Ingram Micro, the world’s largest IT distributor, announced today it has acquired The Phoenix Group, a U.S.-based specialty distributor of point-of-sale (POS) technology for the North American electronic payments market. 

Ingram’s acquisition of The Phoenix Group serves as an example of large, established IT players snapping up firms dealing in high-demand, emerging service technologies. The deal beefs up Ingram’s existing POS and payment technology capabilities with value-added POS deployment services and The Phoenix Group’s deep horizontal expertise in the fast-growing, high-value electronic payments space.

The acquisition also opens up new opportunities for partners looking to establish vertical expertise. The Phoenix Group has earned all major network, PCI, and P2PE certifications, according to a statement issued by Ingram Micro today. Ingram will operate The Phoenix Group as an extension of its Advanced Solutions division.

“The Phoenix Group’s capabilities also provide our partners with immediate access to the payment processing keys necessary for electronic payments, a capability unmatched in the channel; the ability to maintain and upgrade those devices; and access to next-level POS technology,” said Jeff Yelton, vice president and general manager of Advanced Solutions at Ingram Micro.

Historically, disties have operated on narrow profit margins, which has limited their ability to invest in their own technology architectures and emerging technology expansion efforts. As demand for cloud, mobile, and microservices continues to grow, disties are looking toward acquisitions to help them diversify and innovate at a greater rate.

Ingram Micro: Microcosm of the Channel

The broadline distribution space is in the midst of a sea change, and many channel experts and analysts view Ingram, with its many channel chokepoints, as a microcosm of the channel itself. When China-based HNA Group acquired Ingram in December of last year in a $6 billion buyout, we wrote about how the acquisition gave Ingram a much-needed influx of resources to create a more global and nimble service offering portfolio, as well as focus on adopting emerging technology and providing associated education and enablement for partners.

As the race for market dominance in third platform technologies heats up, the channel is seeing an increase in M&A activity, including in distribution. Tech Data’s acquisition of Avnet’s Technology Services Group last year is another example; the deal allowed Tech Data to expand past its traditional broadline distribution practice into the lucrative value-added services market.

Like the rest of the IT channel, distribution’s role is evolving from hardware-based revenue to services. As end customers come to rely on VARs, MSPs, digital agencies, and IT consultancies to equip and support business strategies, these partners in turn rely on disties for the education, enablement, and end-to-end solutions their clients demand.