Ingram Micro Holding Corporation (INGM) Earnings Call Transcript & Summary

Good morning. Please give a warm welcome to Willa McManmon, Ingram Micro's Vice President, Investor Relations.

Good morning, and thank you for joining us today both here in Dallas and virtually. Before we begin, please take a moment to review the disclaimer slide on the screen, and I'll just go through some legal language. During today's session, we will make forward-looking statements that are subject to risks that could cause our actual results to differ materially from today's presentation. Please refer to the cautionary statement and risks disclosed in our SEC filings. Information on non-GAAP financial measures that we discuss today, including reconciliations to the most directly comparable GAAP measures can be found in today's materials. Now let's turn to the agenda. To start the day, Paul Bay will discuss our evolution and how we're expanding our role beyond traditional distribution. Sanjib Sahoo will take a deeper dive into our operating model and strategy. We'll then break for lunch. After lunch, you'll hear directly from some of our customers our group presidents. Then Mike Zilis and team will discuss our operating model, capital allocation priorities and long-term financial framework. We'll conclude the formal program with a Q&A session. For those of you who are joining us virtually, you'll see the Q&A tab on your screen. Please submit your questions through that tab. And with that, I'll give the floor to Paul.

Thank you, Willa. Good day, everyone. First, I want to start by saying thank you for joining us here, those of you here in the room with us. Also those of you that are joining us remotely via the webcast. It's been a super busy morning for Ingram Micro already. We actually got to ring the opening bell, which happened right here this morning. So a great honor after going public in 2024 and getting to ring the opening bell. So we're really excited here, be the first company that's actually hosting a Capital Markets Day here in the New York, Texas Stock Exchange. So pretty exciting. We look forward to a great day. I have to say I'm more excited now than I've ever been in my almost 30-year career in technology. So let's go ahead and get started. First, I'd like to introduce you to our executive team. Many of them, they're spread throughout the room today. Many of them you'll see presenting. So we're excited to let you get a view into the areas of operation that they have. Willa walk through that. They have many years of collective experience in technology, in business. And if actually you put it all together, just from an Ingram Micro standpoint, we actually have more than 200 years' worth of Ingram Micro experience. So a very seasoned team, and I'm honored and privileged to be able to lead such a great organization. I may be biased, but I think we have the best team in the industry. So let's start today. We're talking about the advanced logistics center that many of you got to tour. Hopefully, you saw that it demonstrated scale, operational discipline, automation, the ability to really effectively move technology efficiently around the world. But I hope you actually experienced more showing you how we're using technology, the data, the intelligence, the way we're changing to how work is getting done in the operation, all the way from order entry, all the way through our ALC. And the point of today is to really take you on a transformational journey. We're going to show you how we're moving from a distribution to the industry's first intelligent B2B operating system. We're going to be bringing intelligence at scale, solving complexity and removing friction. We're driving growth with new technologies and new businesses, and we're adding a life cycle services business with our supply chain services, along with our current IT asset disposition business and our reverse logistics and repair business. We're creating higher value for our customers, for our vendors and for Ingram Micro. We believe we're the only company using intelligence to bring a B2B commerce and operations together to drive a new level of value. And today, you're going to get a deeper insight to that. We're fundamentally a different company. You'll see the growth that we're driving, how we're generating that growth as well as our 3-year projection. So let's start with distribution. Distribution is a great business to be in. The total addressable market that we have, it's making it more relevant now than ever. It lowers costs, complexity. It lowers the need for capital and at scale. The industry is a collection of B2Bs depending on each other for growth and value creation. IDC predicts a $5 trillion TAM and it was just $2 billion to $3 trillion just a few years ago. So why Ingram Micro? Number one, Ingram Micro has unrivaled global reach, serving 165,000 customers, 1,500 vendor partners on 6 different continents. We have the ability to service 90% of the world's population. But it's not just about the diversity that we have or the reach that we have. It's really about the revenue reach that we have. And in Q2, North America represented 36% of our business; Asia Pacific, 30%; EMEA, 26%; and Latin America, 8%. So great diversity in that revenue and reach we have. Number two, the broadest solutions and service offerings across the entire technology life cycle. And that's important because 6 different products are made up of our average deployment that we invoice with our customers. Number three, investing ahead of the trends. We have always led the way in distribution. We invested early in highly technical advanced solutions, our specialty business, things like data capture and point-of-sale, unified communication and collaboration. We did this both organically and through acquisitions in the early days. We did this again with cloud, where we've announced that we've invested over $650 million in our cloud and our cloud platform. We've invested in our digital platform over the past few years, and now we're bringing the only intelligent operating system for B2B. In addition, we're creating new routes to market, capitalizing on the technology and AI boom. And finally, we're investing in our life cycle services business. The fourth reason why Ingram Micro is our track record of profitable growth and 47 years of proven success. So how do we operate differently? Customers describe us as a multiplier, an extension of their business. Ingram Micro solves complexity over thousands of business-to-businesses and hundreds of markets. A great example, as you can see here, is Chris Leahy, who is the Chairperson, President and CEO of CDW. They're a customer. People ask me quite often, the CDW a customer. They're one of our most valued and largest customers. And they value our partnership because of our scale and innovation. We're an extension of their business. Even with their size, we help augment what they're doing every day. And this strategy of putting the customer in the middle has been part of what we're doing and core to our business for the past 4 years. Again, it's all designed with the customer in the middle. There's a real differentiation in the way we operate, drive growth and innovate because our strategies are designed with our customer right in the middle of everything we do. We build value by servicing the entire life cycle, how technology is chosen, how technology is purchased how it's installed and integrated, how it's refreshed and disposed of and the value we create reduces operating cost, accelerates growth improves productivity and removing friction and time for our customers. These strategies, as I mentioned, have shaped and we've been using for the last several years are very customer-focused, focus on their experiences focus on building more cloud and consumption business, wrapping that all around with more services, operational transformation with an intelligent platform using intelligence to remove complexity and continuing to drive operational excellence, which has been in our DNA for dozens of years. These strategies and priorities create value with intelligence to uncover and drive new growth and an operating system, which supports faster time to market for our customers, maximizing value for them and for Ingram Micro. Ingram is the fuel and growth for our customers in every segment, we give our customers a way to pilot, to enter new markets, to enter new categories without having to make the investment or the capital or taking on the risk. We are their partner to help grow and resources to innovate. Let me give you an example, our Enable AI program, which helps customers understand, grow and deliver AI at scale. Customers don't have the skill sets. They don't have the resources, they don't have the competencies, and we augment all of these together, and we're perfectly positioned to help capture this market. Customers need a business partner that's adding value across the technology life cycle to reduce complexity. A couple of examples that you can see here is our technical centers of excellence. We have one of these in each of our 4 regions. They use our expertise to expand the offerings, presales, post-sales support, integration. Actually, from a post-sales support, we receive calls Level 1 and Level 2 calls directly from the end users on behalf of our vendors and our customers, and we're able to do that for them on a post sale standpoint. Technology solutioning, the broad technology categories and vendor solutions Again, our average products of 6 different products or services helps our customers save time and help them save money. Enablement with high level of trust to enter new markets training programs, things like financing, you'll hear more about today. These insights points our customers to new growth opportunities in adjacent markets, cross-selling, upselling, finding new white space and demand generation, helping them find new logos with richer engagement and broader reach. Many times, our customers have told me, "Paul, you actually know more about my end user than I do." And why is that? It's because of the intelligence we're bringing. One example that you hear us talk about is IDA, our Intelligent Digital Assistant. This is a quantifiable example and our first step towards our intelligence at scale, converting it into commercial action. In Q2, we delivered $1 billion of net new revenue at 4x the conversion rate at a higher margin. Today, you're going to hear from 4 different customers from each of the different regions. And you're going to hear from them about how Ingram Micro is an indispensable business partner to them. So put simply, Ingram Micro's intelligence, expertise and resources is a fuel for our customers, and we're providing them more ways in our operating system to help them deliver new growth at higher value. So with all this technology we talk about, depending on what shows up on the every morning's headlines, technology is great. But at the end of the day, people, relationships and trust matter, especially when it comes to the growth of AI. A great example of this is Jay Miley, who's President and CEO of Myriad360. They're a company that went from under $200 million to over $1 billion. And they did this was supported by our relationship and they're willing to invest with us. So let's hear a moment from Jay. [Presentation]

Ingram does take a longer-term perspective, and they're making investments in emerging technologies that, quite frankly, I'm not able to make quite yet because the market is not as mature or maybe it's a little slower to adopt, but they're making those investments for partners like me. And it's, quite frankly, enabling us to adopt and promote and sell technologies that we otherwise most likely would not. They are leveraging AI in ways that are -- some of their competitors just quite frankly, aren't. And it's making a real impact on our business. It's making us be more agile with our clients is helping us be much quicker to market on quotes. Speed really does matter in an industry like ours where change happens every day. Income really is a lot of the hard work upfront to make our lives easier. But quite honestly, the true differentiator is the people. The people in the business really matter. We are in a people business. AI is changing the world, and I understand that companies like mine and Ingram Micro are really levering it to scale their businesses more effectively. But at the end of the day, it's a people business, and Ingram really does the people think as well.

