Talking with Ingram Micro’s Mike O’Brien

By: Richard “Zippy” Grigonis

Sometimes even the wildest superlatives can hold true. For example, you can say with a straight face that Ingram Micro (News - Alert) Inc. (www.ingrammicro.com) is the world’s largest technology distributor and a leading technology sales, marketing and logistics company. Their immense array of unique marketing programs, outsourced logistics services, technical support, financial services and product aggregation and distribution have touched the workings of 170,000 resellers by distributing and marketing hundreds of thousands of IT products worldwide from nearly 1,400 suppliers.

Ingram Micro Logistics provides broad, customizable services for order management and fulfillment, contract manufacturing, contract warehousing, product procurement, product “pack out” and cartonization, reverse logistics, transportation management, customer care, credit and collection management services and other value chain services. Ingram Micro serves 150 countries and is the only global IT distributor with operations in Asia.

Yours Truly recently had an interesting conversation with Ingram’s Michael O’Brien, a technology solutions engineer.

RG: Is working with the distributor/reseller channel more difficult with IP communications than the old circuit-switched items?

MO: Actually, no. This is a personal observation and may not reflect Ingram Micro’s experience as a whole. But I’d say it’s a lot easier to work them on the IP side, because many of the resellers with which we work are very familiar with the network infrastructure. Additionally, when you get into circuit-switched products and systems, well, look at your traditional PBX (News - Alert). There are many different components that you must size and configure. You’ve got to buy the proper chassis, and so forth. Then there are circuit-switched infrastructure components. We don’t carry them, because we’re attached to the notion that IP communications is where the industry is going. It’s the future of telecom. When you talk about traditional IP telephony, you’re referring to some type of server appliance – whatever your call processor is going to be, along with the licensing. Outside of that, in terms of a typical ‘build” you’re just looking at the phones and the infrastructure.

RG: The big movement for years was to make the network endpoints intelligent, but the network is becoming more intelligent too, interestingly.

The network’s intelligence is increasing simply because when you put more “stuff” on the network, the more management you need over it. Everybody strives for facilitating real-time communications. But if a network is not properly designed, you can lose the advantages afforded by VoIP. In the circuit-switching world, however, you didn’t really have to worry about that, since you were dealing with dedicated bandwidth. But the cost of building and managing those dedicated circuits could become astronomical.

RG: It’s fun to see how IP PBXs can be so inexpensive because in many cases they’re just software and a PC.

MO: One tough aspect in dealing with IP communications is figuring out where the initial cost is going to come from. In order to combat that, all of us at Ingram have trained and we help our resellers convey the long-term values and benefits of such things as unified communications. The conversations are changing from, “What are the up-front costs?” to “What are the costs five years down the road?” That applies to everything from the infrastructure, remote workers, conferencing capabilities, and so forth. Sometimes it’s hard to wrap all that into a good picture. People will indeed save money moving over to this technology. We emphasize that because many people have a tendency to compare sticker prices and they don’t like sticker shock, especially those members of the small and medium-sized business (SMB) world. It’s pretty tough to position IP unless you can demonstrate the ROI. We work pretty hard with many of our partners who see the long-term value of IP communications, but their customers are complaining that they have an old key system in place and it only cost $2,000 so why should they move to a $6,000 system? You’ve got to get them to look beyond the initial costs and instead examine the costs incurred over a longer time interval, and the savings that can result from using IP communications products and services.

RG: The SMB segment has been the “Holy Grail” of VARs, VADs, distributors and integrators for years.

MO: Well, they represent something like 90 percent of the opportunities out there. It’s a big pool. But many people want to compare things in an apples-to-apples manner. If I had a traditional PBX or key system and compared it to an IP-based platform, they’re definitely not going to match up in terms of pricing, but where’s the infrastructure coming from to support the IP PBX? That’s where the other costs are coming in – by adding in all of the other pieces into the IP world. So now, I’ve got everything from my data network, voice network, my video network, wireless capabilities, and so forth – all of them are opened up when you adopt an IP communications environment. Those are the things that go into the sticker shock of the newer solutions, as I mentioned earlier. People find that they didn’t take into account such things as administration. If you have separate voice and data systems, they’ve each got everything from management tools, to administrators, to maintenance contracts, and a supporting infrastructure. So you could actually have two different pools of costs to deal with, versus the costs savings when you converge everything into a single system. You can start minimizing things such as network administration and management tools. You can move to a smaller set of tools, thus saving money. The biggest cost, of course, is the infrastructure. It must be managed and it’s subject to maintenance costs.

RG: Open source telephony is so inexpensive these days, does it interfere with your telecom business?

MO: I can tell you an interesting story in that regard. I lived in a 10-story building in downtown Buffalo, N.Y. Since it was downtown, friends used to stop by from work before starting their weekend activities. It was a nice meeting spot for everybody, but it was a secure building. So I tried configuring an Asterisk (News - Alert) system so that I could use an IP phone to open the locked door downstairs. But when I and my roommate went to configure the system, we ran into some technical roadblocks. And who could we turn to for support of the software? On top of that, there’s still a cost, because you still have to buy the hardware on which the software runs. So you have a hardware investment and you have a support investment for the hardware. Granted, the software running on the hardware is free, but where do you get quick support? The easy answer is that there are a million forums out there, as opposed to picking up the phone and calling the actual vendor, which is what you can do with proprietary systems if anything happens from a software or hardware standpoint. Some vendors offer contracts where I could have had some technician from a company travel to my building and arrive within, say, two to four hours, to either fix or replace everything. In the world of business communications you want peace of mind.

That was my big story to combat open source. Otherwise, open source is great. It’s free. But where do you get help when you need it right away? Many people ask me about using the Linux operating system. But if you look at software vendors that actually use or offer Linux seriously, such as Novell (News - Alert), granted they don’t make a lot of money of the software piece, because Linux is essentially shareware. But these companies do make some money off of supporting their version of it by selling maintenance contracts, the “surround stuff.” If you look at a lot of the IP PBX software that’s out there, the port is the biggest issue. You’re relying on a community to continually develop the program, as opposed to companies that are trying to both make money and make a name for themselves in the industry.

However, consider that Cisco (News - Alert)’s Communication Manager Server is a Linux platform. But they built it and they support it. I’m sure quite a bit of money and effort went into developing that product to bring it up to their standards. You can tell by counting the number of versions released over the past two to three years. Cisco is interesting because they play in so many arenas: Switching, routing, video, security, and now voice. They’ve been around in the grand scheme of things for quite a long time.

RG: Are you dealing with more video and collaboration items?

MO: Yes. That’s because travel is becoming too expensive and time-consuming. For Ingram to send me on the road to locations in two different cities can cost thousands of dollars. Just think of the cost of airfare, hotels, rental cars, food, and on and on. Now consider an organization where a third of their employees are “field-facing” or “externally-facing,” which means they’re not based in one support area; they have many remote and field workers, people resembling myself who every week. You take the costs associated with one traveling employee and multiple it by, say, 200 employees. Suddenly, investing $150,000 upfront in a videoconferencing solution appears to be a no-brainer. That’s why we have to stay on top of things, to gauge how the world is changing. IT

Richard Grigonis is executive editor of TMC (News - Alert)’s IP Communications Group.

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