The 2018 Power List research is designed to provide a more inclusive analysis of the Middle East and North Africa (MENA) largest and most influential IT distribution players. This year, the profile of the companies featuring in this all important survey reveals that most of the distributors with an exception for a few companies increased their revenue. Could this be an indication that the regional IT sector is on the mend?
Although the PC sector has continued to witness poor sales for the past 12 consecutive quarters, most PC vendors have been innovating their products and solutions offerings the market.
Despite the dip in PC sales, other sectors of IT like networking, storage, security, servers, managed services, professional services, analytics, big data, IoT and hyperconverged infrastructure have continued to witness growth led by most companies wanting to adopt cloud-based IT models.
Distributors have continued to look at ways of improving their bottom line by complementing their hardware, software and services business with value-led businesses, that help them to provide guidance to the channel base.
Overall, the market in MENA is still tight as the conditions on the ground that led to the challenges that partners are experiencing have not completely been resolved.
Reduced credit insurance cover, prolonged sales cycles, lack of liquidity in the MENA IT industry and the continued erosion of margins are some of the challenges that distributors and their reseller partners have had to deal with over the past 12 to 18 months.
Interestingly, IT distributors in MENA are well aware that it will take much longer for the regional IT market to experience the sort of growth highs it enjoyed at its peak prior to the 2009 global financial crisis.
As is common place with the survey, every distributor featured in the 2018 Power List has been approached by the editorial staff of Channel Middle East magazine, to open their financial accounts and give us their audited revenue figures for the past financial year, in this instance for FY2017.
As was the case in 2017, the Power List 2018 features final audited accounts which all the distributors shared with us. The companies featured over the coming pages collectively made sales of just under $6bn last year a dip of $500m from the total figure in 2017. This is an indication that the It distribution sector remains challenged as the market continues to consolidate with some weaker players merging with big companies or exiting the market.
This year, it’s worth noting that Ingram Micro’s Aptec, which has featured in this research for many years is again absent after it was acquired by Ingram Micro six years ago. As a listed entity, Aptec is bound by stock exchange regulations to report a consolidated global sales figure and as a result, they cannot participate in this regional focused survey.
Distributors that have exited the market since the last research was done in July 2017 include Global Distribution FZE, and Prologix Distribution. Other absentees from this year’s survey include: Jumbo IT Distribution, DESPEC Mera FZE, Mindware FZ LLC, BDL Group, Metra Computer Group and Golden Systems Middle East, which miss out for this year’s research because their audited financials will not be ready in time to make it into this edition of the magazine.
So why have some distributors grown revenues while others saw theirs sales drop? Although business models vary, one thing that resonated for the most part of 2017 is the continued credit squeeze and lack of insurance cover on deals that are funded through the generous credit schemes, with the knock on effects felt throughout other sectors of the IT industry. It’s worth pointing out that distributors with franchises to sell fast moving finished goods from most tier one brands unavoidably tend to be in the lead in reporting huge sales numbers due to the volumes associated with this kind of business.
However, it’s important not to draw too many conclusions from this because those distributors that have value-focused offerings appear to serve fewer accounts but don’t necessarily have a weaker customer base. They tend to work with VARs, systems integrators, managed services providers, ISPs and solution providers for repeat business or generate a high proportion of business from managed and professional services.
Surprisingly, all the distributors featured in this year’s Power List have indicated that value-based selling is critical for their progression going forward and most already have thriving value divisions.
We would like to underscore that revenue is just one indicator of performance and certainly doesn’t suggest that a distributor with a higher sales revenue figure than another is “better” in any way. After all, the Distributor Power List generally excludes many prominent value-focused and niche distributors because the very nature of their business means they simply don’t do the volumes that meet the benchmark needed to warrant a place in the survey.
All those that made the Power List 2018, did more than $100m in revenue in FY2017, so any possible participants need to make this threshold at least. We believe that it is imperative that all data published in these pages is substantiated to the best of our ability. We hope the measures outlined above will contribute towards building a more accurate and transparent IT distribution picture in the MENA, and create a level playing field for each distributor included in the survey.