So there's a couple of things I would take away from Jay's comments. Ingram Micro takes a longer-term perspective. We're adopting promoting and helping them deliver technicians that he wouldn't be able to do on their own. Speed matters. We're doing the hard work for them, relationships, people and trust drive growth. And I'll add that by using our technology and intelligence, he's able to find scale that hasn't been done before. So the ecosystem we're operating in, the lines are blurring based off what vendors are doing, what Ingram Micro is doing, what our customers are doing. This is due to the complexity and specialization. So what are we seeing in the market? Number one, vendors or customers, they look to Ingram Micro to provide reach and specialized skills. Number two, customers or vendors they're providing their own specialized offerings and their IP that they want to be able to help service their partners in the ecosystem. And number three, Ingram Micro is a service aggregator, right in the middle of how solutions and services are designed, built and delivered. And we have anticipated this change over the last 5 years and these investments perfectly position us to grow. As these school quotes scroll through, there's a couple of takeaways I want you to hear mid-market and SMB is a fragmented and untapped and distribution matters. Vendors compensate us as a global partner to help them capture growth where they can't reach. Hyperscalers, they're investing in us because their model isn't for go-to market or enablement or finding net new partners and complexity. Complexity is a core competency. We simplify and scale it, no matter the technology or category. Businesses aren't buying the outcomes. Our businesses aren't buying technology, business are buying outcomes and we scale outcomes. Our growth also comes from bringing more technology from more geographic locations, our reach our portfolio, enabling new technologies, whether it's AI, to Neoclouds, providing access to wrapping growing solutions, areas like entropic or partners like entropic and open adding consumption models and actively deploying and enabling net new emerging vendors. Being able to provide a better way for our customers to grow, operate and service differently. We're investing in ways to generate more growth across the entire technology life cycle. So let's stay on the theme of higher value. Services across the entire customer life cycle gives Ingram new ways to expand to new markets, modernize and monetize more increased share of that $5 trillion TAM I mentioned. Those that saw the ALC tour today, so state-of-the-art automation, visualization and data management, inventory optimization, real-time KPIs and analytics that's providing for us a whole new profitable business for us to get into. So let me give you a couple of examples of our life cycle services business. First, the supply chain services. It's aimed directly at our industry and other adjacencies. And for reference, in 2022, we sold our logistics business for $3 billion on $1.7 billion worth of revenue and we're back with even more automation, efficiencies and intelligence. We're not investing in warehouse capacity. We're actually building or creating it. So we're creating that space that you saw to be able to give us the opportunity from a supply chain system standpoint. Secondly, our IT asset disposition and reverse logistics and repair business. This is all part of the circular economy and we're going to continue to focus on how we can provide net new value-added services, adding new customers. We're adding AI when the constraints in AI, older technology many times is worth as much as the new technology. And we're doing it with a responsible and the strict data requirements and sustainability requirements that global companies require of us. We have the skills the competencies, the scale of the business, and we're a safe, secure, trusted partner. These business create resiliency and provides upside for us in a higher-value market. So our broad portfolio of solutions with our life cycle services and global reach is a strategic advantage. Where does the growth come from? Our growth comes from bringing new markets more efficiently within the SMB market. Hyperscalers depend on us to grow with AI, the new frontier with new customers and new vendors. If you look at consumption, IDC forecast consumption to grow by $1.3 trillion by 2029. It's a new way of how cloud is being bought, metered and serviced. The key insight here is routes to market for the mid-market and SMB do not exist today. We're building it. The channel is even more important with AI solutions new growth comes from 3 opportunities that we see. One is reselling AI, consumption, metering, the telemetry that's required. It's all built into Xvantage. Number two, attaching professional services as deployment, governance, driving adoption and operations; and number three, new genic services with field deployment engineers, the FDE model, and we're already investing ahead of the curve with this. and it's working. We hold Microsoft AI apps specialization. We're building custom agents today for SMBs. And we're building the same for AWS and Google. We're creating a new pipeline of growth. So why do we win with AI? Only Ingram Micro has that unparalleled global reach, we can serve with AI for our customers, we can recruit and enable new ones. We've got a multiyear head start with our platform, bringing hardware consumption, cloud and services, all to the single pane of glass and platform. The co-investments we're making with hyperscalers and our to bring AI to these frontier customers and expand the TAM that we're in. The AI ecosystem is building supply. We're building a scalable route to market. We've had conversations with many technology industry analysts about our strategy and around Xvantage and our intelligent B2B operating system. We receive their input help us explain better this positive new approach that we're taking to the market. And the industry analysts have said, one, it removes friction. Two, it provides a unique service layer. Three, it's an intelligent operating system, which is providing a deeper integration. And four, it delivers higher retention and switching costs. Here's a quote you can see here from Steven Dickens, who I believe is here virtually with us. today. And Steven is exactly right. The moat around our ecosystem that we've built allows us to serve far more of that $5 trillion TAM than traditional distributors, which brings me to take a little bit of a deeper look at Xvantage. It's our vehicle and our platform for growth and intelligence at scale. It's the foundation for our intelligent operating system. For us, you've heard us talk about there's really 3 phases of Xvantage and our platform business. Number one, remove friction and operating expense. Number two, provide demand generation, how do we go from being reactive to proactive. And number three, use our data and convert it into intelligence with the buying signals that drives actions and outcomes. You're going to hear a lot about that here shortly from Sanjib Sahoo, who is going to be up next. So you combine that with our people and our reach, and we're delivering to our customers more speed, more scale and more service to give them a better experience. And our innovation doesn't end with go-to-market. We're building more intelligent ways for B2Bs to transact and operate, which is powering our intelligent operating system, turning intelligence into business value at scale. And I want to be clear. we're building this technology. Our global data mesh, we started. It all starts with the data, as we know, and we've been on this journey for a few years now. We have more than 400 machine learning AI models that have been training for over a year. they're better, they're smarter. They're learning every day. This is all created by thousands of Ingram Micro developers and engineers. We have over 30 patents pending and 8 that have been approved. This demonstrates our commitment to be an innovator, serving the industry and brand new ways. And now we have our first unified platform operating model, which we call our Palm model. Why does that matter? Because we're adding operating leverage to our largest countries. You build, you standardize, you innovate once and you can scale it globally anywhere. So we're taking a fragmented B2B industry, and we're creating this B2C experience for our partners. So something happened, this is great. We're super proud to talk about. This something happened last year. We actually had Stanford University reach out to us and do a case study on us. So they proactively reached out to us. And this was because we were taking a start-up mentality, basically actively disrupting a 47-year-old business model. Why were we doing this? It's to be the platform where B2Bs can come, grow, expand, scale and service their partners differently. So the Stanford School graduate school of business, [indiscernible], a professor there, and he's an expert in start-ups. And he said, "Ingram Micro, is transforming while performing. They're actually using this case study as part of their graduate studies at Stanford now. " So put simply, Ingram Micro is something worth investing in. Ingram Micro's business model allows us to capture the growing markets, hardware, software, cloud, subscription, consumption and the services, all from the single platform. The growing complexity of AI, many technology solutions, they need a simplified go-to-market and point solutions don't play anymore. Customers and vendors need workloads that are orchestrated in Harmony. And our business model fits perfectly right in the center of an entirely new growing ecosystem where the B2Bs and opening new routes to market for mid-market and SMB that we serve every day. And you put this all together with our intelligent operating system, which gives us operating leverage and a path to disrupt legacy models with a different value proposition. So what you're going to see throughout today is why Ingram Micro. Again, our unparalleled reach that we have, 90% of the world's population scale that generates value. excellent global revenue diversification, and we do it with the right business practices in every country we operate in. We have the largest portfolio of solutions and services, and it continues to grow with AI. Our life cycle services business, ITAD, reverse logistics and repair and getting back into the supply chain services business. We're continuing, and we will continue to invest ahead of the trends. We've always led the way in distribution. We've invested in highly technical advanced solutions and specialty services. We did this again in cloud. We're creating new routes to market for AI, capitalizing on the technology and AI boom. We invested in our digital platform, and now we're building the industry's only intelligent operating system for B2B. Our track record of profitable growth, we had a very solid Q1. We had the best Q2 in company history, and the second half is shaping up nicely. You'll see the 3-year plan, which reflects growth and innovation. And Mike will cover this later on today, but this really indicates that the momentum that we're building. So with that, I'd like to turn the stage over to Sanjib Sahoo, who is our President of Global Platforms Group. So please join me on stage, Sanjib. He's going to show all this all comes together and comes to life. Thank you.

