Three perspectives from inside Ingram Micro
- Gary Lomas – Services Sales Director
- Ovi Gherghel – Director Cloud and Cyber Security
- Julian Thompson – Director of Advanced Solutions
The past two years have seen a seismic shift in how we do business. Not just in where and how we work, but in how businesses have leveraged technology to enable those changes. One notable trend to emerge during the pandemic has been the acceleration of Everything as a Service. It makes sense. In uncertain times, organisations want to keep money in the business. But will this shift to subscription-based business models continue now the dust is settling?
Access over ownership
At the heart of as-a-Service (aaS) is the idea of access over ownership. It started with SaaS. Then PaaS and IaaS come on stream. More recently, all sorts of new offerings are emerging, such as malware as a service, disaster recovery as a service and IOT as a service. This trend is now being felt by brands that sell physical products, with many looking to develop as-a-service offerings. One example of a company that’s successfully innovated in this area is Michelin tyres, who have used IoT and aaS to provide tyres via an as-a-service offering, based on distance travelled. The mainstreaming of IoT will undoubtedly spark more servitization of physical products.
What’s our take on XaaS?
At Ingram Micro, we’re in a unique position to observe what’s happening with XaaS. We’re at the centre of supporting the demand for it today and developing services that will shape its delivery in the future. So, what lies ahead for XaaS? Where are the opportunities? What does it mean for our business? And for our reseller partners? To find answers, we asked three members of Ingram Micro’s leadership team for their opinions on XaaS.
Gary Lomas UK Services Sales Director
What was the most notable effect of the pandemic at Ingram Micro?
GL: “Red tape was thrown out overnight by end customers! Before the pandemic, getting large transformational technology projects deployed could be a slow process. They needed proof of concept, financials to prove ROI, all that. Then we went into lockdown and we had a rush of businesses sending all their staff home with laptops in days. It certainly accelerated the move to cloud and opened up belief in XaaS.”
“At the time, Ingram Micro didn’t have time to package things up into aaS offerings. People just needed kit. Now, as people return to the office, we’re seeing a downstream challenge. Businesses have a lot of kit that’s just sitting on the balance sheet. New aaS options could deal with that. It’s time to imagine those new services.
Do you believe that XaaS is going to continue growing?
GL: “Absolutely! I can see endless possibilities for aaS. Not just technology as a service but much wider XaaS offerings. It could be software, finance and power supply all in one subscription. And that’s where a change of mindset is needed in order to see the full potential of XaaS. You need to think what end customers want and what can be rolled into an as a service package.
What does this mean for resellers?
GL:“Capitalising on the demand for XaaS poses a challenge for the IT channel, without a shadow of a doubt. It’s going to shake up their business models, but we’re here to help them build services. And that’s great because we’re so well positioned for this. We’ve seen the new business model working.”
“Layering will be the way resellers increase revenue through services – set out a basic framework agreement and layer on extra elements for an extra £5 a month per user, depending on what the business wants to achieve. Let me give you an example. We recently went into a retailer to talk about a wide area network to improve connectivity between stores and HQ. This led to discussing what else that network could help the retailer achieve. Now we’re doing a proof of concept for IoT cameras so they can gather customer data as people move around the store.”
“This is why post-sales will become so much more important in future in the XaaS world. It’s where you’ll increase your value to the customer and their value to your bottom line.”
What is key to the success of offering XaaS?
GL: “Experience is a big part of XaaS, because XaaS is not necessarily cheaper. Instead, it offers other things – agility, flexibility, convenience and the predictability of a single subscription price each month. But when people buy a service, they expect it to be a quality experience. I think businesses will also look to XaaS to support in sustainability and their Net Zero strategy. We could see new models of capacity sharing. Imagine – you could grant access to a network or datacenter that’s not being used at certain times of day to share resources.
Gazing into the future, how will Ingram Micro change to support XaaS?
GL: “I think Ingram Micro IM will be a lot different. Services will be a lot easier to consume and they’ll be bought at the point of the technology sale. At the moment, it’s mostly bespoke. This will change. I can see so much potential and I’m going to drive a different agenda for services.”
