The Midis touch

As well as being one of the largest technology groups in the Middle East region, Lebanon-based Mideast Data Systems (MDS) - or the Midis Group as it is now known - is also one of the oldest, having being formed way back in 1967. Channel Middle East met with corporate development and group marketing officer, Peter Kwisthout, for an exclusive insight into why the group’s recent rebranding means far more than just a name change.

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The Midis touch
By  Andrew Seymour Published  December 10, 2010

CHANNEL: The Midis Group owns companies such as Mindware and ABM. How many entities comprise the group in total and how are they structured?

Peter Kwisthout: The Midis Group is basically the master holding and then there are about 10 sub-holdings, under which there are around 110 entities. Each sub-holding has a president who is in charge of the different lines of businesses, some of which are logical, others historical.

CHANNEL: The Midis Group has previously referred to itself as a US$1.5 billion company. Does that figure still accurately refelect the size of the group?

Peter Kwisthout: Yes, the total revenue of the group today is about US$1.5 billion, which is pretty big because usually when you talk about a separate entity like Mindware, ABM or MDS UAE, you don’t realise the size of what is behind it. That is also why we wanted to rebrand — to elevate the profile of the group itself. In the past, a lot of people were confused between MDS UAE, MDS at the sub-holding level and then MDS at the holding level. Even though they are part of the same organisation we wanted to separate them so that MDS at the holding level is seen as a separate entity to all the different affiliates.

CHANNEL: The rebranding also reflects the fact that your business is not just based in the Middle East (and therefore the old ‘Mideast Data Systems’ name was no longer as appropriate). What sort of presence do you have outside the region?

Peter Kwisthout: Although we are traditionally very active in the Middle East, we recognised there was an opportunity for some of our capabilities in markets such as Africa and Eastern Europe. We have offices in Poland, Czech Republic and in the majority of Central Europe, as well as in Africa. It is a focus area for us to expand these markets.

CHANNEL: What kind of activities do you do outside the Middle East? Is it purely IT distribution?

Peter Kwisthout: In Africa I would say it is distribution. We have Southcomp, Polaris, HDF and ADS with a variety of brands, such as HP, Dell, Microsoft and Cisco. That is the classic distribution business where I don’t think there is much value add due to the nature of the market. In Eastern Europe, we have a lot of presence in retail with iStyle, which is our Apple retail platform, and we have systems integration capabilities in countries such as Hungary and Czech Republic. We are looking to do more systems integration in Eastern Europe because there is demand for large projects requiring implementation skills.

CHANNEL: How does the Midis Group keep track of the performance of so many diverse business lines?

Peter Kwisthout: From a financial perspective there have been some very tight processes in place for many years now, with a strong finance team at HQ level working closely with the affiliates. When you grow and evolve so fast, the challenge is more about how you address functions such as HR, which becomes a group angle that you didn’t necessarily have in the past, and marketing, which becomes about how you address certain projects as a group.

CHANNEL: The Midis Group has a history of launching new businesses and then growing them, but such a model can become more difficult to execute when a market matures. Does this mean the company is going to become more acquisitive in future?

Peter Kwisthout: I would say that when organic growth reaches a kind of dead end, acquisition is obviously the alternative strategy for us, so it is something we would look into depending on the market and the business. If there is an opportunity, there is definitely a will to keep growing and expanding. Our group today is US$1.5 billion, there is no doubt that we are going to shoot to be US$2 billion over the next two or three years. We are not a public company so we can grow at a pace that makes sense for the market. And we don’t want to grow at any cost because this is part of our integrity. In a market like Eastern Europe we might look at acquiring companies based on how attractive the business is. Our motto is not just about organic growth, even though that is what we have been doing for the last 40 years.

CHANNEL: Which pillars are driving the business at the moment and is the focus of the group going to change in any way?

Peter Kwisthout: The site and power pillar has grown tremendously for us in the last five years because we have seen a lot of people attracted by the fact that we are able to offer not only the hardware, software and integration, but the whole ecosystem around it, such as flooring, cabling, power and so on. With cloud computing, virtualisation and all these new trends, we are looking carefully at how they are being received by the market because we have the right organisation behind us to start addressing these opportunities. I think we will continue to follow our current strategy, which is based on very wide coverage of the market through different go-to-markets.

CHANNEL: Is the Midis Group an organisation that will exit a business if it fails to deliver the results it expects?

Peter Kwisthout: I am not aware of many opportunities where we have had to step away, usually we would fine-tune, modify and adapt. We are lucky to have seen extreme growth and we made some good decisions at the right time, which took us to a level that was not achievable 10 years ago when the group was less than US$300m. Moving from that figure to US$1.5 billion in one decade creates a lot of change inside an organisation and that is also why the branding became a natural evolution.

CHANNEL: Why has such a large group never attempted to publicly list itself?

Peter Kwisthout: We realised that we had a good model, it was successful, and we didn’t feel the need to go public. It works, customers are happy, our suppliers are happy. I don’t think there is any plan to go public to be honest with you. And by the way, it doesn’t mean that because we are private, we are not transparent — on the contrary. We have an audit team at the group level, which is a function we added two years ago, and when it is required our doors are open to key suppliers and certain customers. We operate as a multinational without being on the stock market, which gives us a big advantage in that we don’t have the quarterly pressure that most [publicly-listed] multinational companies have. We can afford to look at where we want to go over the next two or three years and decide the strategy.

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