Computer Reseller News SA March 2008
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Transcript of Computer Reseller News SA March 2008
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March 2008
Iomega scopes t o broadenits of ferings p8>>
Adobe expands M idd le
East & Africa focusp10> >
Int el pun t s new chiptechnology p12> >
SAs energy cr isis opensup op portunit ies for
resellers p13> >
Inside This IssueInside This Issue
Is consolid ation in t he local ITdistribut ion space long overdue?Pundit s share som e insigh t s onw hy t he local dist ribut ion sect orshould consolidate. p18>>
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As signs of an IT slowdown become more evident there have
been increasing calls on local distributors to consolidate. The
calls are not just getting louder but come at a time when
many pundits in the local channel feel that Lightedge
Technologies unceremonious exit from the local distribut ion
scene in February is an indication that the distribution sector
is under pressure. Faced with a channel credit crunch, high
interest rates, volatile foreign exchange rates and an energy
crisis which has led to load shedding, distributors are battling
to survive.Is consolidation long overdue in the South African IT
distribution sector? Should local distributors consolidate to
become more relevant and compete on an international level
with global distributors such as Ingram Micro and Westcon?
While there are no easy answers to the questions raised, a
confluence of factors suggest that a much smaller distribution
industry with probably five big distribution powerhouses
would benefit the local IT channel more than having
numerous players that are not only diluting their own margins
but are constantly engaging in meaningless price wars.
History has shown that the South African channel market
can typically support only two strong distribution houses irrespective of the vendor brands they represent. Any
addition to the number of distributors has an effect on the whole sector in that the smaller, weaker ones tend to
disrupt the channel by chasing after existing deals and not growing the market through new clients and transactions.
So, as the local IT market continues to evolve with the retail sector taking centre stage, most vendors are seeing
and using the retail channel as the best route for selling a lot of their commodity IT products. The big retailers not
only have capacity to hold stock but have greater footprints giving vendors the countrywide exposure they need.
With the retail sector emerging as the alternative distributor, smaller independent, regional distributors and sub-
distributors will find doing business a lot harder as they will not be able to compete with the big retail houses.
By consolidating the distribution sector, the IT channel will not only see stronger and more resilient entities that
will enable future growth but also reduce the over distribution and dilution of vendor brands.
With most multinational vendors, such as Cisco, considering streamlining their distribution channels in favour of
fewer partners that have a global footprint, it is vital for local distribution powerhouses to start thinking along
universal lines if they want to remain relevant to their vendor partners.
As I would like to engage more with you, please let me know what you think about consolidation in the
distribution channel. I can be reached at [email protected]
EDITORS: NOTE
Consolidation
in distr ibution
Manda Banda publisher
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CRN Contacts:
Publisher:Manda [email protected]
Online editor:
Kaunda [email protected]
Journalist:Port ia [email protected]
Intern:Dominic [email protected]
Brand executive:Nirosh [email protected]
Sub-editor:Jenny [email protected]
Designer:
Spencer van [email protected]
Database and subscriptions:Daisy [email protected]
copyright notice
CRN South ern Africa isp ublished month ly by
SystemsPublishers(Pty) Ltd. The copyright of all
material in thisp ublication is reserved by the proprietors,
except where expressly stated. The publisher, however,
will consider reasonable requests for the use of materialby otherson condition that t he source and author
of the report are clearly attributed. Due to the nature
of t he newspaper print process, SystemsPublishers
cannot be held responsible for colour variations
in printed advertising. Printed by Ultra Litho.
CRN Southern Afr ica is a licensee of CMPMedia LLC.
Private Bag X12, Rivonia, 2128Tel: (011) 234 7008Fax: (011) 234 7025Registered with the Audit
Bureau of Circulation
News & Analysis
4 Whats News
5 Coming s & Goings6 Demand Gener ator takes a look at how Petrow Food Ingredients
implemented SAP Business One. By Dudu Shaba
7 Hi Five
8 Iomega has scoped to broa den its offering following the ExcelStor
acquisition. By Kaunda Chama
10 Adobe sees great potential for softwar e sales in emerging
markets and has opened a SA subsidiary. By Kaunda Chama
12 Intel has mad e it its globa l strateg y to place the majority of its focus on
ramping its recently launched 45nm chip technology. By Kaunda Chama
13 SAs ener gy cri sis opens up opportunities for the channel. By Dudu Shaba
18 Cover Story: Is consolidation in the local distribution space long overdue?
Experts share some insights on why the IT distribution space should consolidate.
