Anand Choudha, Founder and Managing Director of the specialised security distributor, Spectrami, gives us the lowdown of how he plans to grow the business to $100 million in the span of next three years.
The regional distribution space has witnessed several lows and highs over the last decade resulting in a number of players entering and exiting the market. Many have come with claims of ambitious growth and only a few have been able to survive the complex nuances of the IT landscape.
With consistent growth year-on-year, the security-focused value-added distributor, Spectrami has been able to thrive in a market that is dominated by established players. The six-year-old company’s Founder and Managing Director, Anand Choudha, attributes its success to bringing niche technologies to market. Having closed the year at $20 million in 2015, he is on a mission to grow the business to $100 million in three years, which might seem like a tall order to most, but focusing on delivering new and niche technologies is one of the reasons why Choudha is confident of hitting it.
“We don’t owe anyone anything and, therefore, are in the best spot possible. And additional investments from KBBO Group have only made us even stronger financially. This should also give our partner community confidence in our intentions to stay and grow in this market.”
When he set up the firm in 2011, his expansion plans didn’t just limit to the GCC but the aim was to be an EMEA player eventually.
“We always hear of global companies coming into the Middle East region. We aspired to be a Middle East company venturing into the Europe market. But first we had to achieve certain milestones,” he says.
Once the distributor had a strong footprint in GCC countries such as UAE, KSA, Oman and Kuwait, Choudha decided to make the Europe dream happen. Consequently, it was important to strengthen itself financially, he says.
“Abu Dhabi-based KBBO Group, a leading investment company with a diverse portfolio of projects, invested in Spectrami last year and now have a sizable equity. With their support and funding, we can move across the European market and have created a strategy of being an EMEA player over the next two to three years. We are looking to grow the business five fold over this time period.”
The KBBO Group backing is the second reason why Choudha is certain that the goal of $100 million in three years is attainable. He believes this will only happen if there is a combination of both organic and inorganic growth. Organically, a business can grow around 20 to 40 percent year-on-year.
“Our plan is to enter new geographies through the acquisition model, which constitutes the inorganic growth aspect. Last year, we set up business in UK on our own, which will be the headquarters for our Northern Europe operations. We are now in the process of finalising an acquisition in Germany and will have footprint in Amsterdam soon.”
Next year, we will see the distributor entering countries across Nordic, Eastern Europe and South Africa. The company is looking at achieving approximately $45 million in the next financial year and subsequently the final figure.
“The third reason and perhaps the most important one as to why we are certain we can achieve this is the fact that Spectrami is a self-funded company without any debts or outstanding liabilities from banks,” he says.
The biggest problem the industry faces today, is players doing business on borrowed funds, then when a situation arises where banks reduce their facilities or squeeze their liquidity they are compelled to exit the market.
“We don’t owe anyone anything and, therefore, are in the best spot possible,” he explains. “And additional investments from KBBO Group have only made us even stronger financially. This should also give our partner community confidence in our intentions to stay and grow in this market.”
According to Choudha, the firm’s Vendor Extension Model (VEM) strategy has enabled it to be a success with key brands.
“We had started off by betting on new vendors and developed a market for future technologies at that time such as SIEM, APT, vulnerability management and MDM,” he adds. “But it was important to consciously differ ourselves from other value-added distributors. This is why we introduced VEM to this region.
“When bringing in new technologies, we need to go beyond the role of value-added distributors, we need to become an extension of the vendor themselves.”
The distributor has a direct touch model with end-users from an engagement perspective, creating a market for the niche technologies. Usually, partners have inhibitions when it comes to new technologies because they are not aware if there is a market for it, if the technology will work in the customer environment and are not aware of the support system it comes with.
“Our objective is to always empower and enable the channel for the long run. We want our partners to be profitable. When partners work with us, they can be certain of higher margins compared to our competition.”
He says, “We create the customer engagement model to ensure we have identified the opportunities for our channel partners. This way, partner engagement goes to the next level. When they see the opportunity, they are excited to be a part of it and want to be onboard.”
While introducing new technologies, it is necessary to have a bit of hand-holding, says Choudha.
“Being the representatives of the vendors in the region, it is paramount for us to have pre-sales resources, PoCs and an adept post-sales team for implementations, because this is what a vendor would have as well – sales and channel approach along with technical resources located on ground.”
Once the products become mature and successful in the market, the distributor takes a back seat and hands it over to its partner ecosystem to deliver the solutions completely.
“We rather have a deep engagement model with end-users when the vendor is new to the territory. We are proud to have been able to identify the right set of future technologies and see these vendors increase their sales force and invest into the region. We believe the vendor extension model which was unique, has helped us onboard new technology vendors.”
Choudha says partners should opt to work with Spectrami because they can be assured of not becoming transactional entities.
“We engage with customers only for new products. Our objective is to always empower and enable the channel for the long run. We want our partners to be profitable. When partners work with us, they can be certain of higher margins compared to our competition.
“We urge our partners to invest on services so that they don’t just remain transactional entities and can make better margins. Most of our resellers are not transactional any more for the mature products we have brought into the market. We will continue supporting our channel partners with best possible investments in enabling them through training, skills and incentive programmes,” he adds.
The distributor is expecting to clock in around 30 percent growth for this year.