Spectrum’s acquisition made in 2009 is showing potential for good returns based on Dubai’s positive trading outlook
In 2009, Ajay Singh Chauhan, CEO of Spectrum Group acquired the Middle East operations of Psion Teklogix at the peak of global recession. Trading demands into and out of Dubai as well as globally had reached rock bottom levels and Psion’s principals wanted to pull out of the region. Chauhan had cash ready, the valuation of the logistics equipment company was also correspondingly low and hence a bargain was struck. Chauhan’s Spectrum Group is now the holding company for Psilog International, Psion’s authorised distributor and service centre for 15 countries across the Middle East, North Africa and Pakistan.
With present import and export trading levels soaring out of Dubai and the local government’s initiative to pump in expansion and development funds into Dubai International and Dubai World Central Airports, Chauhan is beginning to see the possibility of high returns on his 2009 investment.
Today the training and service centres for Psilog equipment are fully operational. The typical range of equipment suitable for a trading, warehousing and logistics hub like Dubai and provided by Psilog include handheld computers and PDAs, vehicle mounted computers, accessories and other radio frequency and networking equipment. Amongst the parts of a PDA that suffer the most field damage are the screens and keypads. With Psilog’s local service centre, customers now have much shorter downtime for damaged equipment.
However Chauhan has gone one step further from the standard break-and-fix support services and is offering software technical expertise for integration of these devices at a customer site.
“We also help develop an interface between these devices and backend logistic ERP applications whether based on Microsoft SQL or Dotnet or Oracle or SAP,” says Chauhan. With such customer facing value initiatives, Chauhan is also setting the turf for the type of reseller partners he is looking for. “They are traditionally mobile device application developers specialising in RFID or wireless connectivity.”
The other portfolio criteria for future reseller partners is an existing relationship in any of the strategic customer accounts including telecos, logistics, trading and shipping companies and any others with large field force.
“We need a partner who has penetration in an account. If you are having a good relationship in an account, we will hand-hold you through out. We have technical skill sets and application knowledge to do the entire solution for you. Once you are trained and see a lot of money in it and feel it is the right sector to invest, please invest more in your own engineers and implementation. You will be able to get more margins since you will be doing it yourself.” Chauhan’s ramp up model for Psilog’s reseller partners is easily described.
The other important decision Chauhan took at the time of the 2009 acquisition was to build and grow Psilog’s operation as a separate business under an independent set of managers. “We could have had it under the Comguard umbrella but we decided to separate the businesses since it required different skill sets.”
Historically both Comguard, the security and network software distribution company, and Psilog International were added after Spectrum’s initial portfolio of training business was setup. Spectrum’s initial business was in the area of IT training and certifications and was started in 2004. Currently the vendor training portfolio has expanded to include Kaspersky, Microsoft, Juniper Networks, Brocade, EC-Council, Arcsight, Array Networks, Beyond Trust and others.
During bull runs on the local economy, demand for Psilog’s products and Spectrum training services are expected to drive group revenues. On the flip side during consolidations and threats, it is likely to come from demand for Comguard’s audits and security services.
There are perhaps few other distribution companies in the region that have invested in training and vendor certification services at a level comparable to Spectrum. It has 14 classrooms and trained 5,000 students in the last year. There are close to 80 engineers available in the region and in India and these can be cross leveraged for any project emerging out of Comguard, Psilog or Spectrum businesses themselves.
As the trading hub of Dubai expands it remains to be seen how Psilog copes with demands of growth supported by parent Spectrum Group’s resources.