Ingram Micro Inc. IM is aggressively pushing into the fast growing cloud computing market. The company recently announced the availability of its Cloud Marketplace in India through which channel partners and professionals can avail the required cloud services. First launched in North America, Cloud Marketplace generated a huge response, which prompted the company to launch it globally.
The Ingram Micro Cloud Marketplace has more than 200 cloud-based solutions from over 70 vendors, which include salesforce.com CRM, VMware VMW and AVG Technologies.
Notably, featuring Microsoft’s MSFT Office 365 via the Microsoft Cloud Solution Provider (CSP) program, Ingram Micro Cloud Marketplace will be extremely beneficial for the channel partners as it will enhance the customer’s overall support experience and accelerate the growth of its cloud businesses.
Moreover, it will broaden Ingram Micro’s capabilities as a cloud solution provider, thereby helping it to capitalize on the increasing opportunities in the cloud computing market. The accessibility will also be a good source of monthly recurring revenues for Ingram Micro.
Ingram Micro's initiative comes at an opportune moment as cost benefits of cloud computing are compelling companies to engage in massive information technology restructuring and upgrades.
According to the latest study by IHS Inc., spending on cloud-based services should surge almost three times and reach $235 billion in 2017 from $78.2 billion in 2011.
Further, according to IDC, India is witnessing a huge demand for cloud services. Public cloud services are presently valued at $440 million. Moreover, the same is projected to increase to $1128 million by 2019, with a compound annual growth rate (CAGR) of 26.6%. We expect this to work in favor of distributors like Ingram.
Separately, Ingram Micro has been gaining from increased orders from small & medium business (SMB) organizations in Europe, particularly in Germany and the U.K. Ingram is now targeting the SMB segment in a more comprehensive way, not just in Europe but across all regions and now in the Asian region also.
Ingram Micro has been striking distribution deals with a number of original equipment manufacturers thus expanding its product portfolio. Moreover, Ingram Micro's exposure in cloud computing products is expected to remain its key growth driver.
However, not all is hunky dory for the distributor. While its services business is seeing encouraging growth, the company remains largely dependent on the PC market where shipments remain sluggish. According to Gartner’s recent predictions for 2015 released in September, PC shipments (including premium ultramobiles) will decline 7.3% year over year, primarily due to the lack of device replacement and a strong dollar.
Currently, Ingram Micro carries a Zacks Rank #3 (Hold).
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