It is an understatement to say this year has been like no other, as companies strived to enable a fast Digital Transformation, due to the impact of the COVID-19 pandemic. Leading Value Added Distributor, Mindware, was ready to help its partners and make sure the suitable resources – from its wide portfolio of vendors – were moved to the areas that needed it the most. Philippe Jarre, CEO of Mindware, explains how the company has supported its partners during this challenging year and the focus for the year ahead. He also explains how the channel market in the Middle East has reacted to the pandemic.
Talk us through the state of the channel market in the Middle East at the moment.
Life and business have been badly hurt by the pandemic. However, we have been very fortunate in the IT industry to see that COVID-19 has actually accelerated Digital Transformation initiatives and technology investments, as enterprises have geared up to support a hybrid work environment. As a result, the IT industry in the Middle East has been less hurt, I would say, from a gross revenue point of view.
The technology areas that our clients have been focusing on as part of their efforts to enable remote working include collaboration tools, network security, cloud computing, application delivery networking and, very importantly, data backup and recovery. We have been helping our partners to move into these directions so that they remain relevant and not just exist, but thrive in these extraordinary market conditions.
The second aspect, which is extremely important as well is that the reseller community has been facing tremendous pressure in terms of financials. Within the channel, which includes thousands of small and medium businesses, we strive to support them and safeguard their survival, because managing cash flow during this pandemic has been particularly challenging. A big part of the distributor’s role is to interface with vendors, assist them in understanding these challenges and receive the best possible terms to be carried down to its resellers and contribute to their financial stability.
I would say that the financial aspect of doing business this year has been rather difficult and, as we see it, this is not going to change any time soon. I don’t think that the banks and financial institutions and insurance companies will be willing to take too much risk over the next 12 months. Therefore, we are going to operate in the more conservative ‘wait and watch’ mode.
What has Mindware’s focus been in 2020 and how has the company navigated the COVID-19 pandemic?
From an offerings point of view, we carry an extensive portfolio of vendors – from printers and laptops to data and analytics, IoT, infrastructure, security and cloud solutions. Accordingly, we have been able to adapt and realign our resources and efforts based on the current priorities of regional CIOs and IT managers, where Digital Transformation features high on their agenda.
We have been working very closely with numerous key vendors and partners to enable this transformation. For example, we have been working with Microsoft to help all the educational institutions in the region, deploy the ‘Teams’ video conferencing solution to enable students and teaching staff to work and collaborate in a hybrid classroom environment.
Something we have also been witnessing is the high demand for laptops, induced by the work from home model. Admittedly, we did observe some supply issues initially, due to the sudden spike in demand. Nevertheless, we managed to get this sorted out fairly quickly and we are on track to service the market requirements.
What has Mindware been telling its partners to focus on during this year?
The key word is ‘focus’. One needs to be laser-focused on the right technologies as well as the industries that are going to continue investing. The airline and tourism industries, for example, have delayed all projects and are not expected to invest in the short-term. Banks, and institutions in other sectors, including government and education, have shifted investments from other projects into Digital Transformation initiatives.
We are next to our partners, providing them with the right technology solutions, knowledge transfer and financial backing. Our aim is for our clients to quickly respond to the regional technology needs and to capitalise on all emerging opportunities. I didn’t see too much damage to the market in 2020, which is quite encouraging.
Mindware has been ramping up its channel activities and onboarding new vendors. Could you briefly outline your approach when signing up new IT vendors?
I joined Mindware in January 2019 and at the time, we performed an assessment of our portfolio. We then compared this to forecasts of the transformation of the IT market for the next five years. We quickly realised that our revenue mix was highly skewed in favour of products that were quite profitable, but were likely going to die out in the next five years or so. Revenue from new technologies, in terms of percentage, was not adequate enough.
We created a transformation plan for the next five years. We started in early 2019 to make sure that we invest much more on technology solutions which have high current and future demand, and which are profitable. So, it’s about security, it’s about AI, it’s about automation, it’s about cloud transformation and IoT. One of the first actions we took was the acquisition of Arrow Electronics’ enterprise computing solutions business in the Middle East, which added a lot of capabilities in the security domain.
And then we revamped our strategy to acquire a lot of vendors in the following months – best of breed solution vendors with transformative technologies. We are moving to the next generation of products and solutions to ensure that Mindware is transforming at the same pace as the market.
Looking ahead, what will Mindware be focused on in 2021 and how are you preparing your partners for the year ahead?
I don’t think things are going to change very quickly. I have been in the IT industry for a long time and what I have noticed is that people, most of the time, are looking in one direction – e.g. ‘What am I going to do in the next six months?’ At Mindware, we prefer preparing for the short-term, as well as the mid-term. We are looking at what could happen in 2022, in 2023 and even beyond, and we constantly attempt to discover which actions could be accelerated today if things do not get any better tomorrow.
I believe that the pace of recovery in the Middle East could be far quicker than other countries, in Europe or the US. Our strategy is to work with relevant content, financial plans and marketing activities and be ready to launch by mid-2021 – which could then be accelerated into 2022. This would not only help us gain mindshare and market share in 2021 but also create a solid launchpad for our business in 2022 when the market is expected to be on the upswing.