Klaas de Vos, VP Europe, Middle East and Africa (EMEA) at hard drive giant Western Digital, reckons that the proposed merger between Seagate and Maxtor will result in systems builders and global OEMs reassessing their sourcing options — a move that could play into Western Digital’s hands.
Speaking during a weeklong tour of the Middle East, de Vos explained the potential that existed for Western Digital to grab even greater market share in the hard drive space. “I think that a lot of assemblers will not want to put all their eggs in one basket,” he said. “You certainly see that with the global players such as Dell and HP.”
“If they previously divided their business evenly between Western Digital, Seagate and Maxtor, now they could suddenly run into a situation where more than 60% of their hard drives are from one vendor: a combined Seagate-Maxtor. They don’t want that and automatically there is an expectation that some of that business will come our way,” he added.
While the fear, uncertainty and doubt that exists in the channel regarding the Seagate-Maxtor deal is undoubtedly working in Western Digital’s favour to a degree, de Vos and his team remain wholly focused on fine-tuning and improving their own business practices in the Middle East.
“There is much more for us to do in the region,” added de Vos. “I think we still have not localised enough in the region and there is more potential in markets such as Lebanon, Jordan, Kuwait and Bahrain. I still think that we do too much out of the UAE at times.”
Western Digital plans to sign up even more in-country distributors during 2006 to complement the activities of its existing regional partners. The development of in-country distribution agreements will also play a pivotal role in allowing Western Digital to build up its reseller breadth even further in the Middle East.
“We consider Turkey as part of the Middle East region and there you have approximately 7,000 potential resellers,” continued de Vos. “It is an unbelievable number. I was in Egypt earlier this week and there must be close to 1,000 resellers there. We don’t see 1,000 resellers in the sales out data we get from distributors because there is still a big sub-distribution role in the market. Egypt is just not ready yet for single layer distribution, but it will be eventually.”
According to de Vos, a solid pricing strategy can ensure that channel conflict between regional and in-country distribution partners is kept to an absolute minimum. Western Digital will also look to extend its channel programmes in the region.
“We will strengthen our SelectWD partner programme and will have more roadshows. For example, we’ve already visited all the ‘A’ cities in Saudi Arabia, now we need to visit the ‘B’ cities as well,” he added.
Western Digital is also pulling out all the stops to educate the channel where appropriate. At present the company is witnessing a 4% return rate of its hard drives in Egypt compared to a global figure of just 1.3%. This suggests that resellers and integrators in Egypt are mishandling the product. To combat this problem, Western Digital is designing posters highlighting best practice for handling hard drives, is looking at innovative packaging options and will also supply anti-static mats and anti-static wristbands to system builders.
At present, the Middle East and Africa market accounts for approximately one sixth of Western Digital’s total sales through the distribution channel in EMEA. That figure is growing fast and with significant expansion planned for both North Africa and Turkey in 2006, de Vos is convinced that 2006 will deliver strong results in the region.
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