By Manda Banda
Features
22 Account ing Softwa re: Accounting software garners momentum
as new businesses are registered every year. The opportunities
for savvy resellers to earn recurring revenues are vast.
By Dudu Shaba
26 Databa se Software: As businesses demand fast, secure
access to their applications, database infrastructure has become
the central nervous system of an organisations IT infrastructure.
By Dudu Shaba
30 Storage: The storage space has become more dynamic as products
and solutions become much easier to use and manage. Companies
of all sizes need to investigate the storage options available to them.
By Dudu Shaba
36 Servers: The server market continues to experience consolidation as
virtualisation continues to receive wide acceptance. What opportuni-
ties lie ahead for solution providers server consolidation takes centre
stage? By Stanley Chishala
40 Dilbert
40 Snap Shot: Peter Vieira, director,
TallyGenicom SA
Contents
10
12
Scans in this publication have been reproducedon the EPSON PERFECTiON 2450 phot o
16
39
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WHATS NEWS
Esqu ire keeps not ebooks safeEsquire technology introduced an aluminium notebook case, designed for notebooks
up to 17-inches in size.
The case is built with lockable latches that enhance security and an adjustable
padded shoulder strap, which has been ergonomically designed to offer greater carry-
ing comfort. The two exterior hulls are made of solid aluminium providing sturdy, yet
lightweight, protection of the contents. And with a robust and protective foam coat-
ing, users will feel assured that their livelihoods are safe.
Buf falo launches NAS dr iveBuffalo Technology announced the launch of its Network Attached Storage (NAS)
external drive. The NAS drive offers a RAID 0/1/5/10 and Standard, Active Directory
Support, gigabit networking.
Available in 1TB, 2TB, 3TB and 4TB, the NAS drive provides Memeo AutoBackup
and is simple to install and manage.
The Buffalos Active Directory (AD) support will enable users to join an AD domain
to utilise AD users and groups. It offers DFS (Distributed File System) support and has
an easy setup wizard and system management through an intuitive web interface.
COMINGS
&GOI
NGS
Best er to head Inform ationWorker unitMicrosoft SA has appointed Albie Bester as the new
head of its Information Worker division. Bester, who
has been with the local subsidiary for 13 years, will
take over from Cyril Belikoff, who has moved to
Seattle to take up a position with Microsofts corpo-
rate head office. Bester is currently driving Microsoft s Heroes
Happen Here launch, which will see the company launch enterprise
products later this year.
The Information Worker division is responsible for Microsofts
desktop productivity, unified communications and business intelli-
gence products.
Reyno ld s to lead SM SP di vision
Mark Reynolds, previously responsible for Microsoftsanti-piracy business unit, has been promoted to
Partner Lead in the companys vital Small and
Mid-Market Solutions &Partners (SMS&P) division.
He will play a key role in driving Microsofts renewed
focus on the small and mid-sized market.
Forb es is new M icrosof t SAnational technology off icer
Yasmin Forbes is the new national technology off icer
at Microsoft SA. Forbes, who has worked with sever-
al South Africa-based multinational IT companies,
will support recently-appointed public sector director
Joshua Motjuwadi, as Microsoft looks to work with
government across key initiatives such as improving service delivery,
skills development and broadening digital inclusion.
Lenovo go es t hin, lightLenovo unveiled its highly-
anticipated ThinkPad X300
notebook PC. The ultra-thin,
ultraportable notebook
measures less than 1.85cm
and has a starting weight of
1.33kg.
Rashid Wally, Country
General Manager of Lenovo
SA says, Our customers told us that they wanted
a notebook that was amazingly thin and light but
that they still wanted their battery options, their
USB ports and of course, their DVD burner.
Wally adds that the ThinkPad X300 combines a
number of leading technologies such as solid-state
drive storage, an LED backlit display, ultra-long bat-
tery life and enhanced wireless connectivity.
New D-Link Gigab itSw it chesD-Link launched new environmentally-friendly 16
and 24-port Gigabit switches.
