What’s happening with Cisco and HP around their acquisitions and market strategies is setting up a stage where resellers have to choose one or the other. As a distributor, how do you make sure you give both sides what they need and balance that?
GS: A lot of it is us setting up teams that are very specialised – sometimes it comes down to specialisation capability in a broad category context. Some will come down to dedicated resources for one vendor versus another because there’s a lot of technical expertise and certification we need around their products. So we go down two tracks: What is the solution requirement, either in a market or solution vertical; and focusing on addressing end customers that might have a preference on one or the other. We want to do well with both, and they know that. Would they like to have more dedication in one versus the other? Sure, there are always people trying to get more mind or market share. But our objective is to execute well with both and be their biggest partner. Here fore we have been able to do that with both. Maybe not with Cisco in this country, I’ll give you that, but we are their biggest partner by far globally and we’re not resting on that.
Jay Miley: We have strong relationships with Cisco and HP in this market. I don’t view it as picking one or the other. I view it as the end customer wanting our partners, which we support, to be able to give them advice that’s not biased around the needs of that business. Distribution’s value proposition is about choice. We need to strike the balance between representing both brands and how they compare and differentiate. Just like we do with notebooks in the volume business. It’s just the technologies are more complicated and there are potentially more points of differentiation.
During the Q3 financial announcements, you mentioned investments as a way forward for Ingram. Is there still a lot of investing to do globally and in Australia?
GS: We have done eight over the last two years, and I’m always looking. If you followed us at a high level, you’ll notice a pattern that none of them have been large companies relative to our size, but all of them have been where we’re trying to get a higher degree of value-added elements into our portfolio. If there is a great storage company – and that’s part of our value proposition where we have a gap either with the portfolio or technical/vendor skill set – that’s where we will look to see if it makes sense for us to bolster our capability in those country or in the region. For example, Jay said we didn’t have high-end IBM capability and some other vendors in New Zealand, and we closed the deal with VAD in the first half of last year. It wasn’t a large company, but was respected over there and complementary to the portfolio around strategic business units and capabilities. Without giving anything away, where you see a pattern happening, you shouldn’t be surprised if we make another step. Our balance sheet and cash position has never been better and that gives us flexibility.
Are there still options in Australia?
GS: Absolutely. It’s not trying to buy a big company – it might be something with a real niche in a couple of verticals or vendor product solutions we don’t touch. And there are some of those, for sure. Whether we go hard here or somewhere else will be made at a regional or global level. We might have something in Australian but if we can add two great things in China, and the trajectory is greater, we’ll look at doing those. At any one point in time, there are four or five we are looking at, and our cadence has been to close something once a quarter.
JM: I’m always looking in Australia and am interested in companies that add capability. If there is a gap line-card or product line-up, I’m interested, but it’s more capability discussion. When I reflect on where we are, I think we have many opportunities ahead of us in the areas we are already playing in and it’s about improving our customer services models and engagement model with partners on a variety of dimensions. Once we get that stuff right, whether I’ll need to make investments in acquisitions is up for debate. There are great, innovative companies in Australia.