Dynamic distribution

Channel ME speaks to Mindware general manager Mario Gay

Tags: Cloud computingMindware
  • E-Mail
Dynamic distribution Mindware is entering a new phase for the distribution business, says Gay. (ITP Images)
By  Mark Sutton Published  May 16, 2011

Mindware marks its 20th anniversary this year, Channel ME spoke to general manager Mario Gay to find out about the company’s plans for the cloud, the balance between value and volume, and where the company is heading next.

Mindware, one of the longest established distributors in the region, is marking its 20th anniversary this year. As part of the Midis group, the company has a strong foundation in the region, and has also shown a long-standing commitment to both value and volume sectors. It can also boast one of the longest histories in the virtualization space thanks to its relationship with Citrix.

The distributor was founded in 1991, as a spin-off from Arab Business Machines, to handle distribution of Microsoft. In its first year, the company had five employees and generated revenue of $1 million. Today, the business has risen to $200 million a year, and the company has 130 employees, with offices in Dubai, Riyadh, Cairo, Jeddah and Beirut.

CME: How has Mindware stayed ahead for those 20 years?

MG: There is a combination of innovation on one side, and a conservative financial approach. This has been the secret of Mindware. Innovation, because if you don’t bring in new vendors and technologies, then you can’t offer value; and on the other side, you have to not be swayed by the market, and keep your feet on the ground. You have to be consistent about the market fundamentals, and understand what is the real demand for products. And you need a lot of dedication from all of your employees. All of the people that have worked for Mindware have made a big contribution to our success.

In terms of Mindware and where Mindware is going, this year we are celebrating our 20th anniversary. I am only the third general manager in twenty years. The three general managers, can also equate to the three stages of distribution in the company. We moved from the first stage, where the business was just box moving, and you were passing some value to the channel, but the bottom line was we were doing the job that the vendor didn’t want to do. We had to move the boxes, take the credit risk that the vendor didn’t want to take, and be able to process the order on time.

In the second phase, we needed to provide value-added services, we needed to provide professional services on top of what we were doing, and now we are entering the third phase, of cloud computing.

In the third phase, everything that we did historically, we will continue to do, but we need to add a third layer, of the distributor preparing themselves for being an aggregator of cloud services, or software-or-as-a-service, because that is where the market is going to go. Distribution will not disappear as a business, but it will change. We need to adapt to the new demand.

CME: What is Mindware doing to prepare for the cloud?

MG: We have prepared with our CRM roll-out and our B2B platform, which links our ERP system with those of our major vendors, which simplifies the type of operation that we are running, reduces paperwork and cuts down the time for carrying out a transaction. We have gone for a high level of integration and visibility with the vendors because we wanted to have a fully transparent operation. We needed to have the pipeline and the infrastructure ready to build the new model of distribution.

CME: You have a long relationship with Citrix, are there other vendors that you are looking at to add to a cloud portfolio, and how as distributors are you going to fit in the supply chain for cloud?

MG: A big chunk of software will no longer be physically distributed, so with the software not being distributed, we will be working [just] on a transaction basis with the vendor. Then there will be many different services that can be combined together. In the past, many of our vendors, Microsoft for example was more interested in working independently [than working with other vendors]; now they are aiming to work closely with Citrix. The big vendors are looking to club together and be more integrated in their offerings, so there will be more of a combined, pre-packaged solution that we can offer to the customers.

We need to be aware that the enterprise market is growing, but it is not growing like in the past, and that the SMB market is growing faster than the enterprise market. All of the vendors are focusing on the SMB business. This means the ability to interact with a large number of customers, and to be able to provide them with a pre-packaged solution is extremely important.

CME: If the distributor is just providing reach to the SMB market and some consultation, is there still going to be good margins?

MG: The margins, I think, will continue to go down, they always do that in the IT sector over time, so what you need is to add additional services to what you are currently offering, to compensate for the fact that historically, the margin has always decreased over time.

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code