Ingram Micro Inc.
) adds to its portfolio every now and then. After announcing a
bunch of cloud offerings last week, the information technology (IT)
distributor has now expanded its range of digital signage offerings
through a new distributor agreement with multi-media software
solutions provider Scala Inc. Financial terms of the deal were not
Pennsylvania-based Scala's software suites are broadly used in
digital signage, interactive video, TV, presentations, streaming TV
into large LAN and WAN, and other communications media. Its digital
signage solutions are used by big shots such as
), Warner Bros., Royal Dutch Shell (RDS), Esso, Ericsson and
Per the agreement, Ingram will deal in Scala's entire range of
digital signage and display solutions. The IT solutions provider
will market and provide technical support to Scala's products like
Scala Designer, Scala Content Manager and Scala Quick Start.
The need for digital signage is increasing across the world. It
is one of the cheapest ways of delivering content or messages
electronically via different media. Digital signage solutions
generate recurring revenue streams, which actually lure
distributors to win the dealership. Research firm IHS ISuppli has
projected a growth of 12.6% in the signage and professional
displays market this year. Moreover, the firm predicts worldwide
shipment of roughly 17.3 million units in 2012, up from 15.4
million units and 13.5 million units in 2011 and 2010,
The tie-up with Ingram will open opportunities for Scala in the
U.S. market. Also, Ingram will be able to witness continued revenue
streams through the growing demand for digital signage
Ingram is one of the biggest players in the IT distribution
business. The company's geographical diversity makes it a logical
choice for manufacturers seeking to increase their international
exposure. The channel partners also get exposure to various
technology providers' offerings under one roof. Moreover, Ingram's
continuous product enhancement and partner addition activities will
keep it ahead of peers such as
Arrow Electronics Inc.
Tech Data Corp.
We find Ingram Micro's first quarter results impressive as the
bottom line was well ahead of the Zacks Consensus Estimate. The
company has provided a positive but cautious second quarter
guidance. But we believe that support from its Australian venture
and the improving IT spending trend will help Ingram post better
results going forward.
We remain fairly optimistic about Ingram Micro's strategic
relationship with network giant
Juniper Networks Inc.
), as well as tech giants such as
The company's growing SMB exposure and improving profitability
is encouraging, but its significant European exposure and debt
burden are concerns.
Currently, Ingram Micro has a Zacks #3 Rank, implying a
short-term Hold rating.
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