Seizing the opportunity

Channel Middle East spoke exclusively to Asim Saud AlJammaz, vice president, Al-Jammaz Distribution, about how the company is preparing to seize the managed services opportunity and ramping up its business to take a bigger slice of the regional IT distribution market.

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Seizing the opportunity Asim Al Jammaz
By  Manda Banda Published  January 31, 2012

Channel Middle East spoke exclusively to Asim Saud AlJammaz, vice president, Al-Jammaz Distribution, about how the company is preparing to seize the managed services opportunity and ramping up its business to take a bigger slice of the regional IT distribution market.

A l-Jammaz Distribution is one of the biggest names in IT distribution in the Kingdom of Saudi Arabia (KSA), with a business that was worth over $100 million in FY 2010 alone. Founded in 1975 as Al Jammaz Group, Al-Jammaz Distribution is its IT subsidiary and started its operations focusing on the KSA market in 1996.

As a group, the company is one of the biggest conglomerates in the Middle East and has various subsidiaries in different industry segments that include: travel, food, retail, IT, investment, logistics and agriculture sector. The group has presence in the KSA, UAE, Kuwait, Qatar, Bahrain, Pakistan, Lebanon and Egypt.

Al-Jammaz Distribution is one of the strongest operators in IT distribution across the Kingdom with the company boasting a Retail, Service Provider, Professional Services, Logistics, System Integrator Channel and, Service Centres and Customer Care Business Units.

Since its inception as the IT distribution subsidiary of Al Jammaz Group 15 years ago, Al-Jammaz Distribution has been doing business with brands such as Cisco, EMC, Panduit, Linksys, Thomson, Alcatel Mobile Phones, Sun, Saifor Data, Brand Rex, Microsoft, Acer and Iomega. Its System Integrator Channel business unit was the best performer in FY 2010 contributing most of the revenue to the company. This division contributed over 30% of business to the company’s annual turnover.

Asim Saud AlJammaz, vice president, Al-Jammaz Distribution, said although the company has focused on the KSA market since its inception, it is now making progress on steadily building its business in the region, with the KSA remaining its regional hub.

AlJammaz said the company has resisted the temptation of expanding operations into other markets in the region because it wanted to get its business model right in the KSA. “Despite the group’s well known presence in the Middle East, we delayed to expand because we wanted to develop our channel and business model to benefit the vendors whose products we distribute and the resellers who take these solutions to market,” he said.

The company currently has 12 point of sale offices and four service centres across the Kingdom. From a small number of staff at the time of inception, the company has now expanded to over 140 employees in the KSA. Headquartered in Riyadh, the distributor has branch offices and warehousing facilities in Jeddah, Khobar and Qasim.

“We have interest in entering the UAE, Kuwait, Qatar, Bahrain and Lebanon,” said AlJammaz. “However, the entry into these markets has to fit into the company’s broader philosophy of adding value to the products we supply the channel. Establishing subsidiaries in these markets is not a challenge from an operational perspective. What’s vital is to have a sustainable business in every country and this is a healthy situation. If we can’t add value to a product or market, there is no point in getting involved in such a set-up. He said one of the key reasons for enjoying steady growth in the KSA has to do with the philosophy of partnering with brands that allow Al-Jammaz Distribution to bring value to the table.

In part, Al-Jammaz Distribution’s dominance in the KSA is founded on the business of advanced technology products, solutions and services in the areas of networking, data and voice communications, PCs, servers, storage, wireless mobility and broadband access. The company is strong in Cisco and EMC, where it has the complete enterprise offering taken to market through the Professional Services business unit.

Al-Jammaz is also strong in Iomega, and it also carries Linksys wireless solutions, Alcatel Mobile Phones, APC’s data centre power management solutions and several others. In addition, the distributor is also looking to leverage its alliances with vendors, while developing and growing its market in the KSA and the region.

“In terms of vendors we are actually building our storage, video conferencing and IP telephony business. We are talking with big players in business apps, back-up and archiving who we believe will fit our aspirations in these technology sectors. We are also building our capabilities in cloud computing and the managed services arena with the aim of piloting our first cloud-based managed services in the first half of 2012,” he said.

AlJammaz said although the managed services business model is still immature in Saudi Arabia and the Middle East, the company has decided to start with trials. He said this should lead the company to come up with a comprehensive business model that will benefit the channel ecosystem. “As we are a channel-centric company, we believe that everything we do should benefit our reseller partners. At the moment we’re still developing and refining our strategy on how best this will profit the channel not only in the KSA, but the region at large,” he said.

AlJammaz said the company’s strategy in the KSA has been to explore opportunities in untapped segments that are unique and not fully developed or commercially mature. “The main issue with managed services at the moment is the lack of a channel business model. The other consideration has to do with the fact that the managed services model in Saudi Arabia is still in its infancy hence we have to be mindful of that fact and come up with a strategy that empowers our channel partners,” he said.

He said the company strongly believes that it needs to start where the market is not yet mature hence it has taken this decision to start with trials. “We are optimistic that our partners will respond positively during the trial phase,” he said.

Al-Jammaz is keen to leverage its existing partnerships with regional system integrators that have solid track records in the Middle East. AlJammaz added that because the company already works closely with the top system integrators in the KSA, that are increasingly active in the Middle East region as well, it is gaining traction and business through them.

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