Taking on new competition

Not happy with the 6000 or so IT resellers it already has, Ingram Micro has set its sights on an estimated 2000 dealers plying their trade in POS and data capture.

It will face stiff competition in trying to win them over because this equipment is already big news in a large number of vertical markets such as retail, hospitality, manufacturing and distribution. Although Ingram is a big fish in the technology pond, it will be the new kid on the block in this market against more established players like Vantex and DH Technology.

Networking and security are being touted as its key differentiator against these new competitors. But the need for these skills will also help Ingram convince some of its existing reseller base into exploring opportunities around these technologies.

Given the nature of its own business, you have to think the distributor might well be one of its new division's first customers.

After all, there's nothing like eating your own dog food when it comes to convincing people you believe the message you're selling them. RFID must be of particular interest to a large distributor of any products. Although tags are probably still too expensive to be rolled out broadly, especially for a company moving the volume of product Ingram is recording every month, it must be tempting to run trials on certain highly desirable lines such as iPods or notebooks.

Ingram's creation of a POS and data capture division locally is a reflection of the global organisation's desire to grow its market. The purchases of US-based Nimax and European-based Symtech Nordic during the past two-and-a-half years was a sure sign of its intent. Both companies specialise in automatic identification and data capture (AIDC) as well as POS.

Last year saw Ingram launching a local solutions division in an attempt to establish itself as a provider of value-added distribution and raise its average margins. In the US, it also made a major move into the consumer market following its purchase of home technology integration distributor, Avad. Maybe that is the next offshoot we can expect to see it launch in Australia.

Further down the local chain, it seems there are already plenty of competitors looking to provide technology services to the consumer and SOHO markets. The latest to come to our attention is IT services provider, AWA. There are plenty of consumers and small business owners out there with little or no technical knowledge who desperately need support. But it is a massively fragmented market and only time will tell if companies such as AWA and Gizmo can establish brands.

My bet is the best established consultants will thrive despite the increased competition and communal marketing power of new competitors. But the introduction of standardised pricing and service levels can only be a good thing for users and will probably make life more difficult for cowboys looking to make an unfair advantage out of customer ignorance.