Good morning. I'm going to talk about intelligence to impact when my slides come up. That's okay. And Paul talked a lot about intelligence and scale and how we are becoming a different company. Today, I'm going to talk about the operating model, how we are changing it and how we are advancing our strategy to drive new value creation through intelligence. About 5 years ago, I came from Ingram Micro from B2B and B2C. Another very interesting thing that attracted me that we sit at the center of the technology ecosystem. That's very unique. And today, that industry has a problem. Our industry has an intelligence problem. And let me tell you why. When you look at distribution, it started with hardware. The vendors went to distributors to resellers to end customers was primarily hardware and the motion was inventory center, you buy, you hold, you sell, you came from logistics, financing, you created a channel. There was a lot of friction. There was a lot of complexity by doing that. Just imagine the complexity. A single court took 3 companies, 12 people and 72 hours. That is how this industry operated. Over the last decade, then came cloud. onetime transactions change to subscription models, consumption models changed. And what is more important, as you heard from Paul, the lines were blurring. It created more complexity with billing and coating and the line started to blur. Then came another major transformation, we all know called AI. What AI did was it added way more complexity, how you solutionize. As you heard, vendors become customers, customers or vendors. So today, we have an ecosystem problem and complexity is rising higher than we can absorb it. Their bespoke solutions, tools, changing every day, a lot of complexity. What was the linear network once has become like this. We have our vendors, end customers, customers, service providers, hyperscalers, AI companies, financing and logistics. Everybody is going to everybody. That's a lot of complexity. And can we solve complexity by adding way more complexity by building way more tools, how do we solve it? Because the ecosystem has changed, but we are trying to solve the same way. Distribution was designed to move products through a linear chain. It is good. It was valued to a product. But today, what you see from all this network is it requests intelligence. Now let me start and define what is intelligence. Intelligence is not AI. AI is the technology. Intelligence simply is understanding what happened from this complicated network, why it happened? And what can happen next? And how do you understand and take action to predict a better outcome? Simply put, this ecosystem creates a lot of signals. How do you understand the context from the signal and drive outcome? Simply put, that is intelligence. And that is the connective tissue today. That is ecosystem needs a connective tissue, which is agnostic, and we are right at the center of that ecosystem being that intelligence layer. Now this problem cannot be solved by connecting systems. You can connect systems, bespoke solutions. Today, we have to combine intelligence because intelligence will open new routes to market. Complexity was a tax that we paid for this ecosystem. Simplicity is the opportunity. And today, intelligence drives that simplicity and simplifies the ecosystem. It connects all these signals and drives outcomes. Now what is the signal. It's not a transaction. Imagine a customer doing a porting request. Imagine a customer doing a financial inquiry, how do we learn from that and drive demand or aggregate new opportunities. If you look at how we started our journey. We started building a platform to digitize our connection with our customers and vendors better because there was so much complexity, fragmentation and friction. Xvantage started to digitize that. As we went through the journey, we found out that it's not that digitization, it brings in transactions. We started building intelligence then you realize that the ecosystem has changed. So today, we have to bring in a new way to connect demand and supply. Distribution was connecting supply to demand. Today, with our intelligent platform, we are connecting demand to supply. No, demand and supply have changed. Let's look at our business for a second. If you look at our supply side, our vendors, we have a long tail of vendors. Today, you heard a single solution takes 6 vendors to aggregate accumulate. The long tail vendors are looking for being part of a multi-vendor solution. They're looking for how they can generate demand across the other side. They're looking for growth which they do not get access to the channel, but to service them for a distributor, it takes a lot of effort and scale and cost. If you look at the big vendors, the global vendors, the hyperscalers, the #1 thing that they want is access to net new SMBs or long tail because they want demand generation. I'll talk about how we can get there. They also want intelligence provided to them for their own product to supply chain. That's what they want today. And anyways, we are working with them to cater to the enterprise player in the business. Look at our demand side, our customers, the long tail SMB and growth. As you heard from Paul, this is where the opportunity is. It requires a lot of scale and ability to actually address the long tail. You have to automate the experience, increase their value. It requires more of guidance with them. However, if you look at the mid-market, the needs are different. They need more outcome, more of a frontier model. They look for increasing share of wallet, looking at solutioning, looking at outcome, different needs. The enterprise, which we do all the time with our business, they need efficiency, they need scale. They need automation. So the bigger customers need orchestration, the mid-market needs outcome and the long tail needs guidance. How do you cater to these needs through a single platform? When we started this journey, we thought about how do we connect demand and supply. So we realized the bigger vendors and the enterprise was more efficient in automation, which platform was accelerating. But then we realized that for the long tail, we need a platform-led approach, a platform that can connect with automation. But there is an interesting thing that happened after that. As we are trying to build that long-tail approach. Our industry has been changing. What was fulfillment is today context, life cycle, attach bundling because there's no one solution and solutioning together, packaging and most importantly, demand generation. So you see the life cycle even the margin economics are changing. What was rate, GP rate is right now, the dollars to the life cycle, bundling solutioning, demand generation, how do we drive demand generation in the long tail, the long tail and it's complex, it's difficult to drive that value in the long tail because change is happening all the time. Solutions coming all the time, but it's our biggest opportunity. Today, intelligence helps us to play in that long tail. [Presentation]

Ingram Micro is setting the direction of the industry rather than responding to it. Every distributor has tried to reach the long tail of their end customers or the channel partners' customers by lowering the cost of a transaction. Ingram Micro is lowering the cost of a relationship, which is the constraint that actually binds.

So the true value will come from automation to lower the cost, but really giving guidance through intelligence that will improve the value of the relationship kind of like a relationship leverage. Now in our journey, we see this is not just data. B2B is complex. Many B2B companies have data. Some have insights Few have intelligence, fewer have intelligence at scale. Today, we are uniquely positioned to deliver actionable intelligence at scale. And let me tell you why. In that complicated connected ecosystem where everyone is going to everyone today, we have built a great reach and network. We have 165,000 customers. We have 1,500 vendors through the same network. We have millions of end customers thousands of services. So far, it was interesting. We had a distribution business. We built a great network. Interestingly, last few years, as we are building the platform, we have built an information network which processes today 250 million events daily. These events are signals. These events are telling you something. And if you do not act on the signal on a transaction, you are leaving unrealized value on the table. Today, the demand generation is based on this signal turn to opportunity. When you look at your phone, you have an operating system. But you may not know that operating system. Every day that operating system looks at your application, memory, storage, takes complexity out and gives you a better outcome. Who is that operating system who is in the center, trying to take complexity out with changes every day and giving a better outcome and most importantly, driving demand. Keep in mind, demand doesn't start with an order. It starts with a signal. And how do we learn the signal to understand that demand is already there, how do you go and find it through the intelligence and action. So who can find it? And I'm going to tell you why we are positioned to find that demand. Now let's look at something more interesting. What was the linear value chain today. Through our platform, and we brought in the transactions has become a different chain. Those events and signals fed with our context of many, many years, then we can reason and action, drive an outcome and recommend. This is creating a new value loop because signals reveal opportunities. Context determines why they matter. So this has given us this new real that can find new ways and new routes to market that we can go forward. And let me give you some examples. Today, with a couple of our top vendors and hyperscalers we are thinking about combining intelligence. And when we combine intelligence with their signals with our signals, imagine attach data, refreshed data bought-in we can now play in the white space by combining that intelligence and drive actionable agent. This is actually we are doing today. This is not just agents building. This is the combination of intelligence that we are starting to build right now. Let's look at AI. We all know with AI, you cannot build one solution. If you look at AI, it touches multiple layers. You had a unified platform with hardware consumption, subscription services because AI goes to multiple layers. And if you look at the route to market, enterprise, they're primarily building. They know what they want, they're fulfilling. Mid-market is still on the frontier model looking at the outcome. SMB, it's guidance. They're still building the infrastructure and the data center. But what is more important is the life cycle. It's not point of time. If you look at how AI is built, it's a journey. You have to go through deploy, govern, adopt and operate. So our position at the center of this ecosystem, opening new routes to market with customers, vendors, financing gives us a unique opportunity. Our network is strong. Our platform build the automation and integrations brought in the transactions. The transactions are giving signals. And today, our intelligence, along with that is making us an opportunity to open new routes to market. and we are becoming that intelligent operating system. Now you might ask the question, why us? Because AI models can be replicated, AI can be rented. You cannot replicate or rent the operating context. Ingram Micro has 47 years of history of operations. We aggregate all the data. We look at our platform to bring in signals through various experiences. And then we have built our technology foundation. That is creating a unique moat for us to play this agnostic operating system for the B2B. Now this does happen 1 day. This was years in the coming. And as you heard today, it all starts with people. Now we had a great distribution DNA for many years with a great experienced people. but we injected a platform DNA in that ecosystem by hiring more than hundreds of people from tech companies and Silicon Valley companies. And they combine together. They bring in the experience and the expertise. Let's hear from a couple of them how they work together. [Presentation]

