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October 12, 1998

INGRAM MICRO AND SOFTBANK FORM ALLIANCE

By CBR Staff Writer

Ingram Micro Inc, the world’s largest wholesale distributor for IT products and services, has formed an alliance with Softbank Corp, Japan’s largest distributor of software and networking products. Ingram Micro, the Santa Ana, California-based company, and Softbank, which also owns stakes in Ziff-Davis Inc, Yahoo! Inc, E*Trade Group and Kingston Technology Co, have arranged the alliance because it will be cheaper than trying to set up a distributor network in the other company’s market themselves. Buying an entrance to the market, as Ingram did in November 1997 (CI No 3,287) with Electronic Resource Ltd of Singapore, was also considered too costly. Despite having revenues of $19.3bn, Ingram works on low margins and usually only makes one cent in the dollar. Ingram and Softbank will resell the other’s product lines; will be able to provide global customer service for resellers; and provide unified sales and support network for vendors. In 1999, Ingram expects to put into place frameworks for the assembly of products in channels inside Japan. The two are also likely to develop a joint marketing and business practices program. Softbank will also have access to Ingram’s 145,000 products, 112,000 resellers and facilities for assembly for 1,400 manufacturer distributors in 31 countries. Both companies will make a $50m equity investment in each other, in order to guarantee their commitment to the alliance.

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