Ingram Micro Steps Up Its Cloud Game With New Services

Ingram Micro this week significantly expanded its cloud services and associated channel programs by offering a new app store service through which solution providers can centrally manage cloud applications.

Based on cloud service delivery software developed by Parallels, the Ingram Micro Cloud Marketplace runs in data centers that Ingram gained when it acquired SoftCom, a provider of hosting services, last year.

Speaking at the Ingram Micro Cloud Summit 2014 conference, Renee Bergeron, vice president of managed service and cloud computing at Ingram Micro, said the goal of the service is to streamline the provision and management of cloud applications while allowing solution providers to leverage Ingram Micro to negotiate discounted pricing on cloud services.

“Solution providers can take advantage of channel discounts negotiated with the cloud vendor by Ingram Micro,” said Bergeron. “They can have a single business contract with Ingram Micro.”

In addition to streamlining cloud service management while improving service margins, the Ingram cloud service allows solution providers to retain ownership of the transaction in a way that preserves the equity value of their companies, Bergeron said. In contrast, solution providers that wind up dealing directly with cloud application providers often end up being agents that refer deals rather than an actual reseller of a service. Although in some cases a solution provider may prefer to act as an agent, the Ingram cloud services are designed to allow solution providers to choose when they want to resell a service or merely get paid for referring a customer, she said.

In addition to the cloud service delivery platform, Ingram Micro also announced this week that it is making available several cloud services that include Web hosting, virtual private servers and implementations of Microsoft Exchange managed by Ingram Micro on behalf of solution providers. Depending on the relationship with Ingram Micro, partners can refer customers to those services as an agent, resell them or treat them as a white-box service that they can market under their own brands. In addition, Ingram Micro is making available a variety of “white glove” services that include pre-sales support and professional services delivered by Ingram on behalf of the partner.

Regardless of the model chosen, partnering with Ingram Micro will enable solution providers to cost-effectively deliver low-margin cloud services that enable them to deliver a much broader range of high-margin integration services, Bergeron said.

“Doing it on your own means you can’t scale your cloud business,” she said.

The cloud represents a significant change to the traditional business model of the solution provider.

While cloud computing will be mostly hybrid for the foreseeable future, Bergeron said that for the short term, solution providers are better off setting up separate divisions to sell cloud services. Salespeople who sell on-premise solutions will not focus on selling multi-year cloud services at the expense of an on-premise sale that generates a commission for them that quarter.

Instead, solution providers are better off compensating salespeople for cloud service sales based on their bookings Bergeron said. Within three months of the booking, most solution providers will then make the return on that investment while still enjoying more profitable recurring revenue streams over the life of the cloud service contract, she added.

In addition, rather than focusing on selling IT using a traditional cost-plus model, the cloud creates an opportunity to sell the value of a service directly to line-of-business executives based on the business outcome it enables, she said

“Solution providers are leaving money on the table doing a cost-plus model,” said Bergeron. “The value model is based on the value being brought to the customer business.”

The degree to which solution providers can make that transition will vary widely. In some organizations, selling around the internal IT department isn’t possible. In addition, the vast majority of organizations are using on-premise systems acquired through a cost-plus model alongside their cloud solutions.

Moving to a value sales model requires a more nuanced approach to selling IT solutions, said Tiffani Bova, an industry analyst with Gartner.

“If you go behind the CIO, they will start to close you out of the business,” said Bova. “You need to find a way to make that happen in a good way.”

The good news is that in the age of the cloud, application programming interfaces are making it easier to mask what products and technologies are being used to deliver any given service. As APIs continue to evolve, it will become increasingly difficult for customers to decompose the components of any given IT service as part of an effort to ascertain the true cost of delivering that service. As such, the successful solution provider in the age of the cloud that delivers a compelling custom application experience could wind up with more control of the overall IT environment than ever.

Michael Vizard has been covering IT issues in the enterprise for 25 years as an editor and columnist for publications such as InfoWorld, eWEEK, Baseline, CRN, ComputerWorld and Digital Review.