Editor’s note:
As the Power List seeks to show the largest distributors by scale, we have the responsibility to ensure accuracy and authenticity of any figures we publish. We believe the Power List 2018 contains the largest Dubai- and KSA-based IT distributors operating in the market based on the data available to us at the time of the research. However, we also accept that there may be other IT distributors in the region that qualify for inclusion so if you feel there are any stark omissions then please let us know and we will consider those companies in future. As pointed out six distributors, have missed out this year not because they didn’t merit a place in this year’s Power List, but rather the distributors’ audited financials will not be ready in time to make it into this edition of the magazine. The other two have exited the market. In the pages that follow, Channel Middle East brings you the most powerful distribution players in MEA.
10. Trigon LLC
Arun Chawla, CEO
Verdict
While the overall sales figure that Trigon has posted this year dropped, the company has continued to strengthen its retail and B2B offerings. The distributor has continued to focus on profitability and improving its gross profit margins.
What were the company’s milestones in 2017?
Last year we spent more focus on the retail business and expanded our retail related product line. In addition, we also paid attention to our B2B offerings. We also expanded products related to the healthcare, hospitality and financial sector.
What are your plans for 2018?
This year we have opened our sales office in Oman in May. We continue to support and remain loyal to all our partners to build quality business.
What were the main revenue drivers last year?
The retail and B2B divisions contributed most for the revenue growth both in terms of top and bottom line.
What is the biggest challenge facing the regional channel?
Profitability and improving gross margins remains the biggest challenges for the market. In addition to these, cash flow and credit control management have remained thorny in the channel.
What will drive growth?
Few of our key vendors are focussing on the B2B segment and are putting a strong emphasis on growing the solution business. Trigon would like to leverage this situation and focus more on the value-added business.
Tel: +9714 342 6060
Headcount: 350
Website: www.trigononline.com
Regional offices: UAE, Bahrain, KSA, Oman
Auditor: KPMG
Key brands: Samsung, LG, Canon, Brother, D-Link, Netgear, Creative, ViewSonic, IRIS, PNY, Philips, AOC, Elo Touch, Ergotron, Transcend, PenPower, Mustek, Plustek, AVM, Port
Ownership: Trigon is an Al Ghurair Group company & part of Abdulraham Saif Al Ghurair Investments.
2017 sales: $125m
09. Gulf Shadows Computer Systems
Eng. Eyas Shoman, CEO
Verdict
Gulf Shadows’ figure has dropped by $12.2m, highlighting the challenging market conditions that most distributors have had to operate under in 2017. Despite this, the distributor has continued to change its business model as it looks to diversify its offerings.
What were the company’s milestones in 2017?
Last year we focused more on brands we got in 2016 like Asus for KSA and Egypt, and started supplying value products such as Fujitsu, Plustek and Asustor to small and medium size projects.
What are your plans for 2018?
Our plan this year is to focus more on the brands and vendors we already have as we are aiming to expand the channels for these brands and to develop our value business. In addition, we are getting more exposure into the retail channels for gaming products.
What were the main revenue drivers last year?
Our revenue dropped a little in 2017 because we were conservative in terms of the credit limits we were setting for our valued partners due to the risk in the market.
What is the biggest challenge facing the regional channel?
I believe the low demand of mining products this year and the stable supply from the vendors’ side will lead both vendors and distributors to decrease their margin.
What will drive growth?
We will put more efforts on supplying projects, investing in our current experienced people and expanding in more regions. We expect new products from NVIDIA in Q4 2018 to increase demand from gaming sector.
Tel: +971 43574770
Headcount: 150
Website: www.gulfshadows.ae
Active accounts: 1,700
Regional offices: UAE, Egypt, Jordan, Tajikstan
Auditor: Awni Farsakh & Co
Key brands: Samsung, Micron, Asus, Sapphire, Galax, Team, Asustor, Fujitsu, Netis, Fractal Design, FSP, Inno3D, Gamdias, BitFenix
Ownership: Privately held.
2017 sales: $131.8m
08. Al Jammaz Distribution
Asim Al Jammaz, President
Verdict
Al-Jammaz has seen its revenue increase this year by $6m, an indication perhaps that the distie is on the right track. The KSA-based distributor is focusing on helping partners with channel enablement programmes aimed at empowering them to develop domain expertiise in the cloud computing, value and solutions space.
What were the company’s milestones in 2017?
