Ingram chief vows to weather storm ahead

Ingram chief vows to weather storm ahead

Following healthy growth, Ingram’s European president voices concerns for 2008

Ingram Micro’s European president, Jay Forbes, has revealed how the broadliner plans to keep resellers in the black during 2008.

Despite two consecutive years of healthy growth, Forbes gave a surprisingly cautious outlook for the next 12 months.

“2006 was an extraordinary year for us and 2007 was even better,” he claimed. “But we are going to be more circumspect in 2008. Product lifecycles quickly come to an end and there is a general concern that many emerging technologies will go mainstream in the year to come.

“Couple that with the credit crunch, and we could be going through rough waters soon. I’ve got the experience to steer us through.”

Forbes’ comments come after Ingram issued a lower than anticipated guidance for its current quarter, citing soft conditions in Europe and the US (CRN online, 14 February).
Ingram needs to avoid exposing itself to the dangers of bad credit risks, and over-exposure to too many product lines, Forbes explained.

“It is time to make a hard assessment of the costs of distribution and the costs of doing business with our partners,” he said.

Forbes hinted that some rationalisation of product areas the distributor is involved in might be in order, as the company needs to stay focused on high margin markets.
He cited virtualisation and mobility as the most exciting growth hotspots. He also pledged to slash costs.

Alastair Edwards, senior analyst at research house Canalys, commented: “That is something all distributors must do to survive. If you do not vigilantly protect your points, you will take a potentially fatal blow in the margins.

“It will be interesting to see how Ingram achieves this supply chain optimisation. What more can it do? Ingram already has one of the best credit management systems. With transport costs increasing, it might ditch its centralised warehousing policy and set up local presences in each country.”

Edwards predicted 2008 will be a year for eliminating bad credit risks for the distributor. Partners should do all they can to keep in with Ingram, he said. “It will be looking to fire partners it is too expensive to do business with.”