Ingram Micro Lays Out 5 Predictions for 2018

INGRAM MICRO ONE — Ingram Micro’s general manager and executive vice president, Paul Bay, opened the distributor’s ONE event in Dallas on Tuesday with his Top 5 Predictions for 2018 — connection, convergence, community, expertise, and back to basics. Bottom line — lean into Ingram Micro.

The thrust of both Bay’s keynote address, as well as one by Kirk Robinson, senior vice president for U.S. Go to Market, Ingram Micro — Be Disruptive. The way to take risks is by doing it together.

Ingram Micro’s Paul Bay

“Over the last few years we looked at the market and used words like – it’s scary, unknown, it’s thrilling, it’s terrifying – but I’ll tell you that with this community, the partners that are in the room, there’s nothing that we can’t do if we don’t embrace it and go for it,” Bay said to the audience of 1,500 attendees. Ingram Micro does business with 35,000 partners in North America.

With that, he plunged into his top five predictions for 2018, beginning with connection and cash.

In a connected world, people, devices and outcomes are tied together, with everything coming back to the device and the way they’re bought and sold, i.e. consumption model or as a service. By 2020, three in four smartphone users will transact via their phones — with the number of transactions increasing to 15 trillion, up from 1 trillion today. For partners, it’s key to have a strong services component in their business as IoT, big-data analytics, etc., drive the need for a services business model.

“I understand how painful it is to build a services business within a transactional organization. That’s a challenge, but it’s imperative that we bridge to that third platform,” Bay said, adding that he hopes cloud and hybrid computing models are on partners’ road maps, as well. That’s where the cash portion of the first trend comes in.

Ingram Micro, Bay said, is investing more in its partners, pointing out that since HNA Group’s acquisition of Ingram at the end of last year, the company has more flexibility in how it injects capital into partners’ businesses.

Borrowing from an Ingram Micro colleague, Bay noted that, “The only deal we haven’t financed, in the U.S. and North America also, is the deal that we don’t know about.

“Bring forward your challenges and we’ll figure out how we can help you finance [them] … this isn’t just about a credit/finance partnership – although that’s still important – this is about understanding strategically, where you want to go and where those opportunities are for us to work together.”

The second trend, convergence, is driving consolidation both at the vendor level and among channel partners, Bay noted. Among partners, consolidation is being driven by those firms that are trying to figure out their plans for specialization. Bay pointed to Ingram Micro’s latest acquisition – The Phoenix Group (TPG), which adds POS expertise to grow its mobility-transaction business – as a nontraditional Ingram Micro play.

“That opportunity is growing and it’s growing for all of you in this room,” he said, noting that the deal helps the distributor deliver a better customer experience for its partners.

The third Bay trend is change. He pointed to recent channel survey results by the 2112 Group that show longer sales cycles in both the SMB and enterprise business segments – 10 months and 12 months, respectively – and noted that complexity in the industry is …

… dragging down sales cycle times.

“It’s not as simple as you buy this and plug it in, as it was 10 years ago,” Bay said. Today, businesses are grappling with buying decisions around on premises or off-premises, and how to finance, i.e. traditional credit or as-a-service. Bay told the audience that partners who offer traditional credit and as-a-service sales bundles helps speed up the sales cycle.

He also talked about profit, noting that it is stable — but that a big portion is coming from professional services, with many partners relying on legacy products to drive growth. Industry analysts are predicting that only 30 percent of partners will have a viable business in the next three to five years.

While that’s not a figure that Bay agrees with – suggesting that partners are more resilient to change than that – he did admit that there will be a percentage of partners who won’t have a viable business and advocated for them to turn to Ingram Micro to help figure out how to move forward, get uncomfortable, and embrace new business models.

Partnering with other channel firms is also something he suggested.

Another 2018 trend is the imperative to develop expertise and specialization, because that what’s customers want. Customers are paying for partners who understand their businesses, technologies and outcomes.

Whether a partner’s specialization is security or cloud migration, a vertical industry or a particular technology, Bay said, “Specialization and expertise are winning.”

Partners do themselves a service by examining the services and solutions that they offer customers today and the expertise they’re building with those customers – then leveraging it. At the same time, he suggested that partners make sure that they’re maximizing their resources and profits, and ask themselves if it makes more financial sense to turn to Ingram Micro for some services and expertise.

Finally, Bay talked about the importance of getting back to basics, not really a trend, but he noted how important it is for partners to revisit operational excellence as technology, markets and business models change.

“Maybe you’re doing business in an area where you’re being marginalized. Don’t try to be everything to everyone,” he said.