As a VAD player in the GCC market our main focus was developing the channel by inspiring, enabling and empowering them.
What are your plans for 2018?
Our aim is to develop a strong sales channel and an IT pro-community that’s tightly connected to our product marketing initiatives.
What were the main revenue drivers last year?
The next-generation data centres, hyper-converged/ private and public cloud business contributed immensely to our growth.
What are the challenges facing the Middle East channel?
Quality and quantity of qualified resources, increase of business operational costs and longer payments cycles from end user customers.
What will drive growth?
We are seeing the corporate sector and enterprises investing more in cyber security, storage and data centres.
Tel: +966 1 1476 8811
Headcount: 239
Website: www.al-jammaz.com
Active accounts: 1,000
Regional offices: Riyadh, Dubai, Jeddah, Khobar
Auditor: KPMG
Key brands: Cisco, DELL EMC, APC, Veritas, STC Business, Panduit, Commscope, Linksys, Alibaba Cloud, Lenovo, Fluke Network, Ruckus Wireless, NEC, Rittal, Tenable network, Nexthink, Netscout, Ring.
Ownership: A subsidiary of AlJammaz Technology Investment Group.
2017 sales: $177m
07. Asbis Middle East
Hesham Tantawi, Vice President
Verdict
In a year that saw Asbis consolidate its operations to position itself for growth, the company has seen revenue grow by $16m. The distie wants to grow its value-added solutions business and services portfolio as it readies itself to become a dominamt player in the IP surveillance and unified communications and security space.
What were the company’s milestones in 2017?
Last year we grew our Value Solutions business by adding new brands to this growing business within the group. We also became a master distie for Logitech in the Middle East.
What are your plans for 2018?
Our focus for the rest of the year is to have strong vertical domain expertise, cement our alliances with vendors in those chosen verticals and to forge closer partnership with end user customers in those industries.
What were the main revenue drivers last year?
Our strategy to consolidate our vendor brands and business by focusing more on high value solution offering be it in the components, storage, networking, security and UC contributed immensely to our revenue growth in 2017.
What are the challenges facing the Middle East channel?
The biggest issue partners are facing right now is there reluctance to develop local markets even when they can see that margins on pure hardware sales continue to be eroded.
What will drive growth?
By far our VAD offerings and the entire solutions portfolio and services built around this business will push growth up.
Tel: +971 4 886 3850
Headcount: 62
Website: www.asbisme.ae
Active accounts: 36,500
Regional offices: UAE Egypt, Algeria, Tunisia
Auditor: KPMG
Key brands: Seagate, WD, Intel, AMD, Kingston, Toshiba, Supermicro, Netgear, ESET, Grandstream, AVG, TP-Link, Ubiquiti, MicroTik, Tripp-Lite, Lexmark, OKI, Prestigio
Ownership: Owned by ASBISC Enterprises PLC.
2017 sales: $196m
06. Starlink
Nidal Othman, Managing Director
Verdict
StarLink’s sales revenue grew in 2017 by $60m, thanks to the value-added distributor’s continued solutions diversfication. The distie has focused on expanding its operation by increasing presence in key regions including Europe, Africa and North America.
What were the company’s milestones in 2017?
We focused on data centre and cloud solutions, entered the network infrastructure space, developed the US and UK markets and local resources into key African countries.
What are your plans for 2018?
This year, we are keen on increasing the company’s services portfolio and revenue growth. We will achieve this by adding new strategic vendors to the portfolio and are hoping to open offices in Germany, France and Kenya.
What were the main revenue drivers last year?
Our growth in 2018 came about because of the accelerated pipeline development and a number of transactions to counter the effects of the geopolitical landscape.
What is the biggest challenge facing the regional channel?
One of the biggest challenges is trying to look ahead and predict where the industry is going. The more time taken to make key decisions means missed opportunities.
What will drive growth?
Focusing on increased profitability through service offerings, enhancing communication and creating incremental value. In addition we are exploring regional expansion plans.
Tel: +971 4 279 4000
Headcount: 300
Website: www.starlinkme.net
Active Accounts: 1,100
Regional Office: UAE, USA, UK, KSA, Kuwait, South Africa, Egypt, Oman, Bahrain, Nigeria, Morocco, Netherlands, Jordan
Auditors: KPMG
Key Brands: Over 40 key vendor brands
Ownership: Privately Held.
