WD claims intimacy is key to prosperity

Hard drive vendor Western Digital is taking steps to localise its operation in opportunity markets in the Middle East. Peter Edinger, VP sales EMEA, stopped by to explain how its intimate approach will inspire channel loyalty in a market threatened by corroding margins.

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By  Dawinderpal Sahota Published  September 6, 2007

Hard drive vendor Western Digital is taking steps to localise its operation in opportunity markets in the Middle East. Peter Edinger, VP sales EMEA, stopped by to explain how its intimate approach will inspire channel loyalty in a market threatened by corroding margins.

What opportunities does Western Digital perceive in the Middle East?

Some of the markets have seen exponential growth in this region and that is linked with the levels of internet penetration. In most European countries, internet penetration is over 40%. In the Middle East, Bahrain, Kuwait and Qatar are the only markets where the level of internet penetration is 30% or above. The rest of the Middle East is single-digit or low double-digit penetration so the scope is bigger.

So how do you see the hard drive market in the region evolving?

As internet begins to get into people's houses, they will buy more PCs and obviously there will be more demand for hard drives. More people in this region will start making use of this technology and that will be driving demand.

And how does WD intend to capitalise on the surge in demand it expects to see in the region?

The strategy and philosophy from WD is that we have - and will continue to have - local people in the countries and regions. Some IT companies think that they can address these regions from America, Asia or Turkey, but this is something that limits business opportunities and relationships.

So how important is in-country presence in a region such as the Middle East?

Business is something that has to be carried out by human beings. Over the last 15 to 20 years I've experienced that if you have local people and a local set-up it will drive the business. We have people in Dubai and Egypt and we want to expand this further. We're focusing as much as is necessary on manpower and marketing concepts to drive those countries in MEA to a position we'd like to be.

And which markets are you planning to expand into?

Everywhere that we have a reasonable market share and we see that there is a need for our base or a service centre is needed, we will go into that market. We will never say to a partner in a country: ‘Yes we have a 30%, 40% or 50% market share, but you have to send your products out of the country for our convenience.' We are going local, and this is a step by step process. We are very confident in our products as we have a very low failure rate so in most cases it's first the in-country business and then the service centre, and this is something we are doing everywhere in the world.

What challenges does the Middle East hard drive market face in the Middle East?

When I came from the graphics industry I noticed resolutions are definitely at the forefront, from gamers to entry-level. In the hard-drive market it's a case of price versus capacity.

And how do you intend to overcome such a ubiquitous trend?

We're trying to take it all in a different direction in the future. Customers do think price is important, and capacity is necessary, but what are their needs? If you're a gamer, do you need a high performing drive? If you have a network, what do you need for a network? You have to have a raid system in place to copy your data so its absolutely safe. If you have concerns for security, what's the best product? Or what's best for the internet? Suddenly we're not talking about price or capacity, we're talking about solutions and it's in this direction I believe our industry has to go.

And how far off is this vision from being realised?

It's a long way, and we're in the very early stages of this, but it's the strategy we want to take. We don't want the focus to be on price because you're not buying a ‘price', you're buying a solution.

How is WD allaying distributors' concerns that the hard drive market is failing to provide adequate profit margin?

We're the first hard drive company to deliver a partner programme which is not reseller or distributor oriented, but actually a demand creation and loyalty programme. The key to focusing on demand creation and loyalty is having people on the ground. So if a reseller has an issue in Riyadh he doesn't have to go to his distributor, for him to go to the European guy who will go to the guy in the US to sort the issue out. We have someone there who will pick up the phone, drive down to his shop and if it is reported at 11am, by midday it's sorted. I think this is the competitive advantage we offer our partners.

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