Hard knocks

Toshiba, which currently works with Avnet, Empa, Expert, Smile and Trinity in the Middle East, will also have to make similar decisions after buying the hard drive business of rival Fujitsu earlier this year. The vendor hasn’t yet revealed what the Fujitsu deal means for its channel strategy in the region, but that is expected to become clear once the acquisition has been finalised in July.

Either way, the company will need to develop a coherent go-to-market plan if it is to take advantage of the benefits that it anticipates from the deal. “Looking at Fujitsu and looking at the channel strategy in the Middle East, we will be the largest small form factor manufacturer in the world of hard disks when we purchase them,” said Philip Walsh, director of sales EMEA at Toshiba.

“A lot has been said about solid state disk overtaking hard disk and we believe it will — in about two decades’ time! But in the medium term the price proposition and capacity points it meets mean hard disks have a relatively healthy future, and the 2.5-inch small form factor is gaining the most traction,” he added.

Toshiba has bolstered its Middle East infrastructure of late by opening a hub in Jebel Ali to cut lead times. “We will work with our customers on the forecasts and park products here on a supply basis, which means it won’t take three or four days’ delivery from Europe when they purchase,” explained Walsh. “We need to be fast to market because the region is exposed quite substantially to market movement on supply and pricing.”

Partner programmes have also emerged as a vital part of a hard drive vendor’s armoury when trying to stimulate channel demand.

HGST has just rolled out its first partner initiative in the region, offering PC assemblers and resellers a range of product and marketing resources to help them penetrate the market. It claims the programme differs from those operated by its rivals because it doesn’t tie partners to targets, but instead requests they commit a certain percentage of their overall business to HGST.

“We have extended this programme to different countries, not just the UAE but Saudi Arabia and Egypt,” explained Khawaja. “Under this programme we can qualify OEMs and VARs, identify the business that they are in and support them on those product lines.”

Samsung and Western Digital also share aspirations to enrich their partner schemes, with the latter planning to fine-tune its SelectWD initiative to educate sales people on the differentiating factors and sell-in features of its products. Saifuddin confirms that this is all part of an approach to develop the overall Middle East channel further. “The priority is to achieve more depth in-country so we will be working closely with our distributors to grow the smaller markets that have a significant number, but had been lacking in terms of focus or some sort of in-country handholding,” he explained.

Seagate, too, is seeking to build on the incentive programmes that its Middle East team have cultivated and launched in the market, taking into account the fact that its Maxtor brand still accounts for more than half of its regional business. Its popular ‘Gold Coin’ reward initiative in Egypt has been repeated in Saudi Arabia, while more recently it launched the Rebate Partner Programme for first tier reseller partners capable of shifting more than 3,000 and 5,000 units per quarter.

“We are investing a lot here and more than 60% of the marketing support budgeted for the Middle East, Turkey and Greece region will be spent in the Middle East,” said Assaf. “The main focus is Saudi Arabia and Egypt — which are the strongest markets in the region and where we are not number one — and to a certain extent Dubai for retail.”

Retail is undoubtedly a sector that ranks highly on every HDD vendor’s agenda due to the uptake of external storage devices sold through the consumer channel. “What we are looking at right now in terms of priorities is retail and how we can expand our presence there,” said Narayan at Samsung. “This is obviously because of the growth that is happening in the external storage market. We are investing in retail and this is something that we will do outside of the UAE as well. We had pretty much done business driven out of the UAE, but we are now going in-country into Kuwait, Qatar, Oman and Bahrain.”

Toshiba is another brand that reckons it has seen excellent results from the retail channel, so much so that it claims its market share for external storage devices in the Middle East already exceeds 20%.

Although the vendor supplies hard drives to companies that resell it under their own brand, such as Jarir in Saudi Arabia, Walsh admits the demand for its products in the retail channel is where it sees the real opportunity for its Middle East business.

“We will work with our partners in what I call the bulk hard disk business in order to serve the B-brand external storage business in the Middle East, but our greatest challenge and focus will be on effective market-building for retail. I think we have to admit that this is the most attractive market place.”

Hard disk drive vendors face a tough job in trying to balance an internal and external storage strategy given the notorious volatility of the market they operate in. Harnessing an effective channel model is central to how successfully they navigate that challenge.

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