The newly-appointed General Manager of value-added distributor, Mindware, Gilbert Lacroix, shares plans for transforming the company into a true solutions player.
What has been the impact of the slowdown in global and regional economy on the channel market?
The geopolitical and economic woes may have had an impact here just like the rest of the world, but there is still a huge demand for technology in our region. The governments are leading the technology spending in the Middle East, and I don’t see that slowing down any time soon. Yes, of course, during times like these, you need to evaluate with whom you deal with, because payment cycles are getting longer. You will see many weak players disappearing from the market while the strong become stronger. We are part of the $4 billion Midis Group, which employs more than 5000 people in this region. We have a solid base in terms of finance and the right set up to face any economic crisis. If you do the right things, you can weather any storm and emerge stronger.
Are there plans to expand your coverage?
The natural way to distribute is to go to the main system integrators, and they go to the biggest users. That market is easy to cover. But, when you start to go one level down the pyramid, you need to put in more efforts and it’s impossible to do face-to-face interactions with all your partners in that tier. This is why we are planning to use new types of digital media to engage them and define the touch points. It is also important to decide what kind of partners you need to bring with you; the SME partners are not the ones you need to address government or service provider market. So segmenting your partners according to the markets is key to success. We are also looking to fine tune our operations, logistics and automate back-office functions to gain process efficiencies and keep a lid on costs.
What differentiates Mindware?
If you are a vendor coming to this market, you have got two choices – either go with global distributors or local players. Often, you will see global distributors have many compliance issues, and they may not be prepared to invest in the market during crises and stay put here. Being a local company, Mindware knows the dynamics of the local market and we know how to deal with tough economic conditions. We may not be a huge company, but we aren’t small either. Being part of the Midis Group, we combine many things such as systems integration, and vendors know that we are here to stay.
Do you have any plans to expand the portfolio?
We don’t want to become an exhibition company. We are not trying to cover all the brands and products; we are going to focus on products where we know we can add value and we don’t have any competing products in our portfolio. We want to organise the company by solutions, because that’s the path we are taking. The plan is to introduce plug-and-play type of solutions for the SME market, so that our partners don’t have to make the effort to put it all together. We want to prove to our vendors that we can bring to the table the value-addition that others can’t.
What kind of growth are you targeting this year?
We had around 30 percent growth last year and we are hoping to achieve the same kind of growth in 2016 as well. We have to make sure that we don’t make any mistakes and become more selective about the partners we work with. We are on track to achieve our revenue target of $400 million this year. Achieving this target is easy, but we want to do it in a certain way and make sure that we remain profitable.
Distribution has become a low-margin game now and it is hurting the bottom lines of many players. How do you plan to steer clear of this trend?
We are not playing the low-margin game, and we will not sacrifice margins to sell more. We know the kind of margins we want to build and how to go about it. It might be difficult to get high margins from some products but we compensate by selling low-volume, high-margin products. It’s all about the balance. Right now, volume products account for 25 percent of our revenues but going forward that is going to shrink as we transform ourselves into a solutions-focused distributor.
