Moving with the times
INgram Micro is well prepared to weather the ever-changing distribution landscape and the wider market, UK and Ireland boss Brent McCarty tells Sara Yirrell
Ingram Micro has been through a significant period of transformation recently, and earlier this month European president Gerhard Schulz announced major changes to its business structure throughout Europe which included centrally managed resources, and transferring back-office functions across Europe to its shared service centre in Bulgaria. UK and Ireland boss Brent McCarty gave CRN a more local view on the changes and the general economy.
How do the recent European strategy announcements affect the UK?
There are a couple of things that Gerhard is trying to accomplish. Firstly there is a big need to look at ways of standardising processes. We want to invest in Sofia so we can place all processes in one region for Europe and also be able to leverage the scale of the operation.
As he visited different countries, he noticed that each one had a different way of approaching the market. He felt that having a standardised go-to-market strategy would allow us to share business practice across the regions, and I agree with him. He clustered the countries last year as well, and the ability to leverage our back-office functions was a great opportunity to lower our cost overall as a European organisation.
Specifically in the UK, we did have some back-office functions that went to a shared services model. We had a very strong back half of last year and a good start to this year. We believe that this is a market we can grow in and we are investing in it. We also have more open headcount positions. We are the first country to implement all the new plans and announced some changes to the team internally here [Julian Thompson has taken charge of the Advanced Solutions and Ian Davey runs the B2B business]. In the UK, growth has been fantastic and every customer segment that we sell to is growing right now.
How do you see the role of distribution changing in the years to come?
Looking at Ingram Micro specifically, we are already making a lot of changes to the business; our CEO has structured the business differently and we are no longer just a core distribution company. We have four pillars: the traditional distribution business; Ingram Micro Mobility (formerly BrightPoint); Ingram Micro Logistics and Ingram Micro Cloud.
That is how we are evolving as a business and we are very excited about it. We are entering higher-margin areas where we are taking advantage of the scale we already have. We still have to act as an enablement organisation for our customers, and we have so many resources that we are making available to customers. Then there is everything we do on the product side that is a service, for example with Apple, we engrave devices, and offer white-label logistics.
Do you think there will be more consolidation in distribution or is there still a place for VADs?
There is always room for niche distributors. There is an opportunity for the smaller players, for example, with all the emerging technology that is not as easy for big firms such as us to adopt. Smaller distributors can react more quickly than the larger guys and really nurture this technology to give it a good start. And then that is where we come in.
And what about the term broadliner? Is it now redundant?
We do dislike the word broadliner now. Of course we still have a broadline business here, but we also have a value business. We want to leverage the scale that we have to invest further with the value side.
Does Ingram UK have any plans to acquire anyone?
We are always open to acquisition opportunities, but we think the main growth opportunities are in our organic activities. We don’t have anything on the radar right now in the UK, although we have made a bunch of acquisitions in the US recently.
What are Ingram’s plans for the cloud?
Cloud is a huge opportunity and one of the reasons why distributors exist today because of the multiple tech solutions we supply to thousands of resellers. New cloud companies are approaching Ingram all the time. We think cloud is here to stay, and it is not only about the opportunity around the cloud, but the fact that it also drives demand for hardware. It is definitely not something we fear. We are excited about it.
A company such as Ingram Micro or any distributor is like a bridge in bringing technology to customers, and the same thing applies to the cloud. It is different because it is a pay-as-you-go service and some technical investments are needed. We have had a lot of cloud success in North America as well as the UK.
Cloud is growing like crazy for us. We are able to realise this through the leadership in North America and that is why we have our own separate cloud pillar of the business. Resellers need our support to help them make the right decisions about cloud. Everyone has their own strategy but the cloud is still a solution. End users want this solution. Rather than them shopping around 12 different companies to find what they want, they can come to Ingram Micro to select from the buffet of services we offer.
Are there any technology areas or vendors that Ingram does not cover that you would like to this year?
We are having a lot of success with the enterprise business and were recently awarded Cisco’s Enterprise Network Distributor of the Year in Europe. We have had a lot of success with Cisco and really want to demonstrate that to other vendors on our enterprise line card. We have a great strategy in place to help us thicken up the enterprise line card. Elsewhere it is all going very well – our Pro-AV business is growing like crazy, our DC [data capture]/PoS is growing at a double-digit pace and our physical security business is growing as well.
How about the general economy – are things looking up?
We had a very strong finish to the year and a strong start to the new year. I think the UK market is looking up for everyone, as are other regions in Europe. Some of the countries that fell fast are now recovering. And that is why Gerhard has made changes. He is structuring the business so we are nimble enough to take advantage of the improving market.