2017 sales: $210m
05. Westcon ME Group
Steve Lockie, Group MD
Verdict
Westcon has over the past three years continued to report solid sales numbers. For FY 2017 the specialist value solutions distributor grew its revenue by $9.8m and has been cementing its services business in key verticals. All these initiatives have contributed to the impressive showing in these challenging times.
What were the company’s milestones in 2018?
We had a huge investment and built new foundations for growth in a consolidated supply chain for the region.
What are your plans for 2018?
We want to enable our partners to grow their business profitably with a world-class array of products, services and cloud solutions that address their needs.
What were the main revenue drivers last year?
Overall we saw an increase in sales, despite the challenges in the market. The ERP implementation in 2016 and supply chain streamlining improved efficiencies. We also managed significant growth in annuities, services and our security practices.
What are biggest challenges facing the Middle East channel?
The liquidity and cash crunch in the market has a major impact on partner business but we continue to innovate to bring financing solutions to the Middle East channel market.
What will drive growth?
We expect to see solid growth across the board, Comstor is well positioned to capitalise on the infrastructure and security projects that are being rolled out across various verticals.
Tel: +971 4 8839888
Headcount: 175
Website: www.westconcomstor.com
Active accounts: 5,000
Regional offices: UAE, KSA
Auditor: Deloitte & Touche
Key brands: APC, Arbor, Avaya, Brocade, Carbon Black, Ciena, Cisco, Datalogic, Extreme, F5, Firemon, Flexpod, Forescout, HP Enterprise, Jabra, Juniper, NEC, Palo Alto, Panduit, Pelco, Plantronics, Polycom, Pulse Secure, Ruckus, Simplivity, SMART, Sonicwall,, Sonus, Symantec, VCE, Zebra
Ownership: Owned by Datatec.
2017 sales: $231.7m
04. FDC international
Marissa Safe, COO/VP
Verdict
FDC’s sales revenue dropped by $116m over the $386m figure it declared last year. This is a sign perhaps that the strategy the company has embarked on to transition to a more value-centric business model as opposed to the volume, low margin business is yet to start yielding positive results on sales. Aside from that, the distie has continued to grow its Enterprise division.
What were the company’s milestones in 2017?
We managed to post growth in GCC and Levant and we were able to reach new customers and brands for enterprise. In addition, we added brands for the Enterprise division and high margin products.
What are your plans for 2018?
We are aiming to bring about major positive changes in terms of the overall profitability of the business and have better ROI by implementing new strategies going forward.
What were the main revenue drivers last year?
Although our revenue didn’t grow in 2017, we grew the customer base and Enterprise division, something we have been focusing on in that last three years as we transition to a value-centric business model.
What are challenges facing the Middle East channel?
The multi distribution scenario, low profitability and financial instability across the region, pose the huge threats to the survival of most channel stakeholders.
What will drive growth?
The increased breadth of our customer base and the addition of new brands and regions to the existing product line will push our business up as we continue our journey on the value solutions path.
Tel: +971 4 8703330
Headcount: 150
Website: www.fdchq.com
Active accounts: 1,000
Regional offices: UAE, Algeria, Bahrain, Iraq, Jordan, KSA, Kuwait
Auditor: Puthran Chartered Accountant
Key brands: Acer, Asus, Cyber Roam, GEIL, Lenovo, Seagate, Sophos, Synology, TP-Link, WD, XFX
Ownership: Privately Held.
2017 sales: $270m
3. Almasa IT Distribution
Medhi Amjad, Executive Chairman
Verdict
Almasa has seen its revenue grow by $11m over the 2015 sales number it declared in last year’s Power List survey. The company has continued to adopt a conservative business approach to overcome the market and economic challenges currently being faced by the regional channel.
What were the company’s milestones in 2017?
In challenging times with low consumer demand and lower revenue, Almasa maintained its strong financial performance with a healthy operating margin.
What are your plans for 2018?
Our strategic plan for 2018 is primarily based on a continued focus on credit risk, margins, costs and the bottom line. We will also be positioning ourselves for the future, by signing new strategic vendors and expanding our geographic reach.
What were the main revenue drivers last year?