My background is in building consumer scale data and intelligence systems at Instagram and other e-commerce businesses, where personalization and recommendations, for example, need to run in real time for millions of people. At Ingram, data flows through millions of transactions on our ecosystems from numerous systems and sources, including partner relationships, pricing, customer orders, financing, logistics, et cetera. We have built our real-time data mesh with harmonized data to feed context to our EI factory, and this is our foundation. We are moving from connecting systems to combining intelligence. While frontier AI models are becoming a commodity, what becomes a differentiator is the operating history and context. For example, our platform knows who the partner is, what they buy, what they renew, what they can finance and how they execute. So recommendation lands in context, not in a vacuum. I've spent 30 years on the business side of technology. In the last 20 of it in distribution. And what we've seen is more of a linear progression. So going from phone calls to faxes, then to e-mail and then to e-commerce. And what's different now is we're seeing an exponential change. This is about expanding the reach of our partners. So for example, being able to do outreach to tens of thousands, if not hundreds of thousands of additional partners that maybe they wouldn't have been able to engage with before. So the agents have enabled them to have a broader reach more intelligent reach and be able to add more value in all of their interactions. And this is what makes our approach no is the combination of the intelligence, the genetic capabilities and our operating model and our industry knowledge that makes it truly unique and is providing a value proposition that is getting a tremendous response from all of our partners.

So our technology teams have built a patented technology mode. It's a journey. It started first by building the platform foundation, the architecture, the data engine experience layer, 42 million lines of code homegrown in the last few years. On top of the platform then we built a real-time data mesh. And what does it do? The platform experience bring in transactions but it adds the context with 47 years of data to one source of truth, but 250 million events and signals processing every day. Then we built our custom AI factory. How do these AI models become production grid? How can we add a combination of context and the intelligence, the models together? On top of that, we started building the journey. You cannot automate or identify a process that is broken. How do you go end-to-end with the journey to build on top of that. Then we built all the models. You heard about it today from Paul homegrown machine learning and AI models. That's why today, we have that intelligence foundation that is helping us to go and find new opportunities. And it's a platform which is built once and can be delivered to many multiple segments of customers, multiple size of vendors, different countries, we got small. We have taken a platform approach. And to do this, we have actually partnered with innovators in the industry. This is a complicated problem to solve together. And together, we are bringing this innovation in this ecosystem. Now where are we in this journey? Today, we have 2 of the 57 countries alive on the platform. And in those countries, about 80% of the revenue goes on the platform. And different countries are at a different maturity level because you have to understand that when you build the capability of a platform, they gives them signals and transactions while you get benefits, but capability and intelligence feeds each other. It keeps on growing. So we have capabilities feeding intelligence and intelligence outcome. And today, we are starting to have -- I'll talk about it, our intelligent operating model in a region. So we are building on top of these capabilities. And we are showing leverage in the 10 most mature markets, we see higher growth revenue per head, gross profit per head with lowering go-to-market OpEx. And you can see that the self-service order mix and the revenue for customer orders are increasing. And we are not only drawing this leverage for us. We are improving cost for our customers as well. Now you heard a lot of promise. Let's show some proofs. So we're going to move into intelligence in action. The first thing is Xvantage was not a storefront or a website for customers. It's an experience for the entire ecosystem. And if you look at how we have built this experience and a personalized experience with our intelligence, it has an experience for our customers. where they come our mobile app for our vendors. For our associates internally who can actually operate on that. For integration, it can connect with CPQ CRMs of our customers [indiscernible] with like Salesforce. It can even experience for our end customers. So it creates a completely integrated experience through the platform. Those bring in those signals. Now if you look at the automation and intelligence-led efficiency, -- you heard about ETO, e-mail to order, our patented technology, taking friction out for our customers. It helps us to really make us more efficient. And we are actually driving efficiencies not for us only, even for our customers. Some of the code to order times have improved from days to minutes. And Mike will talk about it more in the OpEx that every handoff we remove takes out cost for us and our customers. Just look at more detail into this proactive selling mode, which is actionable insights. Paul talked about IDA. When you look at IDA, today, we are looking at algorithms, codes, not only increasing the funnel but prioritizing with our models to figure out which has the highest propensity to close, where it can actually have better conversion rate. Our associates come today, they already get a prioritized list. They can prioritize by outcome. They can even look at high-margin opportunities. This is where we are changing to margin. They can look at preparing themselves through an intelligence exposed by our agents that we have built called sales briefing agent. When they give feedback, we can capture further actions. And they can even do a research for a customer that saves them a lot of time to prep for that. This is helping us to change completely from a reactive way to a proactive way of selling, bringing intelligence straight into the sales cycle. [Presentation]

Now we are bringing the same insights and visibility to our vendors. Our vendors today can log into the same platform, get performance signals help dashboard. They can even get their customer demand signals. They can even look at their code pipeline along with conversion propensity in the same platform that is sharing the intelligence today. Distribution was never known to give this real-time intelligence visibility to our vendors. And now we are combining this to bring in drive actions, what I'll show. Working capital, ROWC. We are using intelligence today in the same process to intelligently buy. Our associates can do intelligent-driven de-analysis. They can look at how they can optimize a buy-in from the vendors. They can use the intelligence to chat with our agent and really figure out how do we improve our DIO. So I'm giving you areas where we're using intelligence to run our business. Imagine, data helps you run your business, intelligence helps you grow your business. If you look at another important component, -- we talked about B2C in B2B. It's not easy. Some of us -- it's NFL season. Watch a game on Sunday, order your food on mobile, come back on Monday and make a phone call. How can we make Sunday to Monday a fun day? And how do we create a B2C experience on a B2B? Let me give you an example of how we are using intelligence to create a B2C experience on B2B. A single pane of glass with hardware, software subscription services completely personalized for every personal. The widgets are customized. Every action you take, the platform is learning. It can be for any subscription cloud, it can help you do intelligent search, understanding where you search before based on your persona. It can give you cross-selling recommendations right at that point based on your history. Look at this. It can automatically attach a warranty. Understanding the signal that there is a cross-selling opportunity right there. You can do software pairings. What really goes. In this case, you see that. A unified card, Imagine a single card, which has hardware, software, subscriptions, services, not different marketplaces, not different platforms. A single card that shows all of that in a single platform, taking complexity out. And when the order is done, you can actually go to the same platform and it can do real-time order status tracking, understanding where your actually delivery is and track that from here. Our customers are spending more time in the platform. We are creating a different B2C experience in B2B. And this experience, now we're extending to mobile. Imagine a notification of a deal that you have. You want to optimize inventory, you push it through mobile so that your customers can get a real-time notification. You want -- we have a high propensity code for a small MSP, you can push it through a mobile app or you can actually do a one-click ordering to do that. We see customers using the phone to -- not only check pricing, but transacting to the phone right now. Subscriptions, a complicated challenge in the industry. Consumption models change. Renewals, opportunities. Imagine you get a renewal signal 1 year before renewal happens. How do you understand that? How do you drive recommendations on subscriptions? How do you take complexity out about the entire subscription life cycle and manage subscriptions? How do you have facilitated a one-click auto renew? These are complicated problems to solve in the same platform that you actually had and was selling hardware. You heard about Enable AI. Today, the experience that we have, we learned by doing AI. We are sharing it with our customers. They can come to the same platform. They can do a custom skill builder. They can take a readiness assessment to understand where they are in the journey. Really customized for them. Personalized evaluations in the platform for them to understand. Then we give a maturity scorecard which reads them. And ultimately, we create a tailored action plan for our customers in the platform that can help them go through that AI journey. Because AI is a journey, not a destination. Now I'm going to move to one another thing, which is integration. We need to integrate intelligence together. You heard about MCP. This is where Xvantage goes beyond Xvantage to connect with our customers. Customers don't have to come to us. We share our intelligence, our context and our history shared with them for a benefit of them. Let's hear from one customer how they're leveraging MCP. [Presentation]

