After several years as Tech Pacific's PC and server category manager, Josh Velling has been given the task of marketing the digital home concept to the thousands of resellers signed up to the new look Ingram Micro. Velling spoke to Brett Winterford about the many exciting challenges that lie ahead as the IT and consumer electronics worlds converge.
What products does Ingram Micro define as being a part of its digital home vision?
Josh Velling (JV): The broad definition is any consumer IT or entertainment product that finds its way into the home. This cuts across many of our major categories. There are the displays - the plasma and LCD screens and projectors; systems - the personal computers, be they notebooks or desktops or even servers and gaming platforms; networking technology - the home broadband connection and the wireless or wired home network; and finally there are the peripheral products - digital cameras, video cameras, MP3 players, wireless phones, PDAs and the like.
Does Ingram Micro have a separate consumer electronics or 'digital home' division?
JV: A large number of our vendors have a portion of their product range in this space. Instead of having a dedicated division, we have people looking after the concept across many of our product categories. There is just such a broad product range to convergence - it doesn't make sense at this stage to separate it.
How does this fit with Ingram's global strategy?
JV: It is totally aligned with Ingram Micro's strategy. The company is supporting the marketing of the digital home vision on a worldwide basis.
What are the drivers behind the growth in the digital home space? Is it the greater availability of broadband and price drops in display technology? Or have there also been other factors?
JV: It's all of the above and more. There is no single factor responsible. Broadband is definitely more pervasive, and there has been significant price movements in video displays. These displays have always been the expensive part of the solution and the price drops have definitely stimulated demand.
There have also been continual developments in wireless technology - it's got to a stage now where it is affordable for the home. The demand is also been generated at the client end - phenomena like the iPod have helped make this technology trendy and desirable.
Is demand being driven by the vendors and distributors, or by your customers and consumers?
JV: There is a definitely a demand from consumers. People are very interested in this space. They are reading about this technology in magazines - they are being made aware that it is a reality.
As a distributor, we see it coming from both sides - the IT resellers are keen to learn about the technology and the audio-visual resellers also want to come on board.
On the vendor side, we have new companies coming on all the time, as well as new product lines from our existing partners.
What do you see as the role of the distributor in the digital home market?
JV: We bring the products together and help package solutions for resellers. Our job is to take products from one side and present them as solutions on the other.
In your role with the PC/Server category, bundling products was a key part of your offering. Are you using this as a sales technique in the digital home space?
JV: Definitely. At our national road show, ExpoTech, we have been handing out a lot of information about what bundles of products we are making available. As usual, it's all about customised solutions rather than standalone products.
When selling a gaming system, for example, you get some margin on the console and maybe the occasional software sale. Now that Internet gaming has arrived, there are new opportunities. You could sell a wireless network with it, adding a new layer of value and margin. You could bundle audio-visual equipment, display technology or home theatre projectors. It is a much bigger sale than just the console itself.
How substantial is the opportunity for selling converged products into the home market?
JV: Researchers are telling us the products included in the digital home vision add up to a $3 billion market. Those products might not all be sold under the digital home umbrella as such, but they can be used for that purpose.
How can your customers take full advantage of the concept?
JV: There are a lot of audio-visual specialists that install home theatre systems and there are IT dealers delivering data across the computing infrastructure and wireless networks. There is a real opportunity for both sides to build their skill sets. Having skills in both areas helps you move away from the product sale and into the installation part of the equation. You could, for example, conduct surveys to check the signal coverage in a house. These are the value-add opportunities and this is where the convergence is coming from. Resellers just have to get their heads around selling audio-visual and IT products together.
Where would an IT reseller go to learn about audio-visual technology, and vice versa? How do they attain the necessary skills?
JV: It's not easy - you need to build and develop some talent on the other side of the fence. If you are an IT reseller, you might acquire staff with expertise in audio-visual. The other option is to build alliances with partners that are on the other side of the industry and work together.
Can you provide an example of a reseller who has done this successfully?
JV: There are many who have done this well. A prime example is Len Wallis. That company came from an audio background and invested in IT. It has worked very well for them.
What about going the other way? Are there many data resellers starting to move into AV?
JV: In a sense there is nobody specifically. On the retail side, it's the mass merchants who have the big visual display areas. They are the ones who tend to showcase product - and they have always covered both sides.
Having said that, there are other resellers on our books who sell a lot of technology products who are starting to buy these home convergence products from us. They might normally sell computing goods to businesses, but are letting customers know that they can also get good deals on things like plasma screens or gaming systems or media centre PCs. So in short, there are a lot of resellers doing it, but not necessarily through retail display. They are leveraging current relationships with their existing customer base.
What kind of activities are you engaging in to educate resellers about the digital home?
JV: At ExpoTech we have been showing a digital home concept display. It brings together products from several different vendors - resellers are able to see how you can configure these products to work together as a consumer offering.
What technologies do these displays focus on?
JV: We have some key sponsors on display - BenQ, D-Link, Microsoft and Samsung. We have the Media Center Edition (MCE) on display and are demonstrating how using MCE with a wireless network and some plasma screens can distribute content around the home.
Resellers can see us demonstrate how you can watch one piece of media content in one room, while another member of the family is enjoying a totally different piece of media content in another room. Using the notebook products from BenQ and Samsung, we can show how content can be controlled from a device sitting on your coffee table.
D-Link is also demonstrating some home storage technology and its wireless, motion-sensitive cameras, which can be set up your own home security system. It is also demonstrating a media player and an Internet telephone running on Voice over IP.
We have products from many other vendors that could also fit into the digital home vision but these are the guys that sponsored the display this year.
You mentioned gaming as being a key product category. What is Ingram Micro doing in this space?
JV: Gaming is a key part of our go-to-market strategy for the digital home. We have signed up most of the major players and are talking to others - we are very close to making some more announcements in this area. We want to offer a complete solution in the gaming space.
What changes in the digital home market do you expect in the next 12-18 months and how is Ingram Micro preparing itself?
JV: We expect to see continued end-user demand for products in this category as price points continue to drop, particularly on plasmas and LCD TVs. Ingram Micro has the logistical capabilities to provide our customers with easy access to these products as demand grows. We are also expecting a wider acceptance of media home centre technology - we are ensuring we have the alliances in place with the vendors to meet this demand.
What digital home technology particularly excites you? What is on your wish list for the next 12 months?
JV: I am sold on the concept of the home media centre. Having one device that can control the distribution of all this content - it is going to cause a big revolution in this space.
Clearly Microsoft is a key part of that architecture, but an increasing number of hardware vendors are supporting that operating system.
Are we still crystal-ball gazing when it comes to home convergence?
JV: Not anymore. The reality of the digital home is here and now because the products are available. The only question is how we perceive it and how we package it for the consumer.