To pick up on Gary’s point, shifting to XaaS demands a change of mindset as well as an evolution of traditional business models and product life cycles. But he’s in no doubt that there’s a huge opportunity for resellers to capitalise on the XaaS trend – limited only by their own vision and ambition. This is echoed by our next Ingram Micro executive who took us through his thoughts on XaaS and related factors.
Ovi Gherghel Director of Cloud & Cyber Security
What effects did the pandemic have, from your position in Ingram Micro?
OG: “There was a huge acceleration of the move to cloud. Huge. Before the pandemic, we’d seen significant adoption of cloud technologies over the past few years, and we were expecting the upward curve to continue. But the pandemic accelerated it. It was driven by the end-customer need. Businesses needed to work in a remote, secure way. And they realised they could no longer rely on classic infrastructure, like a service room which can only be accessed by certain people.”
Were we ready for that acceleration as a business?
OG: “Yes. In the cloud business within Ingram Micro, we started talking about XaaS over 10 years ago. And we’ve made 11 acquisitions along the way to drive the delivery. Now we have Cloud Blue which is our cloud software and services platform that enables resellers to deliver everything as a service. And that’s important. Because if you speak about it, you have to be able to back it up. I think, looking at a wider context, that’s the biggest gap we’ve seen emerge around XaaS – perception versus reality around what’s possible. Businesses have found out that some things are easier to say than do.”
Do you expect the move to cloud and XaaS to continue?
OG: “Absolutely. The move to cloud is still going. The reason is that technology does not stop evolving. Think back three years. I’d have done this meeting face to face, right? I wouldn’t have even considered Teams, BlueJeans, RingCentral or 8×8. Now it’s the norm. Probably in three or four years time, we are going to meet in Metaverse! Then we will be laughing about having this discussion on Teams.”
“Another key factor for continuing XaaS growth – CIOs want to buy tomorrow’s tech today, and make good decisions. XaaS lets them reverse out of bad decisions more easily and make them able to adapt fast, ready for unforeseen events, like the pandemic. Ultimately, end users will be the main driver of creating new technologies and services. And evolution will never stop.
How do you think the marketplace will change for cloud and XaaS?
OG: “I think we’ll continue to see vendor consolidation and vendors trying to strengthen their position, because businesses want one provider for all of their services. Just look at Microsoft. They’ve made more acquisitions in the past three years than ever before. Now they are a player in UCC and cyber security market. More vendors will follow this model.”
“In terms of how XaaS will look/how it will be delivered in future and what that means for resellers – I think we’ll see solutions created by a pool of vendors and aggregated by a reseller. APIs will mean the end user doesn’t feel like they are using multiple solutions. The reseller will become the trusted partner and single point of contact.”
Is Ingram Micro positioned to support on this?
OG: “Ingram Micro is the only player ready to deliver this. In the cloud business unit, we’ve structured our teams around partner needs and end customers needs, and created a customer success team. We have the right vendor set. We can leverage all three hyperscalers – Microsoft, AWS, and Google Cloud. Plus, security across cloud services. Resellers at all levels can engage with us as we offer three different options to suit different business needs.”
What future predictions do you have for XaaS and cloud?
OG: “My strong belief is that we’re now in the 4th industrial revolution and it’s never going to end. Right now, at least one UK city is planning for self-driving buses. Cloud will be involved there. Staying with transport – car brands are working on subscription services. For example, you buy 150 hours a month, and that would let you use a seven-seater in the morning to do the school run and then drive around in a convertible in the afternoon. But it’s possible that we’re heading to a world with only self-driving cars. My daughter, who is 6, may never get a driving licence.”
“My other predictions? I think we’ll see brands doing more with smart glasses. And holograms will join the hospitality industry.”
Ovi makes an important point about XaaS and aaS in general. It provides agility and adaptability. Scaling up is easy. When business needs change, you can react fast. These are all strong motivators for businesses to adopt an XaaS approach, but there are challenges. This is something that our next executive picked up on, but with a very clear solution.
