Ingram Micro CEO Looks To Tablets, Cloud For Future Growth

Investments in new solution opportunities such as cloud computing and tablet PCs gave Ingram Micro its best third quarter revenue since 2007, said Greg Spierkel, CEO of the Santa Ana-based distributor Thursday.

Spierkel, speaking to CRN after the release Thursday of Ingram Micro's third quarter 2010 financial report, said that solid demand for technology plus improved relationships with vendors and customers lead to double-digit growth worldwide for the company.

Ingram Micro on Thursday reported revenue for its third quarter, which ended October 2, of $8.5 billion, up 14 percent compared to the $7.4 billion it reported for the third quarter of 2009.

The company also reported income of $56 million, or 41 cents per share, up about 60 percent from the $42.3 million, or 25 cents per share, it reported last year.

Ingram Micro's healthy growth in revenue and profits had only one downside, Spierkel said. "The numbers will be challenging to meet in the future because everybody's saying last year was an easy quarter to compete against," he said.

Next: Seems Like Old Times

In North America, which includes the U.S. and Canada, Ingram Micro saw a 13 percent growth in revenue over last year, as well as an operating margin of 1.7 percent, the highest of any geography, Spierkel said.

"That operating margin is the best since 1998," he said. "We're back in the heady days of 1994 to 1998. It says the organization here is making good progress in terms of productivity."

Thanks to the economic slowdown, Ingram Micro at this time last year was focused on chasing costs and worrying about balance sheets, Spierkel said.

Spierkel declined to directly compare Ingram Micro's results against other distributors, some of which report their financials a month before or after Ingram Micro does. However, he cited reports by analyst firm NPD which showed that his company is growing at the same rate or higher than distributors overall.

Going forward, the focus is on investing for future growth, particularly in terms of cloud computing and Apple's iPad tablet device, Spierkel.

Next: Clouds And Tablets

Ingram Micro's Seismic branded cloud offering has grown significantly since it started three years ago, although Spierkel declined to give specific figures.

"We've been out there building hosted solutions and helping our VARs step into managed services," he said. "Three months ago, we started working with Rackspace to offer cloud storage. And we're currently in discussions with Microsoft over working with its BPOS cloud offering."

The Seismic offering is already profitable, Spierkel said without going into details. "It's still very small relative to the rest of the business, " he said.

Tablet PCs, particularly Apple's iPad, are turning out to be a nice little business, especially overseas, Spierkel said. "In many countries, we're getting access to the tablet for the B2B (business-to-business) customer base," he said. "It was initially launched in North America for consumers, but around the world customers are using it for business."

In the U.S., Apple is still committed to its carrier partners for sales of the iPad, Spierkel said, but he expects that to change, giving Ingram Micro an opportunity to work with the product in North America.

Next: Employee Count Up

Spierkel said Ingram Micro's employee count is up over last year for several reasons, including three recent small acquisitions and investment in such new areas as cloud computing, providing advanced enterprise solutions, and adding new Web tools for partners.

In the U.S., Ingram Micro is also ramping up its headcount in order to increase its logistical support for its retail customers, he said.