Jay Miley, Ingram Micro's MD speaks frankly to CRN and details the path that led the distributor to the sales restructure announced late last year. John Walters, former head of commercial sales and solutions, joined the interview to share his insights.
CRN: Was the sales restructure primarily about getting the enterprise technology business side of Ingram right?
Jay Miley: Actually it's about getting both sides right. My view on it is pretty simple: I believe in two businesses, two distinct businesses that require different activities, different skills sets and different go-to-market approaches in order to be successful.
It's not a matter of one being more important than the other, quite the contrary, the volume business is the biggest piece of our business and the enterprise technology business is a big piece of our business [too]. Its bigger than any of our competitors that you would think of.
CRN: Really, Ingram's enterprise technology business is bigger than its competition?
Miley: Volume business is bigger for us than the enterprise technology business, but if the enterprise technology business was a standalone business - let's just say that it has scale that the competition doesn't have.
CRN: Can you define the difference between the two units?
Miley: I call it enterprise technology, [but] it's not enterprise in the way a vendor sees enterprise. Enterprise to a vendor is about the size of the end-user customer, typically, dependent on X number of seats. Usually somewhere above 500 seats they start talking about enterprise end-user, between 250-500 mid-market and below 250 small to medium.
Our definition is around the type of technology. We'll call it enterprise technologies versus volume technologies. That's how we're splitting things up. In the enterprise technology area for us it's about the data centre, it's about the network, the infrastructure software that plays a role in those two things. We believe that these types of technologies play a role at all levels. Maybe not at the five-seat company but at some level our vendors that play in the data centre, networking, security or virtualisation space have a solution that is geared towards a certain number of seats.
Our volume technology business is around technologies that are more mass market. PCs, desktops, notebooks, printers and consumables we sell, everything from Tom Toms to high end data centre solutions.
We have historically asked our sales reps to care equally about all those things. Now what we're doing is about focusing the mind share of our sales organisation.
In March we put a stake in the ground and said we're going to measure ourselves along two distinct business units: one around the enterprise technology group, one along volume technologies. And David Lenz, manager national and strategic partners, ran the enterprise technology group for us post March and Matthew Sanderson, Ingram Micro's senior director ran the volume business. John [Walters] was a shared resource to both those businesses. Immediately after we made that announcement John and I said we need to align our sales resources to these businesses too, because we have a dilemma.
We ask our sales resources to care about too much. We need to get them focused and so the sales restructure announced late last year was our intention to do exactly what was on the other side of equation, which was, we aligned our vendor teams into either enterprise technology or volume technology, we're now going to align our sales team into those two classifications our well.
And the intention is that the activities and the resources we bring to market will be very, very focused along with two different go-to-markets. One set of resources, with one set of objectives for enterprise technology unit and another set resource run in different plays in the volume technologies.
CRN: Will you be investing in cloud?
Miley: Potentially. There's nothing suggesting that we couldn't have a cloud strategy in the future. You'll see us get more into what I'd say managed services and traditional services out of our enterprise technology business but I think it's a good thing for you to know that it's about the type of technology not the size of the customer.
CRN: When did the enterprise technology side of Ingram become a big player?
Miley: Since, I've been here (November 2008) it's been a large piece of our business. The work that John [Walters] and others did dating back three or four years positioned us in this space so we have a sizable piece of business that on a standalone basis is very relevant and very large.
That being said the announcement we just made (the sales restructure and Walters' exit) is about aligning sales resources to both businesses in a distinct manner so that we get the right skills and the right go-to-market approach.
John Walters: We had resellers which we had a really good relationship with buying enterprise products from a competitor of ours because we couldn't look after them to the level we needed to in the enterprise space.
We had vendors not giving us access to some of their enterprise products which they were instead giving to our competitors because we weren't supporting them or didn't have the structure to support them.
Hence, we set up the solutions group. To me this [latest sales restructure] is just the next evolution. The solutions group was successful but it wasn't going to be able to be really competitively successful to the level we wanted unless we aligned the vendor management teams and the sales teams together, and that's the key to this restructure.
