With value add distribution taking on a whole different dimension in the Middle East and North Africa (MENA) region, Almasa IT Distribution is strengthening its Value Business portfolio with a salvo of initiatives the company believes will give it much more structure in address the channel in this geography.
For starters, Almasa has had to streamline its operations, a move the distributor says has given it structure in the sense that the company’s business operations have been divided into four business units namely the Value, Components, Retail and Volume business units.
George Joseph, regional manager, Value Business Unit at Almasa IT Distribution, says If you look at the path from vendor to end-user, you have a three scenario where the vendor goes directly to the end-user, a vendor goes through a reseller to end-user and then you have the last one where a vendor engages both distributor and reseller to reach the end-user customer. Joseph says the latter is where Almasa comes and what the company provides in terms of the value business is mainly pre-sales support where it actually works with partners and the end-user to come up with optimised solution designs which are cost effective.
Joseph adds that the second important element distributors bring to the value adding chain in the channel, is the logistics and in today’s IT world customers want everything yesterday. “If you look at a vendor’s product cycle etc, there is a gap. So what a distributor does is to fill in that gap, carry stock to be able to feed and fill the gaps which the vendor has,” he says. “At Almasa, we have a very strong logistical set-up where all our product lines are housed in the main warehouse in Jebel Ali.”
Joseph says as Almasa IT Distribution and especially with the recession affecting the market across in the MENA region, the company has taken the time to consolidate, streamline and become a leaner operation in a tough and competitive market. He says quite early towards the end of 2008 beginning of 2009, Almasa decided to streamline its business to align it with the market forces so that it maximises opportunities. As a result, adds Joseph, there has been re-alignment within the market and the organisation internally with Almasa Value Business Unit focusing primarily on five products in areas that include: security, networking, communication, IT infrastructure and information assurance. “The recent addition was Phybridge and the main reason we have added this brand is because we saw the market for it the region. “We believe Phybridge is bringing in a strong complement to the existing solutions within the value business and the market for its solutions is ready to embrace this brand.”
Joseph says as a result of the streamlining, the company as a whole has a more solid structure and the dividing of the company’s operations into four distinct streams, strategies and go to market has given us a lot of momentum.
Joseph says while the company remains solid with its coverage in the MENA region, from a North Africa perspective, the Value Business Unit only addresses Egypt and Libya. “What we have not addressed as Value business Unit is the other countries in this part of the continent, however the Volume business Unit already has presence in Algeria, Tunisia and Morocco,” he says.
Joseph says the company is now planning especially with Phybridge on board, to utilise the presence the Volume Business Units in the three countries to introduce value products. “We will not be targeting the same partners that the volume business unit is engaging already,” he says. “What we will explore as we introduce value solutions are opportunities that extend Almasa’s reach into those markets beyond Egypt and Libya.
He explains that although the volume business unit is already present in other countries in North Africa, the market still lacks clarity in terms of how channel business is done. “Issues like how secure the transactions are and how long sales cycle take etc are still murky for the value business,” he says. However, Joseph points out that because the volume business is already established in Algeria, Tunisia and Morocco, it has become easier for the value business unit to identify which partners it can go to market with. “I expect Phybridge to play a very important role in this region going forward,” he says.
Given that IT spending has been slow in the region Joseph adds that, while the recession has been very tough for all involved in the channel in the region, Almasa had an overflow of business from 2008 to 2009, which helped it to pull through a difficult and challenging 2009. “It was not as bad as we had expected. We were expecting far worse but that didn’t happen,” he says. “We were able to achieve about 75% of our target considering the situation as it was.”
As for the 2010, Joseph notes that in the first half of the year, there was a dip but the market has started to pick up across the region. “Almasa’s prime markets in the MENA region have been the UAE, KSA and Egypt, with the second tier being Bahrain and Qatar,” he says. For Egypt, in the first have we had a drop but the second half especially in Q3 there has been some resurgence in the Egyptian and KSA market.
Joseph explains that while the market conditions have not been conducive, Almasa has managed to survive the tough business climate because of the pipeline, business overflow from 2008. “That plus targeting and working with the ‘right’ partners has solidified Almasa’s position in the MENA market to ensure that it’s giving the channel the necessary support and tools.
Joseph says as one of Almasa’s prime partners and vendors in the region is Avaya and with the Nortel takeover which happened a year ago, this has become a huge business for the company. “We see the integration of the two is pretty much there,” he says. Joseph explains that Nortel had a huge installed base in the region which is why the interest for both voice and data has been growing since this merger was announce. “We see growth going forward is going to be more on the data side rather than voice. Growth will always be there but data is where we see significant growth and that’s where we have positioned ourselves strongly,” he says.
Joseph adds that Almasa already had the HP Networking business and with the Nortel assets that came through the Avaya acquisition, the company’s networking and communications offerings have been strengthened further. “The UC space will be a huge focus for the Value Business without doubt,” he says.
Aside from the UC and strengthened networking business Joseph providing channel partners with the “right” product mix at their doorsteps is what we will be focusing on as well in the coming year. “Besides increased credit which always comes first on the channel partners list of demands, what partners also want is a balanced mix of solutions. “We are trying to see how we can circumvent the logistical challenges that our partners experience in the region,” he says. The other area, according to Joseph, is where partners are looking at increased technical support and because the technology offerings within Almasa is growing particularly with the Avaya portfolio offering, resellers would like the distributor to provide that support to them and this is what the company will be focusing on going forward.
Almasa IT Distribution has enhanced its Value Business Unit as the company moves to strengthen its offerings to the MENA channel. Reseller Middle East finds out how the company is implementing its new plan.