These integrations bring us signals and to get context. And we are not only stopping that. We are actually now integrating this with any AI frontier assistance. If you look at this, the platform is connected via these customers. Imagine a small MSP who may not have that IT budget to invest in AI. They can quickly use their own frontier assistance and work with our platform from a catalog getting in seconds to get a recommendation to even get a push model solution that we can do together. This is where we are combining intelligence not only with our vendors, but also with our customers. So all of this experience that we are bringing in has a very interesting dynamic. If you look at the actions, the insights, the buying, the B2C design, intelligence anywhere, mobile, go-to-market assistance, it actually tells us something. Through all these experiences, we are not only bringing in transactions. We are gaining the intelligence that is making the next one smarter. That's our new operating model. Because every transaction creates a context and every intelligence-driven action that we have is actually driving a better outcome because intelligence is connecting that signal to the context to drive an outcome. So this is actually our new operating model. Today, we are really moving towards an intelligent operating model where a platform connects the participants, brings in their automates, digitizes, but an intelligence drives action, drives reach, drives push where you need to do today because the ecosystem has become so much more complex, and you need renewal signals, buying single recommendations. Paul talked about platform operating model. We started the journey by standardizing and cost efficiencies throughout the globe. But without that, we could not have built the intelligent operating model. The products -- initially be more products that require scale. Platform connected the participants, brought in the transactions, give us the foundation for the intelligence. Today, we have the foundation now for an intelligent operating system to operate. And let me give you a couple of examples of how we are doing this. Our sales pipeline that you saw sales briefing agent, we integrate with our internal data and external data for signals. And then we prep our sales force, our sales teams with agentic intelligence to understand who to target, where to target. And with the right opportunity, you have to understand the propensity. So you're moving from an -- being an order taker to really being an order maker, from reactive to being proactive. Now this approach, we can scale the intelligence with humans and can also scale with agents. If you look at this today, our agentic outreach. The signals we identify are opportunities, upsell cross-sell opportunities, high propensity codes, renewals. These are all opportunities. You do not get -- these are invisible. You have to go and find them by attaching all the data. Now the agent identifies an opportunity, how do we push? You saw it today, we can actually push you and a mobile app by a notification. We can do an MCP. A small customer comes to us, we are pushing, we are not waiting. We push through an MCP. And we can also be an interactive marketing to push and automate intelligence to that. This is where we are now in a phase of creating a repeatable model that operationalize intelligence. Our engine looks at opportunity, propensity, intent and then identifies prioritized action. Bill Brandel, who will come here later after lunch, will talk about how we are doing this in North America, starting to show this model. These actions can be taken when associate who understands where to reach by an agent, the port that we don't cover, how do we go, but not blindly the right customer at the right time to drive the route outcome, moving a push model. So you feed in growth strategies here and you fit in opportunities. And that's how if you balance all of them, you get your leverage. So really intelligence is more a growth and operating leverage story. You can look at revenue, margin, not only our gross margin, but your operating margin, your productivity, strong cash flow. You balance all this to the intelligence model that you have. We are turning intelligence into a compounding advantage. We did the hard work using our scale, build the platform to build the integrations and infrastructure. And today, we have created a new growth flywheel. If you look at this, this is the model. The signals when the customers come to us with the experience, they give signals where you have invisible demand, demand generation, that's where our vendors want. That's where long tail wants. We can attach the entire ecosystem. Now match that with our context for so many years of operating then use our models and intelligence to reason, understand the action and drive outcome and keep on this loop. This flywheel fuels a new growth engine on the foundation that we have built on the technology mode and the operating experience that we have built. And this converts intelligence into commercial outcomes, a different model. If you look at this entire flywheel, this is the core flywheel. But you saw before, this has helped us to become a broader ecosystem flywheel. Through these intelligent and actions, we create a better experience. We're bringing more vendors. Take the complexity out because complexity is the biggest constraint for growth. We bring in more solutions because the industry is not about pushing one solution, it's bundling solutioning together. How do you do that without the intelligence and the solution. You attract more customers. Then you can price promotion, merchandise. Then you can bring in the ecosystem partners. We'll talk about this later. This entire ecosystem, somebody had to solve it, who is agnostic. A vendor who focuses on products cannot solve it because they focus on products. Hyperscalers focus on cloud, but we focus on the ecosystem. That is why we are the intelligent operating system of this global take ecosystem. Xvantage has evolved from being a digital platform to an intelligent operating system of this entire ecosystem because this is a problem, somebody had to solve it. Like you saw from Paul's presentation before, this foundation helps us to create a pivoting business model. We have the operating system, which is bringing signals, bringing in the integrations and the network we have, we can build supply chain, finance, marketing ITAD. We can add this foundation and keep on expanding from distribution because these are B2B problems. The technology and the operationalization that we are building solves for B2B. So we are moving from distribution, to tech, to B2B. So in this journey, you heard Paul saying, we have reduced OpEx, and Mike will give more details about it. We have increased revenue. But today, we are now in a phase where through intelligence, we are really getting into margin optimization. We're optimizing margin and showing the leverage. It's a $5 trillion technology market where intelligence is improving and expand the value of every transaction. And as I told before, this problem had to be solved. I know a start-up that is solving this problem, a $57 billion startup with a $5 trillion opportunity. That's us. Because on the pace of this foundation, we can bring in other B2B opportunities through this flywheel because today, we have built the foundation. Distribution moved products. It's really good at it. Platform digitized and connected participants, but that created signals. And if you add to our context, today, we optimize outcomes with our intelligent model that we have. For decades, we moved products. Today, we move intelligence. We just don't move products to the value chain. We move intelligence to the value chain. And maybe we are creating a different value chain because this intelligence model that we are building is driving action to outcome and really building the growth and leverage. And Mike will talk more about it with the intelligence bridge that is changing our economics. So we are changing from a transaction business to a compounding intelligence platform, a different company. Scale is our advantage. Intelligence is a multiplayer. Thank you. We'll take Q&A right now.

We're now taking some questions. So this comes in from our live audience. So Sanjib, can you provide more details on how the Xvantage platform helps vendors, OEMs, customers, basically the entire supply chain, help navigate the current dynamic supply and demand environment, including rising ASPs and component shortages? How does this translate into deeper customer relationships and revenue growth?

Yes. Great question.

That's a lot there.

Yes, it's a lot there. If you go back to the segment of vendors that we showed and the segment of customers, if you look at the larger vendors, they actually work with us to do most of the products to the market. And a lot of them is vendor-led, and we generate demand in some scenarios. So we play in the role where we fulfill, we take the products, we do it efficiently and we really give them the opportunity of the channel that they want. But those vendors today are looking for unmatched demand of the signals. If you look at any large vendor today, the #1 thing they will ask is how can you match our pricing, what do we have, and get us access to the net new SMB in the long tail. That's the opportunity that they have. And what they want is really a level of segmentation that they don't play generally, and that's not their core competence, but that's where they want to go. So today, we do a great job in working with the enterprise. So if you look at the platform, the platform has 2 motions. With our transaction automation with our vendors, we do it. Efficiently take their products in the big customers enterprise and the upper mid-market area. But if you look at what the platform gets today with combining intelligence, imagine their pricing data, their signal data and you combine their intelligence with our intelligence, we can get understanding of units, ASPs and signals and then we can really use our agentic intelligence to actually push it to the long tail and drive value. That's what the vendors won. Most importantly, the vendors can also come into their platform and can get visibility, as you showed today. They can get visibility. They can get customer demand signals. They can also get understanding their propensity for codes and performance, which gives them an understanding of their markets even more better.

