AVG overhauls Middle East distribution model

Pluto to be replaced by two new disties as security vendor looks to grow Middle East sales

Tags: AVG (www.avg.com)Metra Computer GroupPlutoUnited Arab Emirates
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AVG overhauls Middle East distribution model Gareth Williams claims AVG’s margin offering and renewal tracking system makes it one of the more compelling antivirus software vendors to work with. (ITP Images)
By  Andrew Seymour Published  March 22, 2010

Security software vendor AVG is revamping its regional distribution model as part of efforts to strengthen its retail and SME coverage in the region.

Its current relationship with existing distributor Pluto will be left to run its course as it turns its attention to working with two new partners - Metra Computer and another distributor that it will officially name later this month.

Metra will be largely responsible for developing the consumer market, while the other distributor will focus on the SME sector.

Gareth Williams, VP emerging markets at AVG, claims the move is about ensuring distributors have the right "match-up" with AVG. Pluto's core strength lies in gaming products, whereas its preference is to forge partnerships with distributors that have a strong IT background, he said.

"Pluto is a great company and there is an alignment between gaming and security, of course, but it is not really strong enough for us to get out there into the reseller base, especially in the SMB market," explained Williams.

"Retail is one part of the market over here, but nobody in any channel will tell you that retail is the most profitable part of their business - both for ourselves and for the channel - and therefore it is really critical that we build a channel across the whole region to address the small business and the small reseller," he added.

Aside from Pluto, AVG has been addressing the region through a 30-strong authorised reseller network. Those accounts have been managed from outside the region, but the company does have plans to install a business development manager locally in the coming months.

"Our aim is to really support the resellers actively and create access via a reseller centre which gives them tools and resources," said Williams. "They will be able to get support directly from AVG but also buy locally from a distributor, so we are trying to achieve the best of both worlds - direct engagement with the vendor as and when needed, but also that local support and coverage they get from distribution."

Williams insists resellers can expect to make margins of between 20% and 40% from selling AVG's antivirus and internet security products, while he claims the company offers an attractive annuity business due to a system it has developed to track renewals.

"One of the things that we found from looking across the world at the channel business is that it is quite irritating for resellers if they spend the time and effort to make a first sale and then when it comes to the renewal time the vendor takes that renewal direct," he said.

"We are extremely keen to support our channel in that respect and that is essentially for the lifetime of that contract. So long as they are a reseller and so long as the customer is using the product we can pass back through commissions on renewal. We are not aware of anybody else who is able to do that in the same way - to route renewals back through to resellers if the customer buys directly from the vendor."

The Czech Republic-based outfit believes the market it serves is worth about US$22m in the Middle East, with about 80% of that figure coming from Saudi Arabia and the UAE.

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