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Ingram Micro (IM) Expands Distribution Deal with Dropbox

Ingram Micro Inc. IM recently announced that it has expanded its distribution agreement with Dropbox Inc. The financial details of the deal have been kept under wraps.

What is Dropbox?

Dropbox is a file backup service that offers cloud-based file management, storage systems and client software. It enables users to access and synchronize files and use applications through multiple devices. Users can create a special folder on their computers, which can be synchronized for viewing on any computer. Files placed in this folder are also accessible through websites and mobile phone applications.

The Agreement

Per the expanded agreement, Ingram Micro will be able to market and sell Dropbox file sharing and collaboration services in countries like Europe, Australia and New Zealand. Earlier, the company was only authorized to market and sell the products in the U.S and Canada.

In addition to this, users of Ingram Micro’s Cloud Marketplace can avail required Dropboxservices in the U.S., Canada and the Netherlands. First launched in North America, the Cloud Marketplace was quite well received, which prompted the company to launch it globally. The integration of Dropbox into Ingram Micro is aimed to make it easier for people and organizations to work with files on the go.

According to the Vice President of Ingram Micro, Renee Bergeron, "We believe Dropbox is one of the most widely adopted collaboration platforms on the market, with unique business-focused capabilities that we expect will deliver significant value to our cloud portfolio and global partner community."

On the other hand, leveraging Ingram Micro’s distribution channels, Dropbox will be able to market its products easily and expand in newer markets as well. As quoted by Hank Humphreys, Channel Chief at Dropbox, “By working together, we can help channel partners deliver an affordable offering that allows companies to speed up collaboration and increase productivity."

Last Words

Ingram Micro has been signing distribution deals with a number of original equipment manufacturers, thus expanding its product portfolio. The company’s exposure to the cloud computing segment is also expected to act as a significant growth driver.

Additionally, management’s focus on high-margin markets and strategic acquisitions to grow market share should help.

Separately, Ingram Micro has been gaining from increased orders from small & medium business (SMB) organizations in Europe, particularly in Germany and the U.K. The company is now targeting the SMB segment in a more comprehensive way, not only in Europe but across all regions.

Though Ingram Micro’s high debt burden is a concern, we remain fairly optimistic about its strategic relationships with network giants such as Juniper Networks Inc. JNPR, Cisco CSCO and International Business Machines Corp. IBM.

Ingram Micro carries a Zacks Rank #3 (Hold).

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