Ingram Micro CEO Says Windows 7 Not Panacea, but Still PositiveBy Jessica Davis | Print
IT distribution giant Ingram Micro reports better-than-expected results for its third quarter, attributing them to a better demand environment, better currency conditions, and its proactive efforts to engage customers and vendors. And CEO Greg Spierkel says while the company does not view Windows 7 as a panacea, it believes Microsoft's new operating system will make a positive impact on sales in 2010 and into 2011.
They aren't pouring the champagne at IT
distribution giant Ingram Micro, but it's not a drought anymore either.
Ingram Micro attributed a better-than-expected third quarter to improving demand, better currency conditions, and its efforts to engage customers and vendors.
Those more proactive efforts yielded better results in the third quarter, CEO Greg Spierkel tells Channel Insider.
"We were pleasantly surprised," Spierkel says. "Unit shipments were up in double digits."
Ingram Micro, he says, switched its efforts from the difficult cost-cutting initiatives that characterized the first two quarters of the year to more demand-generation work with vendors and customers. Ingram Micro began the effort with some of its largest vendors, looking to make the biggest impact right away, but will be spreading the effort to other vendors.
For example, Ingram Micro is sharing some of its customer analytics with vendors and helping with marketing efforts.
In addition, Spierkel says Ingram Micro changed some of its compensation plans to help "people feel good about the opportunity."
And, overall, these efforts have paid off.
Sales came in at $7.38 billion, an 11 percent decrease from 2008's third quarter, reflecting the ongoing soft economic environment, the company says. But on a sequential basis worldwide sales increased 12 percent. Net income came in at $42.3 million or 25 cents per diluted share in the third quarter, compared with net income of $46.4 million or 27 cents per diluted share for the same quarter a year ago.
And while Ingram Micro's Spierkel couldn't be characterized as bullish about future quarters, he's more optimistic than he's been in the past. For example, he says Ingram Micro is feeling "pretty positive" about the release of Microsoft's new operating system Windows 7 and the new versions of SharePoint and Office coming out of Microsoft.
Consumer pick-up is "going out to the field very well at this stage," Spierkel says, although he declined to provide any numbers.
Corporate demand will come in the second half of next year and into 2011, Spierkel added, including Ingram Micro's own PC refresh, which he says will come in 2010. But he declined to say when it would begin.
"Most businesses have not moved to Vista," he says. "They have not deployed Office 2007. We are typical as a company at Ingram Micro because we are running on an essentially 6- or 7-year-old software platform. I say we are typical because I've talked to a bunch of VARs and they say 50 percent of their customers are on this older platform."
And that means pent-up demand that will require a refresh. Companies will be looking to refresh those PCs to get the new productivity tools and the improved security that's available in Windows 7, says Spierkel.
"I'm not trying to build this up as a panacea, because it's not one," he says. "But it will be better."