Ingram Micro: Will growth slow in 2011?

Keith Bradley Ingram Micro

Ingram Micro North America chief Keith Bradley

For 2010, Ingram Micro saw some of the headiest growth in the company’s recent history, including sales up 17 per cent year over year. But it’s important to remember what those year-ago numbers are comparing to – a rather miserable 2009 across the technology industry.

Still, buoyed by mobility, an expanding mobility play and (of course) the cloud, the distributor is still expecting to see double digit profit growth for 2011, said Keith Bradley, president for North America at Ingram Micro.

So how did the distributor do and what is it expecting to do in 2011? Read on to find out.

For the fourth quarter, Ingram notched sales of $9.88 billion (U.S.), up 12 per cent compared to the year-ago quarter. For the full year, sales were up 17 per cent to $34.59 billion. Net income was $115 million, up from $107 million in the year-ago quarter.

“I look back at 2010 as a really good year for the company,” Bradley said. “Seventeen per cent year-over-year growth is our biggest going back to 1999, and we’ve got lots of momentum coming out of it.”

But that momentum in terms of year-over-year growth will be somewhat tempered by the fact that it’s coming in comparison to a stronger 2010 than what 2009 offered. Bradley said he expects to see North American IT market to continue to grow in the mid to high single digits, powered by a continuing PC refresh cycle.

Mark Snider, general manager of Ingram Micro Canada, expects to see mobility really rise to the limelight in terms of opportunities for the company’s solution providers this year. The distributor has inked deals with all three of the major Canadian carriers to allow VARs to resell carrier activations and thus play a more integral role in terms of smartphones, and also does some work on the backend for upstart Mobilicity. Snider also expects the escalating interest in tablets to really get into the channel over the course of 2011.

“With RIM and HP both coming out with their tablets and being more business-oriented, we’re expecting to see a lot of VARs getting involved there,” Snider said.

Another growth driver for Canada will be the continuing ramp-up of its distribution agreement with Avaya from last year. After scaling up internally, Snider said the distributor is about ready to get down to the business of working with solution providers on Avaya solutions.

On the enterprise side, Bradley said Ingram is looking to expand its data centre business this year, and in particular to pick up some additional parts of the high-end proprietary server market. Last year, Ingram and Oracle/Sun went their separate ways, meaning the distributor is looking to convince more of its partners that rival technologies from HP and IBM are the way to go.

The problem for the distributor, he said, is that it gets resellers recruited, interested and incited in the space, but because it lacks authorization for those Unix servers, it has to send part of the business it uncovers to rivals who have appropriate authorizations for those parts of the hardware package. It’s a situation Bradley would like to fix.

Cloud also continues to be a priority after the rollout of Ingram Micro Cloud last year. Bradley expects this year to be something of a tipping point for cloud-based technology, and said that Ingram is looking to make sure resellers “get access to selling the cloud and to making really nice annuity streams there.”

“We’ll be making continued investments in the first half of this year, looking to ignite that business for the second half and beyond,” Bradley said. “In 2011, I think we’ll see how real, how significant, cloud becomes.”

Bradley said he also expected continued strength in networking as well as in the healthcare vertical, and area where the company invested in 2010.

“Most of our strategies will remain the same in terms of continuing to excel in our core broadline business – you’ll see an evolution of our culture and an enhancement of our associates’ skillset,” Bradley said.

Also on the way during 2011 is a new Web site from the distributor. The company is in the long process of rolling out a significant change to its site, going with a single global structure that can be tweaked for local needs in each region. While it’s one set of code, the site will offer unique functionality in each region as required, and therefore is being introduced in phases around the globe. The new site is already live in some regions including New Zealand, Australia, Chile and Belgium, but when it switches over in Canada is not yet clear. Bradley said it’s in beta testing with some Canadian partners, to help determine which sets of functionality Canadian partners most want.