The DGS-1016D 16-port
and DGS-1024D 24-port
high performance desktop
or rack mountable switches
bring the benefits of D-
Links Green Ethernet tech-
nology line to small and
medium sized organisa-
tions.
Tobie van Schalkwyk, Country Manager for D-Link
SA says: We encourage organisations to do the
right thing by considering their carbon footprint
when purchasing new networking products .
Both the DGS-1016D 16-port and DGS-1024D
24-port Gigabit switches feature a non-blocking
switching architecture that filters and forwards pack-
ets at full wire-speed for maximum throughput.
Pinnacle launches graphicscardPinnacle Micro launched the MSI NX8800GT
512Mb graphics card.
Shaun Welgemoed, MSI product manager at
Pinnacle Micro, says: It is the world s first
DirectX10 GPU with full Shader Model 4.0 support
and it delivers unrivaled levels of graphics realism
and film-quality effects.
The MSI X8800GT delivers up to two times the
performance of a single graphics card and is config-
ured for a stunning gaming experience by allowing
two cards to run in parallel, adds Welgemoed. The
graphic card is designed to run perfectly with the
PCI Express bus architecture.
4 CRN SOUTHERN AFRICA MARCH 2008
Rashid Wally
Tobie van Schalkwyk
Albie Bester
Mark Reynolds
Yasmin Forbes
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SMC SA signs DCC
SMC Networks SA appointed Drive Control Corporation (DCC) as the
local distributor.
The agreement will allow DCC to deliver a wide range of quality,
cost effective networking solutions to our reseller base, says Pierre
Holtzhausen, networking specialist at DCC. In addition, it will provide
these resellers with a well-positioned brand that is well-known in the end
user market.
We are very excited about this initiative. Users will immediately
gain from a broader product range and an enhancement of logisticservices and technical support, says Paul Luff, country manager, SMC
Networks South Africa.
BDS signs X&R as Kenyan disti
Bytes Document Solutions appointed X&RTechnologies as its new
Kenyan distributor.
Coenraad Ackerman, African operations manager at Bytes
Document Solutions says that the operations of the newly formed com-
pany will be headed up by CEO Lucy Njoroge.
We are focused, with the support of Bytes Document Solutions, on
providing superior delivery and implementation of Xerox products and
solutions to our customers and to follow through with quality after-sales
support, says Njoroge.
HP appointed Axiz
Axiz has been appointed, a distributor for HPs Imaging and Printing
Group (IPG).
Axiz will distribute HPs wide portfolio of IPG commercial and
consumer products.
Mark Perry, SPO Manager, HP RSA says Axiz has the correct structures
in place to add value to our reseller partners and their customers and
also has an established distribution relationship with HP. This highlights
HPs growing commitment to the South African market and further
demonstrates that HP is continually looking for additional ways to reach
and meet its customer demands, adds Perry.
Pinnacle, Verbatim part ways
Pinnacle Micro and Verbatim end their distribution agreement.
Tim Humphrey-Davies, national sales and marketing director atPinnacle Micro, says that the contract has been terminated in an
amicable way.
We believe it is a decision that will benefit both companies as the
need to offer value to both supply partners and customers is of utmost
priority, says Humphrey-Davies.
Humphrey-Davies also confirmed to CRN that Pinnacle Micro had
been in discussions with RiDATA as an option to extend their Optical
storage media offering.
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etrow Food Ingredients (PFI), the South
African division of global supplier of spices,
herbs, nuts and related food products, CJ
Petrow International Limited, has imple-
mented SAP Business One from SAP, theenterprise resource planning (ERP) solution
for small businesses to improve its manage-
ment of stock.
According to Riaan Vorster, PFI financial
manager, the company has one manufac-
turing facility, three administrative and sales
branches, and 20 warehouses spread
across all nine provinces.
He says that SAP Business One replaced
an accounting system that did not allow FPI
to drill down to the costs of production or
track products from source through pro-
duction to customers shelves.
As a provider of food, we have to know
exactly where our stock comes from and
where it ends up, so that if there is a need
to recall a given product we can do it easily.
At the same time, it is essential that we
know what any given product is costing us
to produce so that we can refine efficien-
cies in the manufacturing process, he says.
