EXCLUSIVE: Ingram Micro 2.0 - Behind distribution lines
- 07 August, 2016 22:15
Felix Wong - Chief Country Executive A/NZ, Ingram Micro
Preserving progress under new leadership, Ingram Micro’s much-publicised turnaround continues to shake-up the channel in Australia.
ARN went behind distribution lines with newly appointed Ingram Micro Chief Country Executive A/NZ, Felix Wong, uncovering the company’s next phase of market growth.
Typically, comebacks are a rare and fleeting thing, seldom seen in the world of technology.
Due to the troubled SAP rollout, 2011 will be forever dismissed as an ‘annus horribilis’ in the eyes of the Australian division.
Yet five years on, the distribution giant is gearing up for phase two of its bid to rebuild its fallen empire in the local market.
“After the World War, all the territories were divided and Australia is no different in that sense,” Wong said. “The landscape has changed because we let people come in and the market shifted due to changing customer demands.
“By coming back we are now putting more pressure on our competition, which I hope we can continue to do.”
Directly citing the work of outgoing Managing Director Matt Sanderson - who returned home to head up the distributor’s UK and Ireland team - Wong said the turnaround of the Australian business lies with the former charismatic leader and his executive team.
“This is a relay pass, not a hospital pass,” Wong smiled. “Change is ruthless and if you don’t keep up you get left behind and it’s painful.”
Under Sanderson’s leadership, the distributor arrested a dramatic financial slide following the troubled SAP rollout, with revenues plummeting from $2.1 billion in 2010 to $1.2 billion in 2012.
In replacing Jay Miley in the Australian hot-seat, Sanderson steadied the sinking ship during his three-year tenure, cracking $2 billion revenue in 2015, prompting global praise from CEO Alain Monié.
“Everyone talks about SAP,” Wong admitted. “It’s something that our vendors and partners remember but through Matt the business has grown back and our confidence in the market has returned.
“We remember it, of course we remember it, but it’s something that we have learned from and from my perspective, the next phase is focused around delighting our customers so they can delight their customers.
“We have a desire to grow our share back and become significantly the largest distributor in the market.”
With the media and increased distribution competition acting as a constant reminder, Ingram Micro executives have become experts at fielding SAP-related lines of questioning, such is the channel’s inability to forget.
“We’re focused on providing better service, better delivery, better range and better interaction with our customers,” Wong answered.
“Yes our customers wanted this 10 years ago, but people got away with just moving boxes and when we couldn’t move a box, people came in who could and took our business.
“But we can all move boxes so now the question shifts to how can we grow our market share in new ways?”
In a newly created role, Wong remains well-placed to lead Ingram Micro into a new chapter of growth, building on the company’s core competencies around distribution, Cloud, commerce and fulfilment and lifecycle services.
“Previously, every core competency and business unit reported vertically into region, and then into global,” Wong explained.
“As a result every country had four or five business units and functions all working together, but reporting to different departments at regional and global levels.
“While this was strategically necessary at the time, the process didn’t collectively unite all of our capabilities. Now each division has grown and prospered, the time is now right to unit all areas of our business.
“We’re not just a distribution company anymore and through this new Chief Country Executive role, all business units and functions now report into each country leaders.
"It’s my responsibility to bring these business units together and leverage the capabilities in each across all customer sets.”
Fresh from bolstering management ranks with the appointments of Chris Price and Rob Wilkinson as Senior General Manager Vendor Management and General Manager Retail Sales respectively, Wong returns to the market having held a number of senior executive roles at Ingram Micro, and formerly BrightPoint.
“My brief is to run the country how we need to run the country, making decisions locally to be successful,” Wong explained.
“But the key is to make them fast and not rely on someone overseas to make a decision for you. In this market the fast eat the slow.”
Inside Ingram Micro’s Cloud
Core to Ingram Micro’s reinvention on a local and global scale is the distributor’s expanding arsenal of Cloud services, built on its marketplace platform.
“What’s the magnitude of what we’re doing within the Cloud?” asked Ingram Micro executive vice president of Global Cloud Computing, Nimesh Dave, when speaking to ARN on the ground in Australia.
“It’s huge. But what makes Ingram Micro different? It’s the size of our service catalogue and the depth and breadth of our engineering team.”
With strong technical knowledge in spearheading the formation of a supply chain services division, Ingram Micro’s transformation falls under the remit of the former Tech Data executive, who is setting a global standard for Cloud provisioning in distribution.
