Tech distributors Redington, Ingram ride the boom in AI
Bengaluru, Nov. 10 -- Technology distributors Redington Ltd and Ingram Micro Holding Corp., best known for supplying iPhones and laptops to retailers and businesses, are emerging as beneficiaries of India's artificial intelligence (AI) and data centre boom. Demand for AI servers, chips and other data centre infrastructure is driving growth for both firms, offering a new avenue for expansion.
While selling AI compute accounts for about a fifth of their revenue, it is among the fastest-growing segments for both firms. The firms get three-fifths of their business from phone and laptop supply to retailers and businesses. At Chennai-based Redington, world's eighth-largest technology distributor, management expects its technology solutions group (TSG) business to be its fastest-growing driver. This is despite the firm getting almost a third of its business from reselling Apple phones and handling almost half of its offline distribution. "So second half, we continue to see TSG being a very strong number one in terms of growth driver, followed by SSG (software solutions group)," said V.S. Hariharan, chief executive of Redington, during the post-earnings call on 4 November. "So the value segments will be good for the second half. Typically, they've always been strong in the second half and the CPU-GPU migration as well as the SSG work will drive that." The TSG arm sells networking, servers, storage, power and collaboration equipment to clients. This makes up a little less than a fifth of the company's revenue. On the other hand, the software solutions arm comprises cloud, software licensing, professional services and cybersecurity solutions.
This division also makes up less than a fifth. Together, both arms make up a third of the company's business. Redington ended the second quarter with Rs.430 billion ($4.5 billion), up 23% sequentially. This makes it a tad bigger than HCL Technologies, India's third-largest tech services firm. In the first half of the fiscal alone, its software and technology solutions business jumped 71% and 45%, respectively, compared to the company's overall growth of 41%....
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