Vorster adds that the company looked at
a number of different software packages
and the only one that promised the func-
tionality the company needed for manag-
ing stock in a way that suits a manufactur-
ing environment was SAP Business One.
We would have been happy if it had
been merely good at that, but it has turnedout, in practice, to be superb, he says.
Also, accounting packages have a way
of averaging out the cost of stock, which
makes it difficult to see which are your
more profitable lines. With SAP Business
One, I can see precisely what its costing usto produce each product we take to mar-
ket, he adds.
Vorster says the implementation of the
SAP Business One software system was a
success besides one or two minor issues.
This is to be expected with any imple-
mentation of an ERP solution. Overall, we
were very impressed with the implementa-
tion and the professional skills that were
shown, he says.
Paul Vermaak, SAP SA solution manager
for Business One comments.
To be truly competitive a small business
needs to automate all its routine activities to
be free to spot and exploit new business
opportunities and give continuously better
service to its existing customers. SAPBusiness
One makes that possible, along with provid-
ing an order of useful information about the
business that small businesses simply havent
had access to before, he says.
Vorster adds that SAP Business One has
also delivered business benefits through
increased efficiencies at an administrative
level, with inventory now being managed
by only one person instead of the team of
seven that used to be necessary.
Were doing far more with less and no
one is working any harder. In fact, we all
go home on time now and, for the first
time in many years, Ive got time to play
golf! So, on many different levels, SAP
Business One has already paid for itself,
he concludes.
Do you have demand generator stories to
share with us? Please contact Dudu Shabaat [email protected]
6 CRN SOUTHERN AFRICA MA RCH 2008
DEMAND GENERATOR: PETROW FOOD INGREDIENTSSOLUTION PROVIDERS
BYDUDUSHABA
P
To be t ruly competit ive a small business needs to automate all it s
routine activities to be free to spot and exploit new business opportu-
nities, and give continuously better service to its existing customers.
SAP Business One makes that possible. Paul Vermaak, SAP
Saving time, and improving the companys stock management.
Petrow Foodimplements SAP Business One
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HIGH FIVE: HOLTON & ASSOCIATESSOLUTION PROVIDERS
CRN SOUTHERN AFRICA MA RCH 2008 7
Hol ton & Associates additional
software maximises investments
BYDUDUSHABA
Reducing stress and allowing for a more enjoyable lifestyle.
Holton & Associates, distributors of computer software products, has
introduced a new range of software products mainly designed for
small businesses and home users. Grayford Holton, MD, Holton
Associates says the products will be available in the best stores
through its distributors TVR, World Computer Systems and its dealers.
CRNspoke to Grayford Holton, MD, Holton Associates, to find outhow they will market these products in the channel.
CRN: What are these newly launched products?
GH: The new range of software products are the following:
Serif provides a platform to share your imagination and achieve-
ments with your friends and family.
EIOFFICE looks like Microsoft Office and protects the content with
output to PDF.
T3 security key ensures that data is stored and includes insurance
against theft of the PC.
Snagit scans info off your computer or the Internet.
Financial manager serves as a financial manager for small busi-
nesses and home users.
Mobilegateway is a trip sheet that helps users to claim for travel
expenses.
Download Accelerator Plus a file can be downloaded very quickly
on the website and is free of charge. I donthink this makes sense.
I cant fix it because I dont know what it should be
Page Plus designed for desktop publishing
Movie Plus takes digital video to the next level and produces
outstanding photo shades.
Holton adds that Bitdefender, which was introduced four years
ago, has made its mark as a top seller in major stores.
CRN: What is the importance of these products and how are
they going to benefit resellers in t he channel?
GH: The products are mainly designed to reduce stress and allow
small businesses and home users to have a more enjoyable lifestyle.
They minimise stress by protecting against viruses, spam, automating
backup of data, fine-tuning computers through a known program
and have local, friendly service.
These products explore new avenues, and are sold at affordable prices
in comparison to our competitors in the channel, and they are of high
quality, resellers in the channel will make good profits for themselves.
CRN: How will Holton & Associates distribute these products?
GH: We will sell the products through distributors and resellers in
the channel, including retail stores. We have also gone as far as
contacting the channel on a one-on-one basis, getting them to lookat our products on the Web.
CRN: Given the competiton in the channel, what strategies will
the company apply to market these products?
