The Power List

The 2018 Power List research is designed to provide a more inclusive analysis of the Middle East and North Africa (MENA) largest and most influential IT distribution players.

  • E-Mail
The Power List
More pics ›
By  Manda Banda Published  July 19, 2018

The 2018 Power List research is designed to provide a more inclusive analysis of the Middle East and North Africa (MENA) largest and most influential IT distribution players. This year, the profile of the companies featuring in this all important survey reveals that most of the distributors with an exception for a few companies increased their revenue. Could this be an indication that the regional IT sector is on the mend?

Although the PC sector has continued to witness poor sales for the past 12 consecutive quarters, most PC vendors have been innovating their products and solutions offerings the market.

Despite the dip in PC sales, other sectors of IT like networking, storage, security, servers, managed services, professional services, analytics, big data, IoT and hyperconverged infrastructure have continued to witness growth led by most companies wanting to adopt cloud-based IT models.

Distributors have continued to look at ways of improving their bottom line by complementing their hardware, software and services business with value-led businesses, that help them to provide guidance to the channel base.

Overall, the market in MENA is still tight as the conditions on the ground that led to the challenges that partners are experiencing have not completely been resolved.

Reduced credit insurance cover, prolonged sales cycles, lack of liquidity in the MENA IT industry and the continued erosion of margins are some of the challenges that distributors and their reseller partners have had to deal with over the past 12 to 18 months.

Interestingly, IT distributors in MENA are well aware that it will take much longer for the regional IT market to experience the sort of growth highs it enjoyed at its peak prior to the 2009 global financial crisis.

As is common place with the survey, every distributor featured in the 2018 Power List has been approached by the editorial staff of Channel Middle East magazine, to open their financial accounts and give us their audited revenue figures for the past financial year, in this instance for FY2017.

As was the case in 2017, the Power List 2018 features final audited accounts which all the distributors shared with us. The companies featured over the coming pages collectively made sales of just under $6bn last year a dip of $500m from the total figure in 2017. This is an indication that the It distribution sector remains challenged as the market continues to consolidate with some weaker players merging with big companies or exiting the market.

This year, it’s worth noting that Ingram Micro’s Aptec, which has featured in this research for many years is again absent after it was acquired by Ingram Micro six years ago. As a listed entity, Aptec is bound by stock exchange regulations to report a consolidated global sales figure and as a result, they cannot participate in this regional focused survey.

Distributors that have exited the market since the last research was done in July 2017 include Global Distribution FZE, and Prologix Distribution. Other absentees from this year’s survey include: Jumbo IT Distribution, DESPEC Mera FZE, Mindware FZ LLC, BDL Group, Metra Computer Group and Golden Systems Middle East, which miss out for this year’s research because their audited financials will not be ready in time to make it into this edition of the magazine.

So why have some distributors grown revenues while others saw theirs sales drop? Although business models vary, one thing that resonated for the most part of 2017 is the continued credit squeeze and lack of insurance cover on deals that are funded through the generous credit schemes, with the knock on effects felt throughout other sectors of the IT industry. It’s worth pointing out that distributors with franchises to sell fast moving finished goods from most tier one brands unavoidably tend to be in the lead in reporting huge sales numbers due to the volumes associated with this kind of business.

However, it’s important not to draw too many conclusions from this because those distributors that have value-focused offerings appear to serve fewer accounts but don’t necessarily have a weaker customer base. They tend to work with VARs, systems integrators, managed services providers, ISPs and solution providers for repeat business or generate a high proportion of business from managed and professional services.

Surprisingly, all the distributors featured in this year’s Power List have indicated that value-based selling is critical for their progression going forward and most already have thriving value divisions.

We would like to underscore that revenue is just one indicator of performance and certainly doesn’t suggest that a distributor with a higher sales revenue figure than another is “better” in any way. After all, the Distributor Power List generally excludes many prominent value-focused and niche distributors because the very nature of their business means they simply don’t do the volumes that meet the benchmark needed to warrant a place in the survey.

All those that made the Power List 2018, did more than $100m in revenue in FY2017, so any possible participants need to make this threshold at least. We believe that it is imperative that all data published in these pages is substantiated to the best of our ability. We hope the measures outlined above will contribute towards building a more accurate and transparent IT distribution picture in the MENA, and create a level playing field for each distributor included in the survey.

Editor’s note:

As the Power List seeks to show the largest distributors by scale, we have the responsibility to ensure accuracy and authenticity of any figures we publish. We believe the Power List 2018 contains the largest Dubai- and KSA-based IT distributors operating in the market based on the data available to us at the time of the research. However, we also accept that there may be other IT distributors in the region that qualify for inclusion so if you feel there are any stark omissions then please let us know and we will consider those companies in future. As pointed out six distributors, have missed out this year not because they didn’t merit a place in this year’s Power List, but rather the distributors’ audited financials will not be ready in time to make it into this edition of the magazine. The other two have exited the market. In the pages that follow, Channel Middle East brings you the most powerful distribution players in MEA.

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