Ingram Micro Cloud Execs: Large Infrastructure-as-a-Service Deals Have Finally Arrived in the Channel

Ingram Micro's cloud leaders said a quantum leap in technical APIs for public cloud has at last opened the floodgates for consumption-based deals to flow through the channel.

The Irvine, Calif.-based distributor said solution providers should expect "a very significant increase" in the number of channel-led Infrastructure-as-a-Service engagements in the next two to three years thanks to major programmatic, technological and education-related advances.

"We weren't seeing IaaS deals coming through the channel last year in Q4," Nimesh Dave, Ingram Micro's executive vice president of global cloud, said during a press briefing Thursday. "Now [in Q1 2017], we actually see a fairly significant number of deals across the board."

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Ingram Micro had seen the channel involved in lots of small IaaS engagements, but never multimillion-dollar deals involving production workloads for sizable end customers, Renee Bergeron, Ingram Micro's senior vice president of global cloud, said during the briefing at Cloud Summit 2017 in Phoenix.

The distributor just recently completed its largest-ever Microsoft Azure engagement, Dave said, supporting a channel partner in a $3.6 million deal outside the U.S. that involved 107 virtual machines.

"Those are the size of deals that we're starting to see," Dave said. "One hundred and seven VMs is a lot of VMs."

Technical APIs (application programming interfaces) weren't really available around the hyper-scale providers a year ago, Dave said, with Amazon Web Services lacking exposed APIs for multitier and Microsoft Azure for CSP only going mainstream in the past couple of months.

"These have become very mature now," Dave said. "This time last year was highly different."

Prior to the latest enhancements, Dave said the APIs available to do per-seat subscriptions were significantly easier than those required to do consumption on a capacity basis.

"From a technical standpoint, it's significantly less complex to sell Office 365 than it is to sell Azure," he said.

Ingram Micro gravitated toward Software-as-a-Service when it initially entered the cloud market six years ago because it was easier to take to market, Bergeron said. Plus the distributor already had its hands full trying to bring together its early stage business transformation and enablement programs.

But in the process, Bergeron said Ingram Micro realized that the channel was missing out on much of the IaaS business since a lot of the business was going direct. More than half of the overall SaaS, IaaS and Platform-as-a-Service business goes through the channel, Bergeron said, but when it came to IaaS alone, less than 20 percent of the business flowed through the channel.

"We did some analysis of the pain points to understand why resellers were struggling with Infrastructure-as-a-Service, and that really helped to guide our strategy and our investments," Bergeron said.

Bergeron identified two initiatives at the focal point of Ingram Micro's IaaS investment: a new orchestration tool that allows channel partners to deploy and manage Amazon Web Services, Microsoft Azure and IBM Bluemix from a single screen; and the Infrastructure Your Way program, which is focused on enabling solution providers to start, grow and scale their IaaS businesses.

The growing dominance of the IaaS delivery model has disrupted legacy data center partners since the hyper-scale players manufacture their own servers and storage devices rather than buying them from a third-party provider. Bergeron said these data center-focused solution providers need to add new skill sets to their repertoire.

"They don't need to shift their entire business to the public cloud," she said. "But I do believe that they've got to develop the competencies to be successful in the hybrid cloud and in the public cloud as well."

TCW Computer Systems customers haven't been aggressive in adopting IaaS offerings since they still run lots of on-premise applications, said Ryan Bowman, an account executive for the Manheim, Pa.-based solution provider. TCW has instead stuck primarily to installing and supporting Office 365, Bowman said.

Bowman said TCW would be interested in training and technical help from Ingram Micro as customer interest in public cloud grows so that the company has a better grasp on how the hyper-scale IaaS platforms work.

Solution provider Waedt, meanwhile, began actively selling Microsoft Azure three or four months ago to help customers get away from having on-premise infrastructure, said Martin Waedt, managing director of Munich, Germany-based Waedt.

Although Waedt said Azure is a great product and easy to sell, profitability has remained elusive and technical implementations have remained challenging. That's because much of Germany lacks the bandwidth needed to support seamless operations in the cloud, Waedt said.

"We've had to dissuade some people because of the bandwidth," Waedt said. "The limit is not the customer."