GH: When we launched Bitdefender it was unknown and we worked
very hard to bring it to the market. People find Bitdefender very
effective in that it does not slow down their computers.
Similarly, this will also apply to these newly launched products.
The methods we apply will be through direct training, technical
service, group discussions, and extensive advertising through a variety
of newspapers and magazines.
CRN: What would you say are the challenges faced by
small businesses?
GH: They are faced with the myth that you need to be a professional
to use IT products, which is not always the case. These products are
very simple to use, resellers do not need to be specialists to sell them
and end-users do not need to employ technicians to install their software
for them. Instead, these newly launched products are advantageous
in that they can enable small businesses to start their own processesand end- users to start up their own businesses.
We expect t remendous sales of t hese productsbecause they fill a unique niche in the home mar-
ket with a definate edge on the quality and prices
of competit ive products. Grayf ord Holt on,
Holt on & Associates
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ANALYSIS: IOMEGASOLUTION PROVIDERS
CRN SOUTHERN AFRICA MARCH 2008 9
GWT is an indirect subsidiary of China
Electronics Corporation (CEC), an information
technology conglomerate which controls
more than 60 second-level subsidiary
companies primarily engaged in the areas of
computer and component manufacturing,
integrated circuit design and manufacturing,
software development and systems integration,
telecommunications, consumer electronics
design and manufacturing.
GWT and its affiliates will hold
approximately 43 per cent of Iomegas
common stock, making it the largest
Iomega shareholder.
Com pany m ake up
Once the deal has been officially closed,Jonathan Huberman will continue to serve
as CEO, Thomas Kampfer will continue as
President and COO, and Preston Romm will
continue as CFO. Eddie Lui, CEO of
ExcelStor, will become executive chairman
of Iomega. LY Chan, Senior VP, general
manager of ExcelStor, will become chief
administrative officer of Iomega. Stephen
David, chairman of Iomega, will continue
on the board and will become the lead
independent director.
We expect the transaction to be accre-
tive to our bottom line, and the combined
company is expected to earn more than $1
billion in annual revenue for 2007 and have
approximately 3 000 employees worldwide.
We are excited about our potential to com-
bine the vast computer and consumer elec-
tronics product development and manufac-
turing capabilities of ExcelStor with our
global brand and sales channels, our 27
years of experience building a successful
company in the Americas and Europe, and
also the opportunity for the combined com-
pany to partner with GWT and CECs other
China-based affiliates to address worldwide
markets, says Huberman.
We expect to be an integral part of the
CEC family and accelerate our growth in our
core Americas and European markets and
obtain significantly greater access to the
China market. Our ultimate goal is to build
a thriving global leader in computer periph-
erals and other consumer electronics prod-
ucts, added Huberman.
Lui, CEO of ExcelStor, says: I am looking
forward to working with Iomega and seegreat potential in combining and leveraging
the complementary skills and products of
ExcelStor with Iomegas strong brand and
sales channels. With solid execution by our
collective excellent management and
employees, I am optimistic that we can
achieve our joint vision of the new Iomega
as a leading innovator of technology prod-
ucts which greatly expand the brand equity
and global reach of the Iomega name.
The transaction is subject to various clos-
ing conditions, including approval by the
Peoples Republic of China government and
other applicable regulatory authorities, and
is expected to close in mid-2008.
Looking at Iomegas major focus
Chamberlain explains that storage needs
continue to grow exponentially notjust for Iomega but for all storage vendors
in general.
He says that the number of hard drives
sold has tripled worldwide over the past
12 months, resulting in a doubling of the
revenues earned by hardware vendors.
Regarding this, he said the deal with
ExcelStor is a natural transition in Iomegas
evolution, stating that the company has
access to a broader product portfolio and
technologies through its sister companies,
while Iomega holds a brand that has very
good reputation worldwide and access to
global markets.
He says that mid 2008 will see the com-
pany go public with a detailed plan of
action. As a company we have to remain
focused, and avoid becoming a company
that deals in so many products that we lose
focus, comments Chamberlain.
He adds that SA is one of the fastest
growing markets and that Iomegas rev-
enues tripled in the last financial year; this it
attributes to its local presence as opposed
to just dealing with overseas distributors
and resellers.