Julian Thompson Director of Advanced Solutions
What effects did the pandemic have on XaaS, from your position in Ingram Micro?
JT: “Pre-pandemic we were discussing how services/aaS would work. Then the pandemic hits and some of our plans worked well, and some less well. Everyone learned from it. Personally, I think it’s taken longer than expected for businesses to increase use of XaaS. But the pandemic certainly pushed it up the agenda because cash was king.”
Why do you think it’s taking businesses longer to embrace XaaS?
JT: “I think we’re all using it in our personal lives, for example getting dog food on a monthly subscription through Amazon and saving a bit of money. And Office 365 – instead of investing upfront, you can pay a small amount each month? Car leasing is another area where people are comfortable with aaS. But there is a big difference between buying your dog food this way and choosing this model as a way to make a major investment in technology. That said, all the exposure we get to XaaS in our personal lives will definitely encourage business decision makers to consider this option more readily in future.”
What will accelerate the adoption of XaaS?
JT: “We need to think about the move from existing ‘ownership’ model to consumption model – for businesses and resellers. What will make it more appealing? For example, wrapping services around hardware to make it affordable and scalable. Also, It will depend where a business is in their journey. Startups are absolutely going to embrace XaaS. It makes no sense for them to invest hundreds of thousands of pounds in new laptops and phone systems. But for businesses that have an existing estate of equipment, they have to transfer out of that estate and replace it with a consumption model. It means changing everything they’ve done. So that process needs to be smooth and simple, and worth it. Equally, aaS won’t be right for every business.”
How big a part will resellers play in XaaS adoption?
JT: “Resellers will be critical in helping to create these XaaS options and taking them to end customers. But the platforms that let resellers sell and manage services will be a deciding factor in the success of XaaS – and that platform won’t be an Excel spreadsheet! Platforms for aaS need to be easy and transparent. Like how some platforms show you how much you’ve saved. The platforms we use in our personal lives set a level of expectation for our business transactions.”
“We also understand that we need to support those resellers who want to shift to selling more aaS, because they’re no longer going to be doing deals worth £250,000 and getting a percentage. The value of an aaS deal comes over time. And if resellers don’t know how to make that transition and maximise their return, they won’t feel encouraged to go down the aaS path.
Where do you see quick wins for XaaS?
JT: “For end users where having the latest technology really makes a big difference, XaaS can be very attractive. Wrap a solution around the technology which makes it affordable over a period of time and scalable, and provide a continuous service that gives them the ability to always have the latest technology, and XaaS works really well for that business.”
Is Ingram Micro in a position to help resellers offer these services?
JT: “Yes, we’re already doing this. Many of the larger VARs have already created ways to provide aaS solutions and use Ingram Micro to supplement their offering. But for smaller VARs, we have ways to support them to offer XaaS. There’s no need for them to spend their own money creating services. They can just piggyback everything we already do and reap the benefits as we build new technology practices. One of the UK’s biggest VARs adopted this offering early which contributed to their massive success.”
What does this look like in real life?
JT: “To give you an example of going beyond transactional and adding a service element to the solution, let’s talk about a project involving Dublin’s flood defences. To mitigate flooding in heavy rain, they would send out trench diggers to divert the water. The city council wanted to react faster to flooding. So, the partner set them up with sensors to detect rising water levels. But they didn’t stop there. Using big data, they looked at historical flooding patterns, enabling the council to predict problem areas and take preventative measures.”
“XaaS opens up so many opportunities like this to add value, create revenue streams and build lasting relationships.”
What comes across from Gary, Ovi and Julian is that there is great energy around XaaS. Servitization is only going to grow. Yes, business models have to change, but there are paths to follow to achieve this. At Ingram Micro, we’re determined to support our resellers in expanding beyond transactional relationships with their end customers to become technology partners. It’s a good time to capitalise on the momentum of XaaS and start your evolution.
Here at Ingram Micro, we have teams of specialists who are ready, willing and more than able to help you harness the potential of XaaS to enhance your own business.
So, if you’d like to find out how, simply get in touch – https://uk.ingrammicro.eu/contact