Ingram Micro Inc. knows from direct experience that turning a business built around transactional sales of packaged hardware and software into a purveyor of subscription-priced cloud solutions and “technology-as-a-service” offerings takes time. Helping its vast army of resellers make that same transition, the Irvine, Calif.-based distributor is well aware, won’t be a quick process either.
“It’s a journey,” observes U.S. SMB Sales Director Darren Gottesmann. Ingram reached a pivotal milestone in its own journey last month, when it consolidated and officially re-launched a series of cloud marketplace and e-commerce assets acquired over nine years at a cost of more than $500 million as the new CloudBlue platform. Many of its many SMB partners, by contrast, still have a lot of road in front them.
Gottesmann, who among other things sponsors Ingram’s SMB Alliance partner community, spoke with ChannelPro at that group’s annual Unplugged conference this week in Buffalo, N.Y. Even the roughly 90 attendees at that show, he notes, who are among the company’s most engaged and committed partners, often don’t know about the various ways Ingram can simplify the shift to a new era of computing. Awareness of those resources is even lower within the SMB channel at large.
“Maybe half know about it,” Gottesmann estimates.
Much of the Unplugged conference agenda was designed to help close that knowledge gap. Multiple sessions, for example, addressed market opportunities that partners can and should be exploiting in greater numbers. Not surprisingly, cloud computing was among them.
“Not everybody is joining as soon as they need to be,” said U.S. Vice President of Sales Susan O’Sullivan of the shift to cloud-based products during an executive panel discussion.
O’Sullivan pointed to the Internet of Things as another market with serious growth potential. Though Ingram is “a little bit behind” in that space, she conceded, it has a number of still undisclosed initiatives on the way.
“You’re going to see some things coming from us,” O’Sullivan hinted.
Fellow panelist Jim Veraldi, executive director of Ingram’s Data Center Solutions group, urged his audience to make protecting clients from the unending predations of cybercriminals a new revenue stream.
“If you’re not doing something with security you should be,” he said.
Ingram can make getting a security practice off the ground easier too, notes Director of Training and Professional Services Greg Richey, by performing functions like vulnerability assessments and penetration testing on a reseller’s behalf.
“It’s just expensive and challenging to maintain all of that equipment unless you do it all the time, and nobody does,” he says, noting that Ingram has a team of certified ethical hackers on staff who specialize in such tasks.
Ingram can help partners consume and deliver similar services from each other as well. The company’s Link program offers an expanding menu of partner-delivered service offerings in a variety of fields. Each one is carefully vetted in advance and then listed as a SKU for other resellers to purchase. Ingram enforces non-compete clauses and handles all of the invoicing as well, eliminating the credit risks otherwise associated with performing work for peers you know nothing about.
“That goes away, because Ingram is paying the provider and billing the buyer,” Richey observes. “It simplifies everything, and we’re finding that that’s a very attractive offering for our resellers.”
ReadyNetworks LLC, a cloud computing specialist and SMB Alliance member, is participating in Link as a provider. The Evanston, Ill.-based company offers on-to-off-premises migration services for partners that lack expertise in that area.
“It works really well,” says ReadyNetworks CEO and current SMB Alliance president Sam Barhoumeh, adding that it also produces repeat business. “If you had a great experience the first time, why would you want to go somewhere else?”
Link’s billing function is one example of broader efforts Ingram is making to help resellers fund the transition from transactional business models, in which payment is typically received upfront and all at once, to recurring revenue models.
“Our partners are trying to figure out ways to get themselves over that chasm from a financial perspective,” Richey observes, noting that Ingram’s financial solutions group can help by paying resellers the lifetime value of technology subscriptions in advance, essentially on credit, and then collecting the money it’s owed from the end user in monthly installments. Barhoumeh appreciates having someone else take on the hassles of preparing and issuing monthly bills.
“I don’t have to sit here and chase dollars,” he says.
From Gottesmann’s perspective, resellers like Barhoumeh facing steep challenges and fierce competition from often larger companies need every advantage they can get. It’s one reason he invited Vince Papale, the former Philadelphia Eagle played by Mark Wahlberg in the 2006 film Invincible, to deliver this year’s Unplugged keynote. Once the oldest rookie ever to make an NFL team without college-level experience, Papale persevered successfully against long odds. According to Gottesmann, SMB channel partners do the same all the time.
“They’re up against all these national companies and all the big dogs,” he says admiringly. “But they’re winning.”