Drawing on the largest vendor portfolio on the planet, Dave orchestrates a team of more than 1,500 Cloud-dedicated employees, including over 700 technical engineers, providing a one-stop shop for all channel Cloud-related needs.
“We are a software company with software engineers building software, it’s that simple,” he said. “Our aim is lift businesses to the Cloud through Innovation, Collaboration and Excellence - which spells ICE, something that if you hold in your hand for too long will melt because speed is everything.
“But to achieve speed you need investment and global reach, and we have both.”
As an ecosystem of buyers, sellers and solutions that enables partners to research, buy, sell, provision, configure and manage a wide range of Cloud solutions from a single pane of glass, the company’s Cloud division is accelerating in parallel with market demand.
“We’ve built a lot of marketplaces but if you don’t put the right products in there with the right user experience and interface, then it can’t be consumed,” Dave explained.
“There’s many great Cloud platforms in the market but it’s like having a beautiful car with no air in the tyres, what are you going to do with it now?”
In moving away from the transactional nature of distribution, Dave said the company’s focus on service management is enabling partners to become “rainmakers”, billed as the next generation of business pioneers, implementing the solutions of tomorrow.
“The platform is only one simple part of the Cloud equation,” he added. “It’s a combination of many different variables as the business model transforms from the traditional means of selling to service management.
“Yet for many distributors in the market, they are still trying to operate Cloud through the notion of bi-selling and they are going to encounter hardship.
“For example, if you concede price and take a deal at minus two per cent because you’re getting a six per cent back-end rebate, while you’re all happy that your net is up, when the rebate goes away you’re stuck with an ongoing sale that is a minus two per cent margin.
“This is a business where we have a gift that keeps on giving, or a gift that keeps on taking.”
In understanding the concept of lifetime customer buying, Dave advised traditional VARs to think of the bigger picture when striking up Cloud relationships, cautioning against short-term thinking.
Through leveraging the Odin Service Automation platform - which the distributor acquired in late December 2015 - Dave said Ingram Micro is “no longer one organisation”, as it exposes the channel to its expanding services play.
“We now sell to telcos, hosters, MSPs, SIs and VARs, building technology solutions for multi-channel Cloud enablement,” he added.
“Telstra is one of our largest Odin customers, running multi-Cloud on the platform through provisioning and management, alongside a host of other telcos across the world.”
In echoing Dave’s observations, Wong said investment continues to be made locally to facilitate the company’s Cloud progression, with Odin engineers now working in Ingram Micro offices across the country.
Building for success
Offering an honest and frank assessment of the new-look Ingram Micro, and its position within the market, Wong said the distributor “remains open” to further local acquisitions to increase market share.
“As company of Ingram Micro’s size and scaler is always open to acquiring businesses that make sense,” he said.
“But that’s the key, it needs to have meaning to us as a company. We see no value in buying a standalone business to just plunk on the side of our organisation and do nothing with, we’re not a holding company.”
For Wong, Ingram Micro acquisitions are built around “adding and broadening” capabilities, typified through the acquisition of specialist New Zealand-based distributor Connector Systems earlier this year.
“With any acquisition we make, we look to leverage that business onto our platform, which is what we are doing with Connector Systems,” he said. “They have a much more sizeable business in New Zealand and we’re leveraging off the back of this in a highly scalable manner.
“The Australian aspect offers the same on a smaller scale, and we’re closely knitting both businesses into our team, allowing the team, vendors and partners to access all of our capabilities.”
From a technological standpoint, Wong said the distributor is forever “scouring the market” for emerging technologies and vendors also, investigating new hot spots and future trends.
“We’re making bets,” he said. ”Some work and some won’t but for the ones that do, they have the potential to be game-changing.
“We’re fortunate as a large organisation to make these bets and if they do become successful, we can go from zero to 100kmph just like that and that’s a crucial differentiator for our business.”
In leaning backwards to assess the landscape, Wong acknowledged that all industries endure change, subsequently forcing change on the competitive players within that space.
“We’re ever fearful of markets changing and are always looking at how it impacts our business locally,” he said. “Staying at the forefront of the industry is critical but quite simply, it’s the only way to survive.”
Having survived its biggest test of character in 2011, 2016 and beyond promises new horizons for the distribution giant in Australia, under the banner of Ingram Micro 2.0.
This article was originally published in the July issue of ARN magazine.