those contracts as a way to provide Corus360 with the capital to expand, he said.

"This doesn't sound like a distributor," he said. "But Ingram Micro understands our business, and what we need. They know MSPs have cash issues."

A big part of why Ingram Micro can be so creative in its financing stems from its 2016 acquisition by China-based Tianjin Tianhai Investment, which turned it into a private company, Robinson said.

Ingram Micro has taken advantage of going private by making more funding available to solution providers for financing purchases in more varied ways, Robinson said. While he did not disclose how much Ingram Micro invested in financing partner sales, he did say that it issued an additional $1.5 billion in partner credit in 2017 versus 2016. Ingram Micro's alternative financing options provided partners an additional $3 billion in financing in 2017, the first year the program ran, he said.

"One of the advantages of going private is we now have the ability to invest more in financing," he said. "We see this as an opportunity to tell partners we will provide financing in return for gaining more of your business. And there's no more 90-day cycle in working with Wall Street."


Helping Partners Move Past Marketing 101

As it flexes it financing muscle, Ingram Micro also has invested heavily in marketing, both of itself and its partners, specifically through Agency Ingram Micro, or AIM, Robinson said.

"Our marketing team, if it was pulled out as a separate company, may be the largest in Orange County," he said. "But it is focused on simplifying the world of technology. It can handle everything from simple web designs to full digital transformation projects. They know how to really tell a story."

AIM was established about 12 years ago, and in the past six years has become a full-fledged agency for advertising and branding, including digital marketing for solution providers and vendor partners, said Ingram Micro's Anaya.

"We understand our partners' business models," she said. "We have a unique view because of their relationships through Ingram Micro. Often, we can tell a story they may never have thought could be told."

Over the past two years, AIM has helped over 40 solution providers, big and small, rebrand themselves, she said.

"They are seeing their companies transform, but need to communicate that transformation to C-level execs at their customers," Anaya said. "They know they need to connect with people outside the IT business as much as with people inside IT."

AIM, unlike typical marketing agencies, is focused on IT and business-to-business, Anaya said. "AIM understands partners' business," she said. "[Solution providers] don't have to spend a lot of time or money getting us up to speed, so we can focus on getting them the support they need."

AIM in 2018 is focusing on making digital marketing services available to help solution providers reach out in new ways, Anaya said.

"[Research firm] IDC tells us that buyers today are 68 percent of the way through the buying decision before they pick up the phone to call a provider," she said. "We need to make sure our partners are reaching out to potential customers looking online with information and white papers to help them find partners who can meet their needs."


Above And Beyond

Ingram Micro has found many ways to work with solution providers that partners say is above and beyond what they had come to expect from distributors. Ingram Micro's treatment of smaller solution providers, for example, is a big reason to work with the distributor, Haurey said.

"We think that, as much as Ingram Micro is a behemoth in size and scale, they have always made us feel like an important partner," he said. "We're only a $6 million company, while other partners are $30 million, $40 million, $50 million companies. But Ingram Micro makes us feel important to them."

Haurey credits Ingram Micro's top executives for pushing that ethos down throughout the organization.

"The fact that [Ingram Micro] can help smaller customers like us is a testament to their management team," he said.

With its technology expertise, support of new business models and financial backing, Ingram Micro has been a key supporter of Corus360 from the start, Johnson said.

"Ingram Micro has helped us with our strategy and our financing," he said. "We've seen how Paul Bay and the entire team deals with us in the trenches. This is not just a partnership. It's a true business relationship."

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