Ingram welcomes new leadership

CRN: With the financial crisis looming, what is the impact going to be for Australia?

Spierkel: I think it’s a function of what the overall economy is doing here. There are mixed signals out there in terms of what that will mean for Australia.

This is an economy that is heavily based around commodities.

If the commodity prices are dropping, which they are, and if the commodity needs, because of the slowing GDP (Gross Domestic Product) growth is slowing down on a global level, there is probably a risk to the economy here.

There is a big financial banking community here especially in Sydney and Melbourne.

If you look at the macro economic situation, this country exports a lot and if the export values go down a little bit and export volumes slow, in terms of growth rate, which is kind of what is happening, it means the average SMB, as well as large corporate accounts, are probably going to be a lot more cautious.

Not inconsistent with what has been going on everywhere else around the world.

As a major exporter, Australia is very dependent on the growth rates of other countries and if China and India are booming, and you are a major exporter to those markets, those growth rates have slowed down in the past six months and that has a ripple effect right through to the economy.

The IT sector is a microcosm of what is going on now.

It’s not because Ingram isn’t executing well or the IT industry isn’t robust or strong in its own right. Our ability to sell products or capital expenditure products is typically going to be a function of how comfortable companies feel that they can invest in infrastructure for productivity gain.

CRN: How is the economic crisis going to impact on resellers?

Spierkel: Most of the resellers are pretty solid businessmen and women.

We had a huge downturn in the IT industry in 2001/2002 and the beginning of 2003, mostly because of the Y2K (Year 2000) and the Internet bubble bursting.

Everything about tech stocks was overbought and no-one thought things could ever come off as the fantastic growth rates that we had in the late ’90s.

When that happened, somewhere in the order of 20 to 30 percent of all the VARS went into bankruptcy or got bought out or sold their businesses.

That was a huge period of churn over that two years and many of those who came through that became smarter businesspeople, leveraging companies like us and not holding much inventory, moving away from selling hardware into services.

That has been a trend for the past five years.

The VAR community is much stronger now than it was six or seven years ago. Yes, resellers will be touched, there are some weaker resellers out there and no-one is immune.

How steep the decline will be no-one knows for sure.

It won’t be deep, it is likely to be shallow, but more protracted than people would like it to be and could last several quarters.

CRN: Ingram recently received criticism for raising freight charges. What do you think about the move?

Miley: In order for us to continue to make investments, and in my experience the market cares about people in ‘the trenches’ helping them sell, for us to continue to make those investments we have to look at our discretionary spend and this is a major element of our cost structure.

If we had to make a choice between A or B, this is an area that makes sense.

We don’t expect resellers to be overly excited about it, but they understand because they share the same challenges.

They are facing the exact same challenges that Guy has faced here, that I will, and that I have faced in other parts of my career.

CRN: How do you feel about Guy Freeland (MD) leaving?

Spierkel: Guy has served us extremely well and has done a phenomenal job for the company.

But there are times when every company says we are trying to do some things differently and uniquely and bring some new skills to bear.

So with that change point in the company we have executives leaving us and changes through the organisation all over the world. Jay (Miley) has an affinity in coming into this market.

We have a nice transition period here where Guy is being very supportive of working with Jay. Jay comes from New Zealand, which has a lot of similarities to Australia and of which Jay is familiar with.

Change is something you have to embrace, Guy was instrumental in making Tech Pacific a strong organisation, from a financial point of view he was instrumental in affecting the sale of the company to Ingram Micro, improving the profitability and results of this business over the past three- and-a-half years.

Miley: I am excited about coming on board.

From my perspective it’s not something that when I went over to New Zealand that I expected.

(Miley has been with Ingram for more than 14 years across a range of senior roles and since January 2007, was the managing director of Ingram Micro New Zealand).