Time to put feet on the street, concedes HGST

While several of its hard drive rivals have built up their presence in the Middle East over the years, Hitachi Global Storage Technologies (HGST) has not felt the need to have permanent representation here through a local team. That could all be about to change following a shift in the company’s priorities, as Channel Middle East found out from David Grant, channel manager for Eastern Europe and the Middle East at HGST.

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Time to put feet on the street, concedes HGST
By  Andrew Seymour Published  July 6, 2010

CME: What sort of investment is HGST making in the Middle East region?

David Grant: On a local level we are actively looking to recruit someone for the local market to help me. I cover other regions, like the Balkans and the Ukraine, so I can only dedicate half my time to this market. As the market is too large for me alone we need someone local here. Hopefully in the next month or so we should have somebody here.

CME: Will that person play a channel sales and development role?

David Grant: Their initial function will be to drive the retail business because we now have a branded product [strengthened by last year’s acquisition of Fabrik]. We need somebody to support that business and they will certainly help with branding once we get the product on the shelves. I will work alongside them because I’ve got the bulk hard drive experience and will be driving that. There will be overlap because there are customers who buy both.

CME: Have you got any candidates in mind?

David Grant: No, we are in the recruitment stage at the moment.

CME: Will they be based in the UAE?

David Grant: Yes, but the role will be Middle East-focused. Our priorities are Egypt, Saudi Arabia and the UAE, where the main volume comes from.

CME: HGST has never had any employees based permanently in the Middle East region, has it?

David Grant: We had somebody two or three years ago — a guy who joined for six to nine months and then left. Then we had a representative, which was more of a sales agency, but now we need our own local guys here to support the business.

CME: The sales agency you worked with in the Middle East was HK Consulting. What happened there?

David Grant: We basically came to a common agreement to part ways. I think Farooq [Khawaja] and Hafeez [Khawaja — the founder] had plans to do some other things and we felt that we needed some local presence here — an Hitachi presence rather than a representative or consulting agency. A local presence is always better, that’s why we made the decision to go with a local guy.

CME: If you look at competitors that have done well in this market, such as Seagate and Western Digital, they have generally succeeded in developing a strong local presence...

David Grant: Oh yes, it is clear. We have always had a presence here, but our priorities two or three years ago were to make the company money and this market didn’t really lend itself to that with how cost-competitive it was. A lot of changes have been made in the company since then so we are now more cost-competitive and can dedicate more resources to this market — not only people, but marketing support and so on.

CME: Are you seeing a change in the split of sales between the internal bulk hard drive business and the branded business?

David Grant: For the UAE and the Middle East I think it was 80% versus 20% in Q1. That is for the market in general. External is growing in this market, which is why we invested in buying Fabrik last year. It gave us immediate introduction and access to that market.

CME: Is Hitachi’s own business in the region reflective of that 80%- 20% market split?

David Grant: I don’t have the figures at hand. It is less because we effectively only came to the market last year. The global numbers for external drives were doubling quarter on quarter at one stage. That is why we need some retail [presence] here.

CME: What is the situation with the Fabrik business given that it previously had its own distributors for the Simpletech products here?

David Grant: The Fabrik acquisition gave us two product ranges: the Simpletech brand, which is now Hitachi, and then the G-Tech brand, which we had. We have maintained that because it has got good branding with the Apple market, so there is no need to change that. G-Tech is separate, so the existing distributors we have here have access to both bulk hard drives and the previous Simpletech external drives.   

CME: In terms of the internal hard drive business, the Middle East is not renowned for having an abundance of large local assemblers. What challenges does this create?

David Grant: We still see there is business for that integration — maybe not in the UAE, but certainly in Egypt where there are still a lot of tenders. I think there are also opportunities in Saudi Arabia. If you look at the situation in Russia, which is a really cost-competitive market, we do really well with the tender business, so hopefully we can duplicate that to some extent in Egypt.

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