Who’s bigger, who’s best?

The Channel Middle East power list is poised to return in March as we profile and rank the region’s largest IT distributors. Last year’s list covered a dozen of the largest Dubai-based distributors with combined 2004 sales of US$2.286 billion. These 12 heavyweights reckoned that their combined sales would soar 36% to US$3.114 billion in 2005.

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By  Stuart Wilson Published  January 18, 2006

The Channel Middle East power list is poised to return in March as we profile and rank the region’s largest IT distributors. Last year’s list profiled a dozen of the largest Dubai-based distributors with combined 2004 sales of US$2.286 billion. These 12 heavyweights reckoned that their combined sales would soar 36% to US$3.114 billion in 2005.

How did they fare? Well, that’s what we intend to find out in this year’s survey. Last year’s list stirred up a fair amount of controversy in the regional channel with some distributors claiming that rivals were producing inflated sales figures to boost their ranking. A couple of distributors in Saudi Arabia also claimed that their revenue achievements meant that they would be included in any list of the top regional players that was not solely Dubai-based.

Unfortunately, there remains a lack of financial transparency in the market and unless all companies are forced to file audited accounts, this situation looks set to persist for the foreseeable future. For these reasons it is important that all distributors in the region that believe they are one of the top dozen distributors by revenue should contact Channel Middle East and make their case for inclusion.

Just to refresh your memory, last year’s list was headed up by Almasa, which claimed a whopping US$332m in sales across the Europe, Middle East and Africa region for 2004 from its Dubai hub and estimated that its sales would hit a mighty US$500m for full year 2005. Tech Data and Aptec picked up the number two and three spots respectively, while FDC bagged fourth position.

Redington, Logicom, Mindware and Emitac filled positions five to eight respectively, followed by a quartet of components specialists, led by global hard drive distribution behemoth eSys. Fast-growing Golden Systems picked up the twelfth spot in the ranking with sales of US$60m for 2004 and a prediction of US$75m for full year 2005. Here’s the complete rundown of last year’s diamond dozen of Dubai-based distributors selling into the Middle East reseller channel and their claimed 2004 sales:

Almasa IT Distribution: US$332m
Tech Data Middle East: US$305m
Aptec: US$302m
FDC: US$300m
Redington: US$280m
Logicom: US$190m
Mindware: US$140m
Emitac Distribution: US$135m
eSys: US$98m
empa: US$80m
Asbis: US$64m
Golden Systems: US$60m

This year we are keen to hear from the giants of distribution that were unable to provide us with figures last year. Arab Business Machines (ABM), AIM and Al-Jammaz in Saudi Arabia, and the major distributors plying their trade in the Levant may well feel that they deserve to be included in this year’s list.

While divulging top line financial figures for the first time may appear daunting, revealing the true size of each distributor’s business in the region, geographic remit, product portfolio and reseller reach, enables vendors to make informed decision on the best partners to sell through. It also gives the reseller community valuable insight on the best distributor to buy from in terms of credit availability and financial strength.

Admittedly, looking at top line sales is not perfect. As most distributors will tell you, it is easy to grow the top line if you are prepared to sacrifice the bottom line, but in a region where financial transparency is still non-existent, it is a valid starting point.

Early indications suggest that most distributors did record positive sales growth during 2005. With IT spending on the rise and more vendors investing resources on the ground, the role of authorised distribution partners in the Middle East is becoming more important. Vendors are also doing more to stamp out grey market flow both into and out of the Middle East, meaning that the sales figures for the regional distributors are becoming genuine yardsticks for the size of the market in the countries that they cover.

You’ve got to be in it to win it and we’re keen to hear from distributors across the Middle East that deserve to be in this year’s power list. Drop me an e-mail on stuart.wilson@itp.com or telephone +971 4210 8229 to make sure you’re included in the 2006 power list.

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