Philippe Jarre, President, Mindware Group – Thoughts on the future of Value Added Distribution
Jarre writes about how the market is changing and how VADs need to adapt in order to stay ahead of the curve
Mindware is a global IT distributor that combines the best of both worlds with global best practices tailored to the regions’ individualities. We offer a complete portfolio of over 50 top-class vendors covering an array of technology verticals such as security, infrastructure and networking, making us a one-stop-shop for all IT needs. Our dedicated services division has 40 solution and pre-sales consultants and focuses on enabling partners. Mindware has a solid financial position that enables us to finance the most complex deals. With warehouses in more than a dozen countries across the MEA region, that allow for faster delivery of hardware and an effective supply chain. Below, I share the journey of our own company as an example of how the market is changing and how VADs need to adapt in order to stay ahead of the curve.
Having been an IT distributor in the region for more than 30 years, Mindware has a strong relationship with its channel partners based on trust, transparency and open communication. In addition to offering hardware and software products, we have the critical skills to integrate and build solutions for our partners, provide value-added services such as technical support, training, and marketing to help channel partners differentiate themselves from the competition. We offer competitive pricing and flexible payment terms to help them manage their cash flow. We also ensure that our supply chain operations are streamlined and efficient, so that our channel partners can receive products quickly and easily. This can include optimizing inventory management, improving delivery times, and providing real-time tracking information.
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. Our emphasis must shift towards supporting the technology that underpins this transformation: cloud computing, security, IOT and data analytics. Mindware is investing heavily in these areas and we are constantly upskilling to stay as market leaders and help our partners to succeed in the ever-changing technology landscape.
With the recent economic changes and challenges, as well as the addition of too many dynamics to the global trading and commerce industry, we truly believe that a Value Added Distributor (VAD) like Mindware plays a pivotal role in supporting and facilitating digital transformation across geographies in general – and emerging countries specifically.
The cost of capital continues to rise, and is foreseen as a primary challenge in the year ahead. The past 12 months have seen a sharp increase in interest rates, rising from few percentage points to nearly 10% in this market. This is putting huge pressure on distributors to support their partners to be able to manage their cash flow in a very cash intensive business. With the increased financing cost and the nature of the technology distribution industry being very price sensitive, we truly believe that we will see a consolidation of players in the market.
“Mindware provides robust financial capabilities in a very financially challenging world today.”
Players in the industry who have 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 (ROCE). 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.
Mindware provides robust financial capabilities in a very financially challenging world today. Our legal presence in most Middle East and Africa countries, as well as our warehouses in over a dozen countries across the MEA region, enable us to offer faster delivery and a more efficient supply chain. Additionally, our dedicated Services division focuses on enabling our partners rather than competing with them, and possesses recognized technical expertise in tailoring the best solutions for our partners and their customers. Our technical services include pre-sales support such as consultation, implementation, integration, and training, which help our partners and resellers identify and deploy the right solutions to their clients.
We also offer post-sales services such as managed services and cloud services, which provide ongoing support and maintenance to ensure those solutions continue to meet their clients’ needs over time. Additionally, we offer services in emerging areas such as AI, IoT, DevOps, and Security, providing the necessary support and expertise to help our 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 our customers in the MEA region and beyond.
“With automated process and real-time data, we make informed decisions and help our partners to adapt the same as part of their business strategy”
A few years back, Mindware studied the market landscape and trends and realized the potential existed for an e-commerce platform. The idea was to reach a customer base outside of the traditional region and to reach all decision makers within the organization. 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 eCommerce platform www.store.mindware.net we provide customers with the purchasing options they expect while staying ahead of the curve.
The IT industry has made a big leap towards digital transformation – which was essential in the pandemic era – and since then it has evolved at an alarming rate. Mindware is focused on providing improved customer experience and digital transformation by enabling self-service options, real-time updates and an enhanced communication channel. Not only that, DX helps Mindware to be more agile and respond quickly to market changes and new customer demands. With automated process and real-time data, we make informed decisions and help our partners to adapt the same as part of their business strategy. Most of the business has transformed into cloud, public/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 the proper online channels such as marketplace, e-commerce, online services and remote assistance is growing day by day.
Mindware is leading the charge in digital transformation and innovation with 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 and also leveraging distributors’ marketplaces to increase their reach, gain access to new routes to market, and ensure that the channel adapts to the evolving needs of vendors.
Mindware saw this as a great opportunity to fill the gap with resellers to assist them in navigating complex XaaS licensing models and simplify their purchase process and so launched its marketplace few years back. Mindware’s marketplace (www.mindwarecloud.com) offers its partners a range of aggregated cloud solutions from various hyperscalers, private cloud providers, and ISVs, in addition to our 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.
“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”
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 our 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.
Last year, we launched Mindware Academy, an internship program 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. This program aims to bridge the skills 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. At Mindware we provide employees with opportunities for growth and career advancement within the organization.
At Mindware, marketing is considered a crucial pillar in the distribution landscape and is taken very seriously. To set ourselves apart from the competition, we have made significant investments in establishing a strong marketing department across the entire region and provide Marketing-as-a-Service to both our vendors and partners. The marketing department at Mindware collaborates closely with the sales and channel team to develop targeted marketing campaigns that cater to the specific needs of buyers at different stages of the sales cycle. These campaigns are closely monitored for ROI, and adjustments are made as necessary to achieve the desired outcomes.
“At Mindware, marketing is considered a crucial pillar in the distribution landscape and is taken very seriously”
Mindware has received several awards and recognition from its vendors and industry leaders recognizing the company’s commitment to excellence, outstanding performance in delivering innovative solutions, driving growth, and providing exceptional customer service. This recognition highlights Mindware’s position as a leading value-added distributor in the MEA region, and demonstrates the company’s commitment to delivering value and excellence to its customers and vendor partners.
At Mindware, we are more than just an IT distribution company; we are a trusted partner to our customers, providing a comprehensive range of value-added services to help them succeed in today’s fast-paced and rapidly evolving technology landscape.