Ingram Micro Execs To Channel: Look To Peers, Distribution To Fill Expertise Gaps So You Can Meet Business Challenges

Solution providers are facing five major challenges as they respond to changes in how customers acquire and consume IT, but it's nothing that a sense of partner community -- and a bit of help from distribution -- cannot overcome.

That's the word from Paul Bay, group president and executive vice president of Ingram Micro, who told channel partner attendees of the company's Ingram Micro One conference in Grapevine, Texas, that partners are facing scary times.

"But with this community of partners we have in this room, there is nothing we can't do," Bay said.

[Related: Ingram Micro Looks To POS Merchant Services, Security With Acquisition Of The Phoenix Group]

Channel partners can work together and with Ingram Micro to overcome problems caused by the conflict and disruption caused my major changes taking place in the industry, Bay said.

"Those words carry negative connotations," he said. "But I'm a half-glass-full-kind of guy. I see opportunity."

Bay outlined five trends impacting channel partners, and said that they were based on his own observations rather than on any research.

The first is connection, which includes such things as the Internet of Things, virtual reality, mobility, the cloud and other new ways businesses are reaching out to their customers. Making those connections will require partners help clients adopt new business models, which will require new services to succeed.

Such services, while offering huge profit potential, are difficult to build for businesses that have been more focused on transactional businesses. "But we have to do it," he said.

Ingram Micro has moved quickly to change its business model to meet such challenges, including the introduction of the Ingram Micro Cloud business unit, which currently hosts over 2 million seats, as well as its financing arm that can help partners work on cloud deals, Bay said.

The second major trend is convergence, which Bay said is driving consolidation at the vendor, the distribution, and the partner levels as companies scramble to build new expertise in such areas as artificial intelligence, 5G and SD-WAN.

Ingram Micro recently acquired The Phoenix Group, a value-added distributor with expertise in point-of-sales technology and related security infrastructure, Bay said. "We want to help us enhance our skill sets because we see an opportunity to help you," he said.

The third major trend is change, which Bay said is happening faster than ever.

Bay cited a third-party study that found sales cycles are getting longer, with the average SMB sale taking 10 months and enterprise sale taking 12 months. "It's not because people don't want to free up the budget," he said. "It's because technology is becoming more complicated."

Profits in IT have remained stable as lower product costs have been balanced by an increasing reliance on professional services, Bay said. However, he cautioned, solution providers are still relying too much on legacy product sales, according to some surveys.

"Thirty percent of you will have a viable business in three years," he said. "Turn that around, and 70 percent of you will not have a viable business."

To succeed in a world where expertise will be increasingly scarce and valuable, it is important for solution providers to explore new sales channels, including leveraging the services of their peers and of distributors like Ingram Micro, Bay said. "We've got to come together as a community. … A community can serve as a lifeline," he said.

The fourth major trend, related to the third, is the need for specialization and expertise to succeed in the future, Bay said. He told solution providers they need to do an inventory of the expertise their staff currently has and either grow their own resources or partner with peers or Ingram Micro to fill in the gaps.

The fifth, which Bay said was less a major trend and more of a personal observation, is the need for solution providers to get back to basics by simplifying their business and focusing on operational efficiency. "Don't try to be all things to everyone," he said.

Kirk Robinson, senior vice president of U.S. go-to-market activities at Ingram Micro, outlined a number of changes the distributor is making to better equip it to help partners transition their business to better meet future challenges.

One major project the company is working on now is improving customer segmentation, Robinson said.

"You're going to hear from us, from our sales team, reaching out to get to know you better," Robinson said.

The distributor is also working to build new relationships with born-in-the-cloud companies, service providers, and ISVs to bring partners new opportunities, he said.

Ingram Micro in 2018 will look more like a value-added distributor than a broadline distributor thanks to a new analytics division, a new hyper-converged infrastructure team, rapid expansion of its Ingram Micro Cloud business, new security and wireless assessment services, a huge focus on security, new point-of-sales specialization, and new IoT expertise, Robinson said.

Everything Bay and Robinson talked about regarding the changes happening in IT are exactly how Chris Case, president of Austin, Texas-based solution provider Sequel Data Systems, sees them.

"The cloud, what do we need to do to stay on top of things, it's all opportunity," Case told CRN. "People are scared. Paul was talking about 70 percent of us not being around in three years. It confirmed what we've seen personally, and the importance of the changes we've been making as a company."

Sequel Data Systems in May hired its first cloud architect, Case said. "We've already built a business around him," he said. "It aligns with what I'm personally seeing out there. Customers are all going to the cloud. The conversations we are having with customers is around workloads, Software-as-a-Service, or on-premises or public cloud. Every company in the world is going to have conversations around those three."

Keith Crawford, director of client strategy at Mainstream Technologies, a Little Rock, Ark.-based MSP, told CRN that he is definitely seeing Bay's 10-month SMB sales cycle.

"We need to move from a $27,000 sale to recurring revenue," Crawford said. "And it's important to change the focus from how we do delivery to how we finance the solution."

David Hoeffel, president of Trinity3 Technology, a St. Paul-based solution provider with a focus on the K-12 education market, told CRN he has a high level of trust in Bay and Robinson's awareness of how the market is changing. "Paul's very in tune with what's going on from a where technology is going point of view," Hoeffel said.