Ingram Micro, a $2billion dollar a year distributor of IT based products, wants to expand its presence in the Australia lifestyle technology market as well as the fast growing SMB market. The company is also chasing additional growth from the software licensing market. Currently they have seven per cent.
Talking to SmartOffice Reseller, Guy Freeland – the new CEO of the combined Tech Pacific and Ingram Micro – said that the integration of the two companies had gone “very well”. He said that in a period of two months, management had integrated the two companies and were now looking for growth. He added that May 2005 was the first month they had been clear of any integration issues. Freeland also said that Ingram was in the short-term retaining the Tech Pacific computer systems, however they do plan to move to the Ingram Micro system in the future.
On the question of its customer base and credit issues in the channel, Freeland said that only 50 per cent of Ingram Micro’s reseller base over lapped with Ingram Micro’s base and that those customers were billing around $250million dollars. “Shortly after the acquisition an extensive review of the combined operations was undertaken by our credit team including the CFO. We mapped reseller by reseller and by majority and, following consultation with our insurers, we retained the combined credit levels with the majority of our customers,” he said.
When asked why other distributors were witnessing a big demand for channel credit. He said: “We are not seeing a problem. We had a concern when the merger took place. The concern was whether we could retain the level of credit we have in place. After an extensive review we are comfortable with our position and credit levels.”
Freeland acknowledged that up to 85 per cent of Ingram Micro’s business was in the SMB market and that the company was looking to grow its share in a market that IDC are predicting will grow in excess of 25 per cent over the next 12 months. On the question of Lifestyle Technology, Freeland said that they were looking to expand their presence in this market, however he did admit that not many people had got the convergence model right including Ingram Micro.
Freeland added: “We have alignments with a lot of vendors in this space as well as a lot of lifestyle electronic products, however we have not done a good job of bringing all these products together into a livingroom solution, neither has the likes of Len Wallis. Going forward we do intend to get more of this work and grow our share in this space.”
Sanderson, the man responsible for Lifestyle Technology at Ingram Micro, said during the interview: “We have the vendors like Belkin, Logitech, Netgear and BenQ, and all the time these vendors are bringing out more and more products in this space. The vendors are going that way and we have to go with them.
“There are margin opportunities for us in this space and through our website Tech Link – which gets a massive amount of business through small resellers – we can sell lifestyle technology.”
When asked whether they could take over a Hi-Fi distributor in the future, Freeland replied: “They are coming this way more than we are going their way. The industry is going IP.”
Matt Sanderson added: “Eventually yes, we are naturally transitioning into their space. This will happen over a period of time. In Europe, where I come from, the market is a lot more mature and we have to sell the products our resellers want and that involves selling the AV type products that system integrators and solution providers want. AV products are sold as an accessory to the generic IT product so we are naturally transitioning into this space. We have to look at putting a whole theatre system in. We see ourselves chasing the CEDIA type reseller.”
When questioned about the growth of AV and presentation system solutions into SMB boardrooms, Sanderson said: “In the past one had to have several people going into the office space to do an AV install. That is not the case today. IP-based solutions will fix this and I think there will be a natural progression to the IT installer into this space which will be a threat for the traditional AV or CEDIA installer. It is getting dangerous for them and they have to find new markets.” He continued: “Over the next 18 months we will see a lot of change from storage to the Xbox. Storage in the home will be big.”
On the question of the SMB SmartOffice market, Freeland responded: “The growth will come from people buying peripherals and devices like LCD screens and storage. The SMB market is slowing down and starting to flatten out.”
Both Freeland and Sanderson nominated storage, wireless and networking, mobility spanning notebooks and Smartphones, and devices like LCD monitors as growth areas in the channel, along with a new generation of lifestyle products and the licensing of software.
Guy Freeland is the new CEO of the combined
Tech Pacific and Ingram Micro.
Matt Sanderson looks after Lifestyle
Technology at Ingram Micro.