Under Jay's leadership, when he first came in, he took the retail business away from me and gave it to Matt [Sanderson] to align the sales effort with the vendor management. So this is the next iteration. Get retail aligned, get enterprise aligned and get volume aligned.
What it means now is that you've got a sales executive that visits resellers who will now be responsible, at the enterprise level, for looking after approximately 15 vendors. Today they're responsible for around 90 vendors. It's going to be a different style of engagement. There are different skills sets required and the vendor and the reseller should get a better result out of that.
CRN: In practice though you would have had sales people lean one way or another rather than looking after all 90 vendors.
Walters: Different people have different skills sets. Their role was the relationship manager for the account they were responsible for and to take the portfolio of vendors that Ingram has today to market. So inherently they were responsible for 90 vendors.
Under the new structure it will be around a sales exec to get focused around a core set of technologies and vendor products where they can understand how those technologies can be sold and utilised in the market and therefore position that better.
And when you start segmenting other innovative things start happening. Jay talked about other managed services or serviced components in the enterprise. I actually think - and this is the John Walters view on the volume business - if it's got a more dedicated focus you'll see innovation around services there too such as managed print services.
CRN: Are managed print services part of the plan?
Miley: You could draw a logical conclusion that if the print market is evolving in that direction we would have resources that align to that. But that would be an initiative that our volume business will initiate because the technology you're talking about is more of a volume-centric play not a value-centric play.
CRN: Will there be a duplication of vendors?
Miley: For accounts that span the spectrum of technologies we will undoubtedly will be engaging with them with a lot more people, which we do today anyways.
If you're a managed account that spans the spectrum you should be expecting to see an Ingram Micro sales executive from the enterprise technology team trying to sell you solutions and add value to your business around those technology. And you would expect to see another sales exec from Ingram Micro carrying a target and quota and expertise around volume technologies.
CRN: Is there flexibility for a ‘better' deal if a quote spans the spectrum?
Miley: The price aspect of the discussion really is a function of a lot of elements. Competitive landscape, competitive reference as well as the amount of business that the customer does with us. What I would tell you is the reason we're doing this is so we have a more intimate relationship with them and its two distinct business lines.
Walters: if there was a deal from a reseller that spanned both enterprise upgrading their local data centre and they also want to upgrade their network and desktops at the same time the simple answer is this: you would have the enterprise sales exec and the volume sales exec working on that deal together. Will the reseller give us one purchase order that spans both? The answer is, yes. We're not going to make it more difficult for the reseller we're trying to make it better for the reseller.
CRN: For an enterprise technology focused reseller how will their experience with Ingram Micro change?
Miley: They will be engaging with dedicated external outbound sales resources that have subject matter expertise that is deeper tomorrow than it is today because they have a finite list of technologies.
Our intention is to have these folks highly certified on the technologies that they're out in the market promoting. Actually, today, the level of certification is a bit more ad hoc and sporadic than it will be tomorrow. My expectation is that those partners of ours both on the vendor side and on the reseller side that are interested in the enterprise technology space will have a sales resource that's much more qualified and certified.
The other thing I would tell you is around the network server storage quote desk, you will see us expand our investment in that area. We will have larger pool of resources tomorrow than we have today focused on making that quote to purchase order much simpler. And hence you'll have faster turn around times.
This business will have 50 standalone sales people spread around the country in the field out there to do nothing but help our reseller partners. To take the defined technology set to the market. My experience has been if you want results you need to focus resources.
The message I was getting loud and clear is we need a sales organisation that is focused.
CRN: Is it the end of the restructure?
Miley: You never say never. Will we continue to improve? Absolutely. Do I think the hard yards are over? Yes, once we're over the implementation this will be successful. I won't rule out future iterations.
In March, we aligned our vendor team into this business unit structure; we then made a declaration to the market that we're working on two business. We also bought a third business.
But in March in particular we aligned our core business at the same time. Because of the state of market we took some cost structures for the future, a lot of that was in back office areas. But in the front office we made it clear that we own two businesses and what we just announced is the alignment of the sales into that pool.
This is not a cost exercise.