Selling storage the simple way

External hard drive and upgradable memory vendor SimpleTech has become a recognised name on retail shelves across the region. Middle East territory manager Payam Dadgar outlines how the Fabrik-owned company intends to take its consumer success into the business channel.

SimpleTech is a Fabrik-owned company. Talk us through the background of that.

In 2007, the consumer division of SimpleTech was purchased for US$43m by an online storage business called Fabrik, managed by ex-Maxtor executives such as Michael Cordano, the CEO and founder. We are one of the only companies doing the entire line of memory products starting from upgradable memory to USB flash drives and external hard drives. We have started to concentrate mainly on upgradable memory and external hard drives, which our executive board members are experts in.

What's Simpletech's commitment to the Middle East?

The Middle East is a growing market and we have been here for quite a few years. We felt that we should be part of the growth and have started to invest more money into the region in terms of marketing, customer support and prices, and we have started to increase market share. We have also started to highlight the fact that we offer higher warranty than our competitors. We saw the trends that were happening in the retail channel and so we began putting a lot more focus on retail. There seems to have been plenty of change in your distribution channel in recent months what with the appointments of eSys and Empa.

We were working with many distributors in an unorganised way so there was a lot of price competition, which we wanted to avoid. So we looked at which distributors were doing well and which ones we'd like to support even more. In memory for example, we saw that Concentration Computers (CC) was doing an amazing job.

We wanted to support them more so we kind of looked at them as a master distributor for memory, supplying other accounts in order to grow the channel. On the hard drive side we also work with CC, which we have been with for almost six years, but at the same time we have signed up eSys too. We also have some smaller distributors in other regions which we supply to directly such as Computek in Lebanon.

What are your main plans for the year in this region?

I think the main plan is the launch of a new hard drive called the Pro line, which is a corporate product. We have managed to establish our consumer product which is the Pininfarina hard drive, but at the same time we don't want to neglect the corporate sector. As soon as I started this job, one of my other main targets was to increase the branded memory business here in the region.

While we have done very well on the consumer products with the generic memory and the value memory for the consumer hardware, we have not really managed to establish the branded memory. But now that we are launching a new line of products which is corporate-based it is important for us to establish the corporate channel as well.

Should resellers in the Middle East expect to earn more attractive margins from selling your corporate storage products then?

If we talk about corporate products, especially the branded memory which not many companies manufacture, we can expect much higher margins for the vendor, distributor and reseller. It is a much more profitable business because corporate companies are willing to pay more money than consumers. At the same time, the distributors would also expect higher margins for the hard drives.

cme: What would a typical margin be for the corporate products?

I would suggest that in the branded memory we could discuss margins of around 10% for a reseller. And for the external hard drives we would also expect 10% although to be honest these are now just being launched so we'd have to look into it more.

Corporate firms have a lot to worry about when it comes to IT. Are external hard drives really going to feature highly on their agenda?

In terms of our Pro line, we would rather target small to medium-sized businesses. If we talk about small we mean around 10 to 15 employees attached to the network who could have all their files stored on the hard drive with ‘Fabrik Ultimate Back-up' for offsite protection. We believe that information is the biggest asset of small businesses, so to keep this information safe, stored and available at all times should be a priority for these companies.