Santa Ana-based Ingram Micro Inc. will provide cloud services for two of the largest online companies as part of an expansion aimed at capitalizing on the emerging data hosting and storage segment and improving its razor-thin margins.
Ingram, the world’s biggest technology distributor, recently signed a deal with Seattle-based retailer Amazon.com Inc. to provide storage, backup and recovery services for its resellers.
It landed another deal with San Francisco-based Salesforce.com Inc. to offer its resellers and end users a platform to integrate their own applications into the business software maker’s operating systems.
Amazon and Sales force.com both operate their own cloud services and will use Ingram as a supplementary ser-vice.
“We’re partnering with the cream of the crop when it comes to cloud computing,” said Renee Bergeron, vice president of Managed Services and Cloud Computing for Ingram Micro North America.
Amazon is the world’s largest online retailer with $48 billion in sales in 2011, up 40% from 2010. Its market value is nearly $97 billion.
Saleforce, which makes customer relationship management software—also called CRM—posted revenue of $2.2 billion in 2011, up 37% from 2010. The company had a market value last week of roughly $17.5 billion.
The two deals were announced earlier this month at the third annual Cloud Summit in Scottsdale, Ariz., where Ingram debuted 56 new products and cloud services for vendors throughout North America. The offerings range from data loss prevention, Web filtering and employee monitoring and laptop recovery to troubleshooting and desk support for computers, laptops, Macs, servers, handheld and other network devices, among others.
Ingram now offers more than 100 cloud services for 40 vendors, up from 48 offerings and 27 vendors at the end of last year.
“We doubled our portfolio,” Bergeron said.
Ingram Chief Executive Alain Monié has singled out the specialty cloud business line for growth and investment since he took the helm in January. It promises much higher gross margins than Ingram’s traditional distribution model of moving technology products from one location to another.
Ingram is the biggest company based in Orange County by revenue, with $36.3 billion last year. It typically nets a little more than a penny on the dollar, and it competes against several big distributors, including Phoenix-based Avnet Inc. and Arrow Electronics in Englewood, Colo.
• Headquarters: Santa Ana
• Business: Technology products distributor, service provider
• Founded: 1979
• Ticker symbol: IM (NYSE)
• Market value: About $2.64 billion
• Notable: Added Amazon.com, salesforce.com as customers for cloud services
The cloud offers a different business model in a high-growth segment projected to hit $150 billion in global sales by 2014, up from $70 billion in 2010, according to Stamford, Conn.-based market researcher Gartner Inc.
Half of that growth is pegged for North America.
Ingram built its name in the last 30 years managing inventory and logistics. In the cloud no product moves—it’s more about making life easier for resellers to work with Ingram than directly with a retailer, according to Bergeron.
Products that don’t work are not returned for replacements. The customer takes the business to another competitor.
“It’s very different,” Bergeron said.
Due Diligence
That’s why Ingram often spends months or even years on vendor due diligence and understanding their target market.
The Salesforce deal grew out of a partnership the company struck in 2010 with Ingram’s Asia-Pacific region.
Ingram introduced its first cloud applications about seven years ago. Those were geared to educate and train resellers on cloud computing and services the company offered. In 2010 it rolled out an online marketplace with numerous cloud applications that allowed users to access products when needed.
Ingram also helps resellers build data centers to help them become versed in setting up private clouds for business-to-business customers and public versions for wholesalers or retailers.
“We’ve done a lot of work in educating our reseller base, because it’s a different business model for them,” Monié told the Business Journal in an earlier interview.
Ingram doesn’t break out revenue for its cloud services division. Those sales are bundled into specific regions where the company has major operations.
