Philippe Jarre shares how Mindware Group has digitally transformed its value-added distribution structure and traditional business model to remain relevant for channel partners and end customers.
The traditional responsibilities of IT distributors are changing rapidly. Digital transformation is becoming a key driver of growth in the industry. Businesses are increasingly turning to digital technologies to streamline operations, improve customer experience, and gain a competitive advantage. As a result, IT distributors will need to offer a wide range of digital solutions to help their customers navigate this transformation. The emphasis must shift towards supporting the technology that underpins this transformation: cloud computing, security, IoT and data analytics.
The cost of capital continues to rise and is foreseen as a primary challenge in the year ahead. The past 12 months has seen a sharp increase in interest rates, rising from few percentage points to nearly 10% in this market. This is putting pressure on distributors to support their partners to be able to manage their cash flow in a very cash intensive business. With financing cost and the nature of technology distribution industry being very price sensitive, we will see a consolidation of players in the market.
Players in the industry, who have the financial stability and easy access to cost-effective capital, may have a strong interest in acquiring small distributors that are experiencing high financial costs and low return on capital employed. With their financial resources, larger players can leverage economies of scale and synergies to enhance their profitability and gain a competitive edge in the market. Furthermore, through acquisitions, distributors can expand their geographic footprint and customer base, as well as gain access to new products and services.
Skills shortage is a key challenge being faced in the region today by both vendors and distributors. VADs require highly skilled professionals with deep knowledge and expertise to provide the best solutions to its partners and customers. As technology evolves and becomes more complex, the demand for highly skilled professionals in the IT industry has increased, making it more difficult to find and retain top talent.
At Mindware, we have already taken the first step in acknowledging and addressing this gap in the region. Mindware is investing in these areas and are constantly upskilling to stay as market leaders and help its partners to succeed in the ever-changing technology landscape.
With financing cost and the nature of technology distribution being price sensitive, we will see a consolidation of players in the market.
Mindware’s digital transformation
The IT industry has made a big leap towards digital transformation which was essential during the pandemic, and since then it has evolved at a brisk rate.
Most businesses have transformed into cloud, public and private hosting, SaaS, AI, VR and AR. The portion of traditional distribution is getting smaller every day, and the need for high-tech distribution, with online channels such as marketplace, ecommerce, online services, and remote assistance is growing day by day.
Few years back Mindware studied the market landscape and trends and realised a potential for eCommerce platform. The idea was to reach a customer base outside of the traditional region and to reach all decision makers within the organisation. An e-commerce platform automates the entire purchasing process, from order processing to inventory management. IT distributors who do not have an online presence may find it challenging to remain competitive. By launching Mindware’s e-commerce platform, customers have the purchasing options they expect while staying ahead of the curve.
Mindware is focused on providing improved customer experience and digital transformation by enabling self-service options, real time updates and enhanced communication channel. Digital transformation has helped Mindware to be more agile and respond quickly to market changes and new customer demands. With automated process and real time data, Mindware can make informed decisions and help partners to adopt the same business strategy.
Mindware is leading the change in digital transformation with the Mindware Cloud marketplace, automation tools, supply chain capabilities, and as-a-service education portals. The emergence of online marketplaces presents both a significant opportunity and a challenge for the entire channel ecosystem. More vendors are offering their solutions on their own digital storefronts, while also leveraging distributors’ marketplaces.
This increases their reach, gains access to new routes to market, and ensures that the channel adapts to the evolving needs of vendors.
Mindware saw this as an opportunity to fill the gaps with resellers to assist them in navigating complex XaaS licensing models and simplify their purchase process. Mindware has launched its marketplace few years back. Mindware’s marketplace offers its partners a range of aggregated cloud solutions from hyperscalers, private cloud providers, and ISVs, in addition to its cloud professional and support services.
This approach helps partners and their clients with their cloud transformation journey and enables them to cross-sell and upsell. The marketplace provides a smooth user experience, and the platform’s API integrations automate the subscription and consumption management required for high-volume cloud and XaaS business.
With financial resources, larger players can leverage economies of scale to enhance profitability and gain a competitive edge in the market.
Macro-economic challenges
With recent economic changes and challenges, as well as addition of many dynamics to the global trading and commerce industry, Mindware can play a pivotal role in supporting and facilitating digital transformation across geographies in general and emerging countries in specific.
Mindware provides financial capabilities in a financially challenging world today. Its legal presence in most Middle East and African countries, as well as warehouses in a dozen countries across the region, enabling it to offer faster delivery and an efficient supply chain.
Mindware’s services focus on enabling partners rather than competing with them and offers technical expertise in tailoring solutions for partners and customers. Technical services include pre-sales support such as consultation, implementation, integration, and training, which help its partners and resellers identify and deploy the right solutions to their clients.
Mindware also offers post-sales services such as managed services and cloud services, which provide support and maintenance to ensure solutions meet clients’ needs over time.
Mindware offers services in emerging areas such as AI, IoT, DevOps, and security, providing the necessary support and expertise to help its customers stay ahead of the curve and achieve their business goals. Mindware is committed to delivering the highest level of service and support, and to being a true partner to customers in the region and beyond.
The portion of traditional distribution is getting smaller every day, and the need for high-tech distribution, is growing day by day.
Mindware Academy was launched in 2022, which is an internship programme that aims to develop technical skills and invest and train students in real world scenarios with practical experience, enabling them to prepare for future jobs in the industry. There is a skills gap in the region, and this programme aims to bridge that gap by providing young talent with the opportunity to gain valuable hands-on experience. Apart from developing new talent, it is equally important to retain top talent.
Mindware is a global IT distributor that combines the best of both worlds with global best practices tailored to the region’s individualities. Mindware offers a portfolio of 50+ vendors covering an array of technology verticals such as security, infrastructure, and networking. The services division has 40 solution and pre-sales consultants and focuses on enabling partners. Mindware has a strong financial position that enables it to finance the most complex deals.
I share the journey of our own company as an example of how the market is changing and how value-added distributors need to adapt to stay ahead of the curve.