Great. And how hard would it be for competition to replicate what we're doing with Xvantage?

So we are not solving a distribution problem only. We are solving an ecosystem problem. And if you look at our differentiator, we have the foundation, I showed the journey today, right? It's not about an AI model or it's not about building a platform. Our goal is not to only build the best platform. We want to build the intelligent operating layer for the ecosystem, which requires the operating context, which records a technology foundation, which records the -- aggregating the data, which takes a lot of effort, which requires your journey mapping, which also requires your foundation of the systems that they talk to each other. That's a lot of complication to build. Now I cannot comment where competition will catch up. I have due respect for them. But what I can tell you is that this operating context, with the history of operation we have, with the data that we have aggregated. Over the last few years, the experience that we created to get the signals and then to build an agentic foundation, it's hard to copy.

How will Xvantage help drive enable AI and expansion of AI as a whole?

There are 2 ways. If you look at the AI motion that I explained today, it is different in different segments of our customers. A lot of us think AI, we get confused by the AI models or what AI is doing. If you can understand that -- somebody, a customer asked me a question about AI. I said without data and the infrastructure, your enterprise AI will not work. So if you segment your customers into how AI will work, the enterprise generally, are doing mostly fulfillment. That's where you see the GPUs, how they're coming up right now. So our role is we are really helping it working, participating and participating in that GPU fulfillment. Where there is an opportunity is mid-market and long tail. In the mid-market, you see more outcome-based. AI has about 6 or 7 layers, right? We talk about the hardware layer, but there is an application layer, networking layer, model layer, multiple layers. How do you bundle the solutions together to drive the right outcome? And how do you partner with the hyperscalers together or vendors? So this whole multi-solution approach is important. So there is a mid-market component to that. In the SMB, I think we need to give guidance. So that requires a push model. That is why we are talking about in our platform today, it requires intelligent bundling. We showed about a bundling of solutions. And then we really have to reach out to the SMBs through the intelligence or the push model to take them in the journey because they are looking for guidance. So we sometimes look at AI as a reselling AI capacity. But if you break the AI journey into multiple phases, every segment of customers is different for a reason, and that's how we intend to partner with them.

Okay. We have time for just one more. We're going a little bit long. Can you talk a little bit about the patents and what -- how they provide a proprietary advantage?

Absolutely. So if you look at our technology journey that our teams have taken, we have written our proprietary code -- use of 42 million lines of code. But the code was structured in a way that is agnostic to data from ERPs to the engines and the experience. These patents are problems that are -- B2B, for example, dynamic SKU. How can we have a SKU not overloading our ERP? Creating a B2C design in B2B. An agnostic framework where save time for integration with vendors. As you know, integrations take a long time. Using our intelligence and framework, how we can integrated much more faster. You saw it today, a sales force integration happening in minutes. So these are some of the patents that we have done, 8 of them approved, which is actually solving B2B problems, not just distribution problems. And Willa, as I said before, we are solving an ecosystem problem. These patterns position us to solve that and be a different company. I hope you all got that today from our discussions.

Great. Thanks, Sanjib. At this point in time, for the virtual audience, we'll be breaking for lunch, and we'll be returning at 12:45 Central Time.

Thank you. [Break]

Broadcasting. Thank you for joining us back. As Paul mentioned this morning, we are providing intelligence at scale, and he outlined our strategy and what Ingram Micro is doing to fuel growth for our customers and our vendor partners. And Sanjib really brought it to life. And you got to see how the platform works, how our intelligence works. And now we actually have 4 customers here representing each of our 4 regions, and we're going to talk a little bit about what their businesses are about, how they're partnering with Ingram Micro and what we're all doing to drive growth together. So with that, Greg, I'm going to start with you, and maybe you could give us a sense of Pellera and who you are at Pellera and your role? And maybe also who your customers are that you're working with?

Sure. Well, first of all, thank you to the Ingram team for having us today. We appreciate it. For those who don't know me, my name is Greg Berard, CEO of Pellera Technologies. Pellera is a North American-based solution provider that really focuses on 4 key areas: data center technologies, application modernization in cloud, cybersecurity and then data and AI. We're $5 billion in revenue. We have over 3,000 employees. And we really focus on what we believe to be unique in the marketplace around our aim philosophy around all those strategic practice areas. So our ability to help our customers, advise them on the solutions they need, implement those technologies and then wrap managed services around all of them as well. From a customer perspective, we've been very acquisitive. So we've acquired companies in every region across North America. So we're really industry-agnostic. But we do, do business with the largest financial services, largest health care customers, automotive and public sector would be the 4 largest industries.

Okay. And what are you seeing that's different about the business you're doing today?

Sure. So the biggest thing, as we all know, is the AI trends in the marketplace, right? So we've really started to see a shift towards, let's stop talking about AI and let's start implementing technology. So we've helped our customers build very large high-performance compute clusters. We've seen them really put more focus on understanding the governance, understanding the compliance, how do they make sure their environment is secure to roll out the AI technology. So we've really seen a big shift towards let me understand what the use cases are, but now we're starting to implement real-life AI use cases. And that's been a nice shift over the last, I'll call it, 12 to 24 months.

Yes. Great. So you mentioned $5 billion, so not a small company, fast growth. How is Ingram Micro partnering with you and helping you with that growth?

Yes. Ingram Micro has been a very, very strategic partner of ours since 2017. So they've really been along the growth journey with us, helping us continue to build and explore and expand the business across the board. When I think about the relationships -- in this business, everything is about relationships. Ingram Micro helps us not only with their relationships and their executive team, but also the relationships we need to have with our strategic partnerships. So understanding who the OEMs are out there that we should have relationships with and then brokering those deep relationships. The other piece is around supply chain management. We don't know that continues to be a challenge, and Ingram does a great job helping us understand what's available. We don't do a lot in the inventory side, so you guys have been a great partner to help us manage inventory and make sure things are ready when our customers need them. And then the last piece is around financial opportunities, right, helping us be creative, whether it's around acquisitions, whether it's around buying patterns of our customers or nowadays with the high-performance compute cluster transactions, we're doing deals that are hundreds of millions of dollars and having a partner like Ingram that can help support that is very important for us.

That's fantastic. Thank you. So Irvin, GBN is a different company than Pellera. Can you talk to us a little bit about GBN and what you specialize in?

Yes. Thank you for inviting us, Ingram. It's a pleasure to be here. So we are a partner in Mexico and LatAm that offer mainly collaboration like contact center. We do cybersecurity, also networking data center and wireless solution, and our main brand is Cisco.

Fantastic. So who are your target customers that you're supporting?

Our target customers include organizations in retail, manufacturing, hospitality and finance sector. And the key differentiator between us and our competitors is that we speak the language of the business. We don't talk about bits and bites, hardware, software. We talk about sales growth, operational efficiency and maximize revenue of our customers.

And that is a really key trend. That's been happening over the last maybe 5 to 7 years that you're no longer talking to the IT suite. You're talking to the line of business leaders.

Yes. Ingram Micro help us by providing a single platform provision and review all plans through this integration or Cisco deals and discount flow directly immediately into Xvantage is amazing tool, allowing us to respond much faster to our customers.

Fantastic. Okay. So Gordon, let's switch over to you. Paul mentioned earlier about how customers are also acting as vendors. And I think Viadex is a really good example of that.

Yes. Yes. So I'm Gordon Scobie, VP of Technology at Viadex. And as Jen mentioned, our business is split into 2 different areas, one is around logistics and the other is around managed services. But we've also been able to create 2 new cloud practices with AWS, GCP and actually OCI using Ingram, which we couldn't have done before. So one of the unique areas that the Viadex can provide us, we can deploy any form of hardware, any country in the world, looking after import export of vehicles complete in all local in-country administrative tasks. And this is one of our major super powers at Viadex.

Fantastic. And what is Ingram Micro doing to partner with Viadex and how are we helping you?

