Ingram Micro Canada has hatched a components business unit for resellers, system assemblers and system integrators.
As part of the program, Ingram will supply the channel with demand generation tools, volume pricing, reserve inventory, go-to-market strategies and just-in-time logistics. The
distributor also plans to offer quicker response times while delivering lower-cost products.
IDC predicts the components market will increase at a compound annual growth rate of 15 per cent. Greg Tobin, Ingram Micro Canada’s senior director of sales for VAR and components, says the white box market represents 30 to 40 per cent of the desktops in Canada. He estimates the components business in Canada is $1.5 billion.
“”There’s a big opportunity to do a better job of understanding what the system assemblers and integrators need – and going to market with programs that are streamlined specifically to their needs and to understand the just-in-time inventory systems that they require and their production cycles.””
Despite the market optimism, Tobin says there’s work to do in terms of pumping up the market for VARs and creating brand recognition for Ingram.
“”We’re not seeing an accelerated rebound in the finished goods and products in the VAR arena, he says. “”Ingram has a pretty strong market share in the VAR business for finished goods, but when it comes to the components (the products that are made for the white box manufacturing which are hard drives, motherboards, processors, memory, and all those related products that go into the work in process) we tend to be weaker in that.””
Another key challenge, Tobin says, is the fact the distributor is not typically known as a destination category. “”If I were to say ‘components’, Ingram Micro is not the top of mind – part of my mandate is to make it top of mind so we’ll become the one-stop solution for those components.””
And while the components business is not an entirely new focus for Ingram, the structure and dedication is, Tobin says.
“”The problem we had was in part due to our organizational structure. We were set up to be a broad line distributor and we didn’t have a 100 per cent focus and accountability on this business unit. And in order to be successful you have to focus it and understand the market itself.””
Today, the unit is set up as a “”business within a business””, he explains, indicating the marketing side reports to him, along with the purchasing and product management and sales departments. “”It becomes a general business onto itself, with a focused sales team (the total number of people dedicated to the unit is 12).””
How does the program work? VARs can purchase the products as they need it or in volume.
At the moment, the process “”is very much transactional bundling – so they are buying as they need it,”” says Tobin. “”What we need to do is get it to the point where we can have their build of materials ready to go . . . So we’re trying to get towards longer commitment cycles (understanding what their needs are) and in so doing I can forecast a lot better, I can do more effective buys, and I can buy product unprotected and drive down my costs.””