As IT spending is slowly improving in the Middle East region, regional components specialist distributor Golden Systems is using this time to outline new strategies that include expanding the product portfolio, enhancing partner incentives and developing the business in markets that are still inadequately developed.
Ehsan Hashemi, COO at Golden Systems Middle East, says that business in 2010 has been good for Golden Systems because the company was able to meet and exceed its projections across the board. This, says Hashemi, was congruent with the regional IT market that also experienced stabilisation, especially when compared to other geographies where business slowed down during the economic slowdown. “We expect our business to continue growing next year,” Hashemi says, adding that earlier this year, Golden Systems signed distribution partnerships with ZOTAC, CoolerMaster, Choiix, BitDefender and G Data Software. “So our portfolio of products has also increased in 2010,” he says. “We are actually projecting growth in all our segments. However, we expect to see major growth in our newly instituted Enterprise Solutions division.”
Hashemi, says the company has come to discover that in recessionary times or periods of economic difficulty, the enterprise segment focuses on IT infrastructure development. In addition, he says Golden Systems has paid special attention to the channel and implemented an in-house developed system to reward the channel for its loyalty. “We developed an online customer loyalty portal and since the software infrastructure was developed internally, we were able to create a scalable system with multiple languages to support the needs of our ethnically diverse channel in the region,” he enthuses.
Hashemi points out that in the past, the industry experienced double digit annual growth, however, in 2009 the IT industry was faced with the difficult task of “survival”. “It was a tough year for everyone involved,” he says “Despite the challenging global economic conditions present throughout last year, it was a milestone year for Golden Systems,” he says. “During the year (2009), we expanded our operations, increased our product offerings, moved into our new state-of-the-art headquarters in Jebel Ali and expanded our team.”
He adds that when most companies were simply looking to survive, Golden Systems was one of the very few distributors in the region, which experienced growth. “This growth was possible because of proper planning, healthy stock rotation and inventory and cash flow management,” he says. Aside from expanding its product basket, Hashemi, says Golden Systems has also concentrated on undeveloped markets such as the CIS countries, North Africa and Iraq, which helped the company to compensate for the limited demand in major markets in this region. “We had worked on a dynamic plan that allowed us to adjust to the market and this plan definitely worked for us,” he notes.
Channel initiatives
Hashemi says Golden Systems has a number of channel initiatives planned for 2011. For starters, he says the company is working closely with its vendors to work out training programmes, seminars, road shows and partner programmes for channel partners and resellers across the region. “We will be focusing on training our channel partners showing them the technical advantages of our products through technical marketing seminars that will be conducted throughout the region,” he says.
Hashemi adds that the company has invested a considerable amount into its marketing and RMA service departments. “We will continue to support our channels in every way possible and we’ve set up an RMA centre that caters to the entire channel allowing us to service our channel partners in the region,” he says. “In most cases, we do not send any faulty products back to the vendor and the customer experiences little or no delay at all.”
In addition to expanding the products array, Golden Systems is expanding the market reach and reinforcing the existing channel network, Hashemi says the other strategy Golden Systems employed was working closely with the core companies in the field of processors such as Intel, nvidia and AMD in order to better support the market. This strategy has proved to be important to driving business in the market.
Hashemi says although the market is improving, the biggest issue that is challenging the channel is margins being reduced. “In order to assist the reseller partners, in this regard, we have developed a loyalty programme and we are working closely with the vendors to reward the channel,” he says.
Hashemi says while margins on products have continued to decrease over the last few years, Golden Systems has refocused its business strategy to combat the decreasing margins. “We have make a concerted effort to concentrate and shift our sales volume from the entry-level (most susceptible) products to the mid and high level market segments,” he says. “Although we find that the margins have eroded for the entry-level segment, we find that when you offer a complete product basket that covers all ranges (entry to high end) the margins average out.”
Skills challenge
Hashemi says the foundation of any good business is its human resource. He adds that Golden Systems has several programmes in place to train its staff and reward them accordingly. “We have a strong team of qualified and experienced professionals and are continuing to hire the best in the industry,” he says. “Our vendor partners also assign staff to work alongside with our employees to train our channel partners on selling, implementing and supporting their technologies. Some of our vendor partners have their employees sitting with the respective product teams at our Jebel Ali headquarters.”
Enterprise push
Hashemi says while the company is delighted with what it has achieved this year, 2011 has even greater business prospects and looks very promising for for the company. “We foresee serious growth opportunities next year as we plan to introduce new products and tap into new markets. We have made some acquisitions that will allow us to tap into the enterprise segment and allow us to become a ‘solutions’ provider,” he says. “We anticipate that tapping into new markets coupled with our sustained growth in the components sector will make 2011 a great year for Golden Systems.”
He points out that in addition to the Enterprise Solutions division, Golden Systems has been in the security software solutions space for several years now. “Although we are not known for our software portfolio, we are always looking for products that suit our channel and complement our existing product portfolio,” he concludes.
Specialist components distributor Golden Systems Middle East is planning to introduce new products that will allow it to offer solutions to partners that target the enterprise segment. The move, says Golden Systems, will allow it to transition from a pure components focus to becoming a solutions distributor.
