Ingram Micro 2010 Annual Report Download - page 11

mobility solutions to complement their portfolio of IT products and services. We also continue to build our
presence in CE, physical security and private label through our V7 brand, all of which support our strategy
of diversifying revenue streams and expanding addressable markets. Overall, we believe that our
diversified and evolving product portfolio will provide a solid platform for continued growth.
•Services. IT Services is one of the largest segments of IT spending. We are building our service offerings
which will bring additional value to our customers and strengthen our connection to our resellers’ end-
user customers. We believe that several of our service offerings provide a means to expand our revenue
stream while distinguishing us from our competitors.
Ingram Micro Services Division (North America) continues to develop its managed, cloud, professional
and training services offerings. Managed services utilize application and technology tools, including our
own branded Seismic delivery engine, to more effectively and efficiently manage an end-user’s IT
environment while affording the solution provider significant remote capabilities, service efficiencies and
improvement in profitability. By leveraging our managed services offerings, service providers avoid the
investment in help desk or data centers and, therefore, avoid large server installations needed for
independent service deployment. Service offerings include an outsourced global monitoring and man-
agement service, hosting services, enterprise-class business continuity services and an intelligent
dashboard for the tracking of end-user data to provide reseller partners with product and service sale
leads. Ingram Micro Services Division has also launched a number of services to enable resellers seeking
to offer cloud computing solutions to their customers. Among them is the IngramMicroCloud.com
initiative, which provides our channel partners with a broad portfolio of cloud-specific enablement
resources and service offerings including infrastructure-as-a-service, software-as-a-service, educational
tools, training, and business development resources. While our cloud-related service offerings began in
North America, other regional operations are partnering to provide similar offerings.
Ingram Micro Logistics, our fee-for-service logistics business, provides end-to-end supply-chain services
to manufacturers, software publishers and retailers on a fee-for-service basis. We have extended our
market reach and further diversified our business by offering logistics services to non-IT customers. We
optimize our partners’ supply chains with scalable logistics services that reduce costs, create efficiencies
and improve execution. Ingram Micro Logistics enhances service with high levels of order and inventory
accuracy, on-time shipping, and world-class logistics centers. We specialize in multi-channel solutions
that require flexible scale and a superior end-user experience. Services include supply chain analysis,
order management, product launches and replenishment, warehousing, kitting and assembly, reconfigu-
ration and refurbishment, fulfillment, just-in-time vendor-managed inventory and retail hubs, transpor-
tation management, customer service, returns processing, accounts receivable management, and IT
connectivity. Our initial efforts to build our Ingram Micro Logistics business were focused on North
America. Efforts to globalize our fee-for-service model are progressing, particularly in EMEA where we
are gaining capabilities and expanding our client base.
In addition, we surround products and programs with our own services to resellers, such as technical
support, financing and training. Through our V7 division, we offer an online trade-in program to reward
resellers for responsibly recycling old electronics in our North American market.
•Customers. We are focused on increasing our penetration of the wide range of customers we serve in
each of our regions, as well as extending our reach into new customer segments. Our customer segments
are distinguished by the end-users they serve and the types of products and services they provide. The
small-to-medium sized business (“SMB”) customer segment is generally one of the largest segments of
the IT market in terms of revenue, and typically provides higher gross margins for distributors as it is more
challenging for suppliers to penetrate. Our programs and services are geared to add value to VARs that
serve as technology sources for the SMB market. We serve VARs with a complete “go-to-market”
approach to their business, including logistics; sales; marketing; technical, financial and services support;
enablement training; and solutions development, as well as expand their end-user reach through end-user
demand generation marketing programs and business intelligence tools. Our business evolution strat-
egy — which opened new markets in AIDC/POS, CE, home automation and entertainment, physical
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