Vaulting ahead in value added distribution

Thierry Chamayou, deputy general manager at VAD Mindware, claims the Citrix, Novell, Intel and Symantec specialist is poised for strong growth this year as it ponders whether to shift its warehouse facilities

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By  Published  October 31, 2006

CME: You returned to the distribution channel this year following a spell at vendor D-Link.

How has the distribution market changed in that time?
Thierry Chamayou: I think the name of the game in distribution today is financing, understanding the need for product availability, adding value and being able to share technical resources with the channel.

I don’t think that a pure distribution house can stay alive unless they provide a value added offer or a financial offer to the market, or bring in new concepts and technologies.

You have to differentiate yourself — not just for your own benefit but to help the resellers and the channel too.

If you are generally speaking about distribution trends, then I think a big change has also been how distributors - be it Tech Data, Aptec, Redington, Online, Logicom or others - are able to understand the financial needs of the channel and play with that equation.

CME: What is your assessment of Mindware’s model?
TC: Mindware is a distributor that is truly doing value added distribution in the sense of how we all know it from Asia-Pacific to the States.

It is value added distribution with technical people, technical knowledge, skills, in-house training, demos and seminars.

It is unique in the sense that very few distribution houses are capable — technically or financially — to deliver that type of value add.

CME: You also have a sizeable volume components business comprised of Seagate and Intel. Do you really think a combined volume and value model is sustainable?
TC: We have historically been sustaining that model and we have a very clear intention to keep on sustaining that model.

We are the largest Intel distributor in the Middle East and we will remain that way because our approach is very vertical — the way we tackle the market means we understand the volume business.

We have always been very strong in Intel and there is no intention for us to review or redesign that.

It’s very important.

We have a very enjoyable and close relationship with Intel and this is something that we don’t want to revisit.

CME: What kind of sales growth are you anticipating in 2006?
TC: It depends on the division.

But we have been enjoying consistent growth year-on-year and we are expecting growth of 25% to 30% this year.

The market is booming and very demanding.

CME: Is the value added model a people-based model and are you having to scale up to match the growth you expect to see?
TC: I don’t necessarily think so.

We now have 120 employees; last year we had about 95.

The key component in growing the value business is understanding what the market and the vendors want and working very closely with both of them.
For us it is important to have the right person to look after each vendor and their own markets.

It’s much more important for us to have efficient people than to have an army of people.

CME: You are one of the few distributors to have a warehouse in Dubai Airport Cargo Village. What advantages does that bring?
TC: To be honest, we are revisiting our warehousing investment and in the coming future we are going to move to a different way of doing warehousing.

So far we have been extremely happy with what we have been enjoying as a service in Cargo Village.

That was mainly for our components business.

The service was very efficient and nothing to complain about.

But everybody has their warehouse in Jebel Ali and that is an option we are reviewing.

We are working actively on finding ourselves another alternative.

CME: What about your product portfolio? Are there any gaps that need to be filled?
TC: We are definitely going to do more in storage.

In the networking part of it we are also having a look at some potential new partners because we want to enlarge our offering for the networking space.

We have just signed up with Wyse and there is one more major vendor on the component side that will come on board soon too.

CME: Has the credit crisis earlier this year forced you to change your approach to credit management?
TC: I’d say it has made us look closely at what the essence of each and every reseller is.

It’s forced us to think a bit more about what those partners are doing in the market, how active they are, and what their true business is.

But have we changed?
I don't think so.

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