Yes. So there's a few areas. One of the main areas is around Viadex uses Ingram to distribute for our global dispersed customers. So one of the things at Viadex is we only deal usually with customers who operate in more than one country. How we leverage that is through your sales at Ingram, which helps us to scale across all these different countries. The other is around an AWS and GCP practice. So 14 months ago, we went on a journey to set up the AWS practice. And by using Ingram, we have basically escalated that process from being a partner within the first 14 months. The way we've built it usually take 3 years, but we've managed to condense a certainly 14-month because effectively, the Ingram-AWS teams is an extension of my teams. So it's great for us to scale. And also in terms of the GCP side, what's happened with GCP, we are already providing the managed services from an AWS point of view. So some of our customers also use GCP. So within the last 3 weeks, we have managed to create a GCP practice within a week, which we couldn't do without Ingram. So that's -- it's been huge for Viadex to be able to lean on that specialty that Ingram has. And the final area that -- where Ingram is bringing value. So we have created an AI SaaS solution that focuses on migrations from data centers and AWS. So based on AWS Bedrock, we have worked in collaboration with Ingram's AWS team to effectively create this SaaS solution, which can condense a [ mig ] assess or a migration assessment from 6 weeks to roughly 6 seconds. So this is something that has been very beneficial for both Ingram and Viadex.

Okay. That speed matters in real life, right there, for sure. Thanks, Gordon. So Chuong, Fuse is an exciting company. Tell us a little bit about it and why you partner with Ingram?

Yes. So Fuse, we're a managed service provider based out of Australia, but we now have operations in Vancouver, London, Ho Chi Minh City. We're a little bit different to all the other guys. We're a services business and then we wrap kind of software hardware around it. And we take care of small, medium business. So what we found after COVID is every business in the world is now a global business. And there was -- we were finding that our clients would be traveling the world, wanting the same level of support in London, in North America as they would in Sydney, Australia. And so that's where we kind of grew our business. And because of the -- Ingram kind of global scale, we managed to kind of scale up very quickly globally. As a phone call to Ingram saying we're opening up in Vancouver. Within a few days, we had an account set up. Within a few days after that, we had some line of credit and we were transacting. And we've turned that kind of Canadian business into 0 to a couple of million dollars of revenue in less than 12 months. So it was great. And one of the things about Ingram as a whole is whilst they're a global business, a lot of the other distributors, kind of the regions are quite separate. Whereas with Ingram, we find it, no matter who we talk to in the world, the leadership team kind of our global leadership team, it's quite unique in the world of distributors. And that's what we found as well being an MSP. There's a lot of global MSPs, but they all operate very separately. And our clients didn't like that. They wanted to know that they picked up the phone in Australia, they get the same level of support as picking up the phone in Canada. So that's kind of made us a little bit different.

Excellent. So also, I'd call you a power user of Xvantage. Can you talk a little bit about the benefits that you...

Yes, yes. Look, we kind of went all in with integration and platforms. So one of the challenges of the small medium business is scaling quickly, finding staff. And so we -- a few years ago, we decided to go harder into selling services. Whilst we're services led, we wanted to sell more product. And one of the things Xvantage allowed us to do is grow our kind of hardware, software business by -- exponentially, basically. But because of the power of automation, because of the integrations into the platform, we're able to do that without adding staff, which has just been [ phenomenal ] for us. Hardware transactions, API integrations into MCP. I used an example this morning. We had a client who placed an order with Dell a few months ago. No ETA. Next thing you know, they're like we can't find any RAM sticks. I literally cut and paste the config into our AI chat tool, which had MCP integration into Xvantage. And within 30 seconds, he came back and said, here's the option from the other vendor, here's 3 options. This is what's in stock. This is not what's in stock, and it came back with standard by price. All -- like in the past, you would have had to have gone back to Ingram, they would have had to have gone to the vendor, worked out the config, all of those things, like the power of it is phenomenal now. So just like I find that those things give my team superhuman powers. It makes us able to compete with the big boys. Where in the past, it would have mean hard -- it would mean literally me on my own trying to figure it out. Now I've got some AI tools that help me. So yes, that's been great, and the manual processes that we've been able to replace with automation is just phenomenal.

That's great. Superhuman powers, that's intelligence and action right there living. And you guys are managing a lot of seats?

Yes. So we're in SMB. We manage about 5,500 seats. So you can imagine in small business as low as staff churn, just being able to turn on and off licenses through automation every month, the billing reconciliation for that. Some companies will churn 20% to 30% of their staff every year. And that means turning on licenses, turning off-licenses, onboarding, offboarding. So we've built the integrations that allow us to do all of that work. But even better, it means that on the 1st of the month, I press a button, and we do our bill run. And we capture all the ads move changes because cash flow is the biggest challenge of the small business. And so when you get the billing wrong, it means the clients don't pay their bills on time, which then has a knock-on effect. So the more you can do to automate that process, the better.

Absolutely. And time is money too, especially with the services business. So Gordon, Viadex is also working with us with -- through Xvantage. Can you talk a little bit about what you guys are seeing?

Yes. So very similar use case to yourself with regards to -- especially from the logistics point of view, where we are looking at different hardware, different pricing. We have also adopted the MCP side as well, which allows the sellers to get quotes spreads out much, much faster than what they had done before. One of the other areas is around provisioning AWS and GCP accounts. As I mentioned earlier on, it took us a week to set a practice from scratch. But by using Xvantage in terms of the new accounts and the projects, Xvantage simulates that process. You're talking 2, 3, 4 days much quicker than what you could do when you were doing it manually. The other area is on the logistics. So the logistics side of the business, they are -- heavily rely on Xvantage, which goes back to the same point around where we can now automate a lot of the pricing coming back to the MCP servers.

Yes. And what we were talking about earlier, too, is you're able to put everything on to the same invoices, the same quotes, same orders, right, which is...

There's also another area that we're working with Xvantage on just now, which is beneficial, is around the 24/7 AWS support. So my teams have been exploring with Ingram, how we can get that up and running instead of me setting up an AWS support team. We are leveraging Ingram for that through Xvantage.

Great. That's outstanding. So Irvin, with GBN, you really see us as a business partner of yours. Could you tell us more about that and how that works?

Yes, of course. We treat Ingram Micro as extension of our business for resources and expertise. We use training and certification for our consultant team. And we also work with Ingram in presales support for complex design for integrations. And so we use the financial options for Ingram for -- to try to get bigger projects for our customers. And we also do a proof of concept when the projects are really difficult. And we also support Ingram Micro as a service provider to extend their business and support other SMB customers in this calendar Cisco solutions.

Okay. So GBN is also a customer, also serving as a vendor with us.

Exactly. We're working in that a couple of years.

Fantastic. So Chuong, you mentioned that Ingram is partnering with you on intelligence. And you're doing some pretty interesting things with that. Can you give us some more color?

Yes. Look, we -- I talked about the integration of the MCP platforms. But what we're finding is that in the past, as an MSP, you buy a lot of stuff off the shelf. And you'd use maybe 10% or 20% of those features. What we're finding now is our clients want -- they want to see the value of what we do. So traditionally, we used to fixed computers. We used to go out on site, plug things in, get them working again. That world is kind of changing. Now what they don't see is the 10,000 tickets of security that we do a month. And so what we've had to do is build platforms that show our clients value in a different way. And the great thing about working with Ingram and their platforms is that we now can build a client dashboard that shows our clients all of their licensing spend, all of the work that we do with them from a ticketing perspective, all the security that we stop. But also, they can see the back orders. They can see the laptops that they have in their fleet that are out of warranty and then we can kind of say to them, right, here's what it's going to cost, and this is what's in stock. And we can all service that through a platform that we've built. And I don't know -- but actually, I think everyone in this room knows that kind of from this year onwards, like the ability to write your own code and build things out at scale has moved exponentially quickly. And I basically have 2 full-time people doing AI and automation within our business. And I think they're doing the work of the team of 20 in the past. And we're bringing things to market now that we could never before. And it's only with the help of partners like Ingram where we can have a single pane of glass, wherever it is in the world for our clients. And that data is super important for us.

Yes. And that's a great example of what Sanjib was talking about is intelligence coming into outcomes that you're able to deliver to your customers, which is exciting. So Greg, back to you. Can you give us a sense for the scale of Pellera, just to give us some more context about what you're managing on a day-to-day basis?