Given the soft consumer demand, limited credited insurance and poor liquidity in the market at present, the emphasis last year was on the quality of business and maintaining revenues with our core customers. This resulted in lower revenue overall, but we maintained healthy margins and the bottom line.
What is the biggest challenge facing the Middle East channel?
The cash and credit crunch continues to be the biggest challenge. Credit risk and collection delays continue to have a major impact on the the channel business.
What will drive growth?
As the market continues to be challenging in 2018 with low consumer demand and credit concerns, our main focus will be on credit risk and the quality of business rather than revenue growth.
Tel: +971 4 306 3100
Headcount: 131
Website: www.almasa.com
Active accounts: 1,000
Regional offices: UAE, KSA, Kuwait, Iraq
Auditor: Deloitte & Touche
Key brands: Asus, Avaya, Apple, Lenovo, Seagate, LG, MSI, Western Digital, HP & Intel
Ownership: Privately Held.
2017 sales: $303m
02. Logicom Group ME
Spiros Rafailovits, General Manager
Verdict
In a year that saw Logicom launch its Cloud Marketplace for the regional channel partners, the distributor has posted an impressive sales figure having grown revenue for FY17 by $45m over the $690m number it reported in 2016. The distributor has continued to invest in initiatives that promote its cloud offerings and has rolled out several programmes to on board cloud partners.
What were the company’s milestones in 2017?
Last year was a year of growth but also of significant investments for Logicom. Although growth was in the range of 5%, given the difficult economic climate we were able to see substantial market share growth for most of our brands.
What are your plans for 2018?
We aim to acquire brands that will complement our current portfolio and expand into new markets. We also want to establish Logicom as a cloud solution provider.
What were the main revenue drivers last year?
Solid execution across key parts of our business, especially around client and networking infrastructure in the Commercial Segment. Growth was also derived from our software business.
What are the challenges facing the Middle East channel?
The political and economic instability in the region has impacted public sector spending which has in turn negatively impacted investments in all sectors of the regional economy.
What will drive growth?
Providing a reliable, predictable and continuously evolving go to market is key to Logicom’s continuing leadership and growth.
Tel: +971 4 8055399
Headcount: 350
Website: www.logicom.net
Active accounts: 3,000
Regional offices: UAE, Kuwait, Qatar, Bahrain, Oman, Saudi Arabia, Jordan and Lebanon
Auditor: KPMG
Key brands: HP inc, Cisco, HPE, Microsoft, Autodesk, Intel, Kingston Technology, Western Digital, NetApp, Adobe, Commvault, Veeam
Ownership: Public listed firm.
2017 sales: $735m
01. Redington Gulf FZE
Raj Shankar, Managing Director
Verdict
Redington Gulf has once again shown that it is the undisputed leader in the MEA and CIS distribution segment for disties operating from the Middle East after the value, volume and telecoms distributor reported an excellent $3.6bn in sales revenue for FY2017. Some of the key milestones for Redington was unveiling a new global brand identity and its Mobility, Value and Volume business units posting growth.
What were the company’s milestones in 2017?
We launched a new global brand identity that fully reflects what we stand for as an organisation. This was not a mere change in brand identity but a coming of age for Redington, a transformation that the company is engineering.
What are your plans for 2018?
Our priorities include consulting on cloud, analytics and IoT practices, and creating a workable model for the services business including MPS and DaaS.
What were the main revenue drivers last year?
The main drivers for revenue growth in 2017 were Mobility and Value added distribution business. We strengthened our partnerships with the vendor community by adding many new brands across all our strategic business units.
What are the challenges facing the Middle East channel?
There are multiple challenges although the key ones include the geopolitical developments in the region, adequacy of capital for the regional channel and lack of technically qualified professionals in emerging tech.
What will drive growth in 2018?
Growth drivers will come from consulting on cloud, analytics and IoT practices, and establishing a workable model for MPS and DaaS.
Tel: +971 4 373 4000
Headcount: 1,985
Website: www.redingtonmea.com
Active accounts: 19,445
Regional offices: 26 offices in MEA and CIS
Auditor: Deloitte & Touche
Key brands: Over 90 key brands
Ownership: A 100% subsidiary of public-listed Redington India Limited.
2017 sales: $3.6bn
