PALM SPRINGS, Calif. – VARs loyal to Ingram Micro were all abuzz over the distributor’s partnership with Ottawa-based Level Platform Inc. (LPI).
The alliance is a conduit to Ingram’s announcement of its managed services offering called Ingram Seismic Platform along with a virtual services warehouse. The managed services offering, which includes LPI’s Managed Workplace product and host remote monitoring and managed (RMM) services solution, is the second major offering in the distributor’s new North American Services division, established this past August.
At the crux of the new program is the opportunity to gain more margins via services, said Richard Caballero, senior manager, services sales for Ingram Canada. Caballero, who used to run the VentureTech Network (VTN) in Canada, said Seismic would be aimed at the 50 or so VTN members along with the 900-plus members of the SMB Alliance.
The Seismic offering available now will be tailored initially to small to mid-sized businesses in Canada, but Caballero believes the real sweet spot will be in the small portion of the SMB arena. Those 50 employees or fewer companies in Canada are demanding managed services. An even better market for VARs will be the 99 employee or fewer companies, he added.
The offering will come from LPI in licence form. In addition to the LPI offering, the Seismic Platform will also include a suite of managed applications and products including disaster recovery, remote backup and security management.
Justin Crotty, vice-president of services, Ingram Micro Services Division, North America, said in no uncertain terms: “We are not going direct. We are not going into the managed services space alone. We want to increase revenue opportunities and profit and stay healthy partners to us. This is a VAR-led strategy. We want to build an a la carte offering. If you are on another platform that is not LPI we can still offer value with other services.”
Kirk Robinson, vice-president of channel marketing for Ingram Micro, added that it used to be taboo to talk about the end user at Ingram Micro, but in reality the distributor has moved closer to the end user via the channel in the last few years. Ingram Micro helps the channel train its customers at solution centres in Santa Ana, Calif. and Buffalo, N.Y. “About 50 per cent of those VAR bring in their customers to the solution centres,” Robinson said.
Don Conaby, president of Oshawa, Ont.-based reseller Conpute, compared Seismic to when Ingram Micro started drop-shipping product on behalf of the reseller.
He said back then, resellers were worried that Ingram Micro would be stealing their customer list, but in reality that did not happen. What drop shipping did was to move costs out of the model for the channel.
“Now everyone drop ships,” he said.
As for Seismic, the current VTN president believes it is the right move for the distributor because the market is moving towards managed services. “Ingram Micro is figuring out how to crack services as a deliverable to the reseller channel,” Conaby said.
“I still own the customer relationship and if they can drive more cost out of the relationship then I am all for it,” he added.
Conpute has been in the managed services space for three-year using LPI as a partner.
Caballero said the managed services offering enables many solution providers to get into the game without a huge financial investment. We are lowering the barriers of entry. VARs do not have to build a NOC for example.
Conaby said of managed services it is a slow process, but the fact that resellers can remove indirect costs such as managing the NOC, staffing the NOC and additional infrastructure works well for his company.
“My cost of entry is greatly reduced because I am pushing the cost back to Ingram Micro and paying them like an ASP,” Conaby said.
Margins with managed services are at 30 per cent-plus, Conaby said. Dan Sottile, vice-president of Calgary-based Long View Systems pegged the margin even higher, at between 35 to 45 per cent margins.
Long View has been in the managed services space since 2000 and according to Sottile it has been growing at 50 to 80 per cent the past six years.
“In the old days, it was a pull strategy and customers used to say I have people for that. Now customers are calling us and the neat thing about it is it’s also an enterprise play as well as an SMB play. The clients, we found, have the same interests across the board,” Sottile said.
However, Long View uses N-Able Technologies of Ottawa as its managed services provider.
Caballero said the main reason for Ingram Micro choosing LPI over N-Able and even Billerica, Mass.-based Silverback Technologies is LPI’s robust technology. Ingram Micro also looked at LPI’s long term and they too wanted to build on its services offerings, Caballero said.
“(LPI) has solid leadership in the market and they had wide range of partnerships with vendors and moving forward we thought that was critical,” Caballero added.
With the launch of Seismic, Ingram has established a best practices portal called Seismic Success Support Portal. This portal will have online training and education, a library of managed services best practices, how-to-tutorials, services benchmarking, online training, white papers and marketing collateral.
“There is big hype over doing managed services. Now we can walk them through it and have them implement it quickly. This provides an immediate ROI,” Caballero said.
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