By Andrew Seymour
Few companies do true value-added distribution properly, but Dubai-based Minerva has successfully carved out a niche in the mobile broadband and telecommunications sector. Minerva chairman, Leo Psara, outlines the position of the VAD model in the context of the Middle East market today.
Few companies do true value-added distribution properly, but Dubai-based Minerva has successfully carved out a niche in the mobile broadband and telecommunications sector. Minerva chairman, Leo Psara, outlines the position of the VAD model in the context of the Middle East market today.What is Minerva’s value-added proposition in the Middle East market?
We are focused on making sure that our partners are fully trained on the services and products that we offer them and that they are able to support those in the market place. So we are actually end-user focused in terms of ensuring our partners are trained from a sales and technical perspective to install and deliver solutions, as well as ensuring the products we represent live up to their standards and positions in the market. That is our value added proposition and we do that through regular training seminars, roadshows with our partners and end-user customer visits. We are a clean and professional company to do business with, which I think is really important, particularly when times get a little bit hard as they are now. You are currently in the process of re-evaluating your channel. What does that entail?
It is about making sure we have the right channel in place to support the products, adding channel to our product offering and our portfolio, and ensuring that the whole process becomes more seamless for the end-user. It is important that the end-user has an overall positive experience of doing business with us, our products and our partners.
How often do you do that?
On a relatively regular basis — it is certainly a yearly activity. We do a lot of analysis of buying trends and market trends. Sometimes when you add new products to the portfolio they won’t necessarily fit into the existing channel so either you re-educate them, realign them to sell new products or you step back a little bit and add new channel to the business. That is what we are doing right now with the Motorola two-way radio business, for example.
What is the channel situation with that business then?
It is not directly a traditional mobile broadband or general IT integrator-type business because it is pretty specialised. However, technology changes have meant two-way radios are digital and running on IP backbones, much the same way as the telephone business went a few years ago when it moved to an IP-type base. The resellers selling those products have gone from a group of very focused, specialised telephony integrators to a broader portfolio of channel partners. That is happening with the two-way radio business and it is helping us expand our reach into the market, add different channels and re-educate our existing channel to evaluate the two-way radio business, which is really a new offering for them.
How many partners does Minerva work within the region?Off the top of my head, we have 300 or 350 active partners across the region and the definition of that is they buy every quarter or every couple of months. We also have other project-type partners across the region that are not necessarily integrators but they incorporate and encompass the product offerings on a project-by-project basis, which pushes the numbers up further. Do you think that true value added distribution has become undervalued in the Middle East?Yes, I think it has. The channel has always expected a lot from its distribution houses. Distributors have been expected to give more for less so the value added proposition is harder to drive through the channel, but once it is received it is received pretty well. Once a reseller experiences quality value distribution then they will pay a little bit more for that service if they need to. The model is constantly evolving. We just keep our eye on it to make sure that we are correctly aligned and stay ahead of the curve.
How would you assess the health of the distribution market given the economic crisis?
The pain hasn’t completely gone out of the market yet, but I think the distribution houses are being extremely careful in how they do business, which is not a bad thing. We have always been careful, both in our selection of channel and in our credit facilities and financing. We have always been focused on doing business with the right people and making sure that we get paid in a timely manner, which is really quite important for the sales cycle.
Do you expect to see any consolidation in the sector?
I think some companies are more aggressive with getting revenue at any cost and some may find themselves strapped for cash, which leads to consolidation and change. I think there is a chance of that happening in the value added distribution position, absolutely.