Speaking from Ingram Micro ONE in Las Vegas, Alain Monié said leaving Wall Street for private ownership allows the firm to double down on technologies that carry more risk while offering greater potential returns.
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For Ingram Micro, the pending closure of its $6 billion acquisition by Chinese conglomerate Tianjin Tinhai will be like taking off the shackles.
Wall Street hasn’t always been appreciative of the Irvine, Calif., distributor’s entry into new markets that involve a dizzying array of cloud and other IT technologies and services.
Going private means Ingram Micro can accelerate its investments in business lines that carry more risk but also offer the potential of greater rewards down the line by allowing the firm to remain on the cutting edge of the rapidly evolving IT world.
“The Street first reacted very negatively because we were diverting (resources) while making investments,” CEO Alain Monié told an audience of partners and vendors at Ingram Micro ONE in Las Vegas today.
“We went down in valuation and we came up when people started understanding that we were investing in the right technologies,” he said. “Unless you invest, you’re not going to stay alive very long.”
Being publicly traded, he told the group, “kind of limits the opportunity to invest in higher technologies at a faster pace.”
More than 2,000 vendors and partners, including about 970 technology solution providers, are gathered in Sin City for the annual fall season get-together.
During a general session at which members of the audience emailed questions in real-time, Monié said the company’s merger would ultimately be good for its channel partners.
“It allows us to invest faster,” he said. “We’re going to be leveraging their power, their presence in other areas of the world.”
One obvious opportunity involves the Chinese market, where Ingram Micro has competed for 18 years.
“We’re hovering around No. 3, No. 4,” Monié said of the market share. “We’re going to have a chance to become No. 1.”
Managing growth is a continuing concern for the Ingram Micro chief, particularly as it relates to ensuring that its 250,000 worldwide partners don’t feel lost in the fray.
Monié acknowledged the challenge of that, and said he sets a goal whenever he travels of dividing his time equally among vendors, partners and Ingram Micro employees.
“It allows me to have a direct understanding of the issues they face,” he said. “Staying really connected is very important, personally,” he added. “I try and keep that physical interface very, very alive.”
Monié told the audience to expect Ingram Micro to continue its investments in innovative technologies around cloud, mobile, security and other IT services. The company is also focused on helping partners to serve customers who want to expand to overseas markets or to win business from end users already doing business globally.
“We identified that opportunity several years ago,” Monié said. “It’s extremely complex…Who’s going to pay the taxes? What prices? What are the sales incentives of the partners that are in conflict with what we’re trying to do?”
The company’s expanding business lines also increasingly include products beyond IT.
“Through what we’re doing in facilitating e-commerce, you have people creating products, putting them in marketplaces; we’re facilitating that through connectivity and where inventories are,” Monié said. “That’s the area where we open up to products that are not necessarily IT.”
Industry-wide, he said, successful channel companies will have to adapt to a world where more and more of IT is delivered as-a-service, requiring adjustments in managing cash flow from recurring revenue – as opposed to big checks from lifecycle projects.
Additionally, channel firms will have to revisit the nature of their relationships with clients.
“We need to shift the skills of our people from the technology itself, which we know, to how the technology is being used,” Monié said.
He offered a few words of advice about the importance of innovating.
“I would say… get specialized in what you do well,” Monié said. “The more you know, the more you will be appreciated and you can make money.”
“Get deep into things,” he added. “The difference comes from those who create new things.”