Sure. Yes. So as I mentioned earlier, we're $5 billion in revenue. We have over [ 25,000 ] employees. But from a partnership perspective, we have over 1,000 partners in our ecosystem. So on a daily basis, we're interacting with a lot of OEMs. And this is an area that we leverage Ingram for as well, right, making sure we have the right relationships and the right partnerships with each other. But each of our practice leaders is looking at this every year, right? Do we have the right partnerships in place? Are we investing in the right areas? Are we doubling down with the right strategic partners? So understanding from Ingram, what are they seeing in the marketplace? What are the emerging trends that they're looking at? Where are they making investments? So our ability to leverage you guys for that is important to our business so that we can make sure we're doubling down and investing in the right strategic areas. As I look back 3 years ago, I wouldn't have been up here talking about NVIDIA, I wouldn't have been up here talking about Databricks, right? But now we've invested in these partnerships and we're growing our Snowflake business. We're growing our NVIDIA partnership, right? So all of those things are important. And as the market continues to evolve even faster, it's more important for us to understand what's out there and leverage you guys to help us do that.

Excellent. And how does that help -- how do our programs and services help to round out that for you?

Yes. So there's a couple of things, right? Number one, enablement and working with your thought leaders and our thought leaders to make sure that we're enabling our sellers. We're enabling our clients so they understand the technologies that are out there. We touched on earlier, just understanding the supply chain and the inventory. And then more and more now is really structuring deals that make sense for our clients and giving them a way to procure the technology in a way that makes sense for them, in a way that we can handle it as well. And I touched on it earlier, but we're doing large, large transactions, and we couldn't do that without Ingram, and we couldn't do it without the creativity that comes to bear as we're structuring these large transactions.

Yes. And so you've heard from many of them about our financial programs and Eric Tapia is going to talk about that a bit later on what we're doing with that. It's exciting. So what are you seeing in terms of AI? And how are you supporting your customers around it?

Yes. So there's a couple of areas. We talk about the Pellera AI platform, and it comes down into 3 different buckets. The first one is what we call AI factory and high-performance compute clusters. And this is where we're driving very large end-to-end compute networking and storage transactions with our customers. And these are typically hundreds of millions of dollars, and we're working with Ingram. We're working with HP, Dell, NVIDIA, VAST, all of the major compute and storage platforms that are out there. And we're helping our customers understand their use cases from a data perspective and then making sure they have enough compute power, making sure they not have enough bandwidth from a networking perspective and then the storage capacity to handle these. These are large financial services use cases, large health care use cases, working with customers to drive cancer research and other things. So really just taking the business to the next level from an infrastructure perspective. The second piece is around AI as a feature, right? Every OEM out there is building newer and newer capabilities on a monthly and quarterly basis. So how do we make sure our customers understand what they own today and how can they leverage that to drive the business outcomes they have. And then the third leg of the stool that we talk about is AI as a solution, right? And this is where we're doing design thinking workshops with our customers to understand what's most important to their business, what's going to give them the best ROI. And then we're working with them to build a road map, helping them build the technology, helping them implement the solutions and then manage it over time. So if we can continue to work together and drive those 3 pieces, that's going to help. Our customers see more value from AI technologies and help us all continue to drive value would be a growth lever in our business.

That's great. I mean you guys are being a consultant with your AIM approach and with design thinking and all of that in addition to a technology expert. So that's tough to manage both. So Gordon, you guys also have some unique AI offerings. Can you touch upon those?

Yes. So based on some of the use cases we've had with our customers over the last over 12 months. We created a service called Altiora, which basically is an AWS AI solution built on Bedrock, which effectively can take a customer who was looking to do a migration into AWS instead of taking this [ 4 to 6 ] weeks, we can now speed that whole process up to, as I said earlier on, 6 seconds. So we couldn't have done that without the feedback from Ingram because the volume that Ingram are putting through from migration assessments, we are basically looking at that process, look at our customers' process, and that's how we have managed to adopt AI technologies to condense that whole period to save resources, efficiency, accuracy all within one solution. So that's running already within AWS through the marketplace and AWS have signed us off as one of their map assessment tools of choice, which is a good position to be in. And then the other market where we created AI solution is around -- we have a SaaS solution that's called [ Turbo 360 ], which effectively is a cloud management platform that plugs into AWS, Azure, GCP, Databricks and Kubernetes. But one of the features that we were getting feedback from our customers was they're adopting AI all the time, but they don't know what they're consuming and what that cost us. So effectively, we have built plug-ins to Anthropic, OpenAI, Gemini, and we've included it as part of [ Turbo 360 ], so we can monetize an individual cost to track an individual user's consumption of tokenization, and that's across all the different LLMs. So not only do you get your hyperscaler cost, you also get your LLM costs as well, which is...

That's really good.

A year ago, you probably couldn't have done that.

Yes. And when earlier, Sanjib mentioned collaborating intelligence, I think that was an excellent example of how we're doing that together as well as that route to market through hyperscalers. We're making it possible for those SMBs to get those services, and we're working together on that. Yes. Excellent. So Irvin, with GBN, you guys have a specialty business that you mentioned. Can you -- what are you doing with AI? And can you talk a little bit about that?

Yes, of course. Most of our projects is about contact center include AI solutions. AI agents and AI solution for humans that help to manage better the conversation with their customers. We have customers in different verticals like -- sorry, like hospitality. You can make a reservation without talking with a human and with informal language, taking advance about all the information they have, like room types, destinations, prices, restaurants, et cetera. And last year, we were in Cisco Partner Summit and we received an award to be the best collaboration partner in Mexico above mid-market clients.

That's great. And you guys have built this specialty over a number of years.

I think we have a special team making only contact center, about another team doing the rest of technology.

That's exciting. So Tong, back to you. How are you integrating AI into the services that you're providing?

Yes. Look, I think this was a big challenge for everyone in managed services over the last few years. It's like how do we monetize AI. And what we've realized is a lot of our clients were building great little tools, little time savers within their business, but they were building it on OpenAI, Claude, they are hosting it on Lovable. And I think we got an example of one of the tools one of our clients built one day and my CTO is like, we're not logging into this application, and it's on the Internet. So basically, anyone can use it. And like what do you mean? We're like, well, I'm on my laptop right now, and I can access your information without any authentication at all. So from that, we launched what we call [ Fabric 365 AI ]. So it's hosted on Azure. We spin it up within Ingram's Xvantage platform. We build it securely for our clients. We put all of their tools in there. And Microsoft had their foundry product, which is great for kind of mid-market and enterprise. There was nothing new in that kind of SMB space. So what we basically said to our clients is we're going to build you a tool set, the data is yours. So a lot of people had staff building AI platforms and no source code. So we went, right, let's build this properly. So we built a managed service product around that. And then basically, it allows most of our clients who are building tools for five staff or less to do it themselves. And then anything bigger than that, that's when our team step in. We've got our own development team in Vietnam. So one of the big challenges now is once you get to a certain size, you have to kind of build some scale around your software dev, but then finding people is hard. So Vietnam is a great place for us to invest in. And so now that's allowing our clients to kind of build out platforms, get them to a certain size and then say to us, can you take it to the next step, please? And that's where we step in. And then we build a managed service around that to maintain it and manage it for our clients, all hosted within Microsoft Azure with the help of Ingram. That's kind of -- it's been a very little kind of starting point for us. And just having the Ingram team understand what we're trying to build talk to people at Microsoft on our behalf, get us out in front of the right people, give us kind of upskilling where we didn't have those skills in the past. That's where partnerships work for us.

Fantastic. Well, hopefully, what you all have been able to see is some of the complexity that Paul talked about earlier with -- there's at least six different products going on a quote and an order. You heard that today. Cybersecurity is also a really important part of the mix, especially with AI and financing and the resources and the extension. So we really appreciate your time today, gentlemen. Thank you for being here. And really thank you for your commitment and your partnership with Ingram Micro, from Australia, to Mexico, to U.K. and here in the States. Thanks for joining us, and we really appreciate it.

Thank you. All right.

All right. We're going to -- thanks, guys. We're going to do a quick switch here and ask that our regional presidents come up here and join me on stage, literally in the hot seat as these lights are getting in -- all right, energy. Okay. So we're going to switch gears here, and we're -- you got to hear a little bit from our customers and with their point of view. And really, we did this on purpose to give context to what is a day in a life that they have like? What are they dealing with? What are some of the things they're solving for, how do their businesses need to operate and so forth. So now we're going to talk a little bit about behind the scenes and the work that Ingram Micro is doing to do that. So to start off, we're going to hit what we're doing with the platform. Sanjib, of course, talked a lot about our intelligent operating system. He called you out, Bill, and said, Bill is going to talk later about what's happening in North America because it is one of our more sophisticated regions in terms of really adopting and using that. So Bill us how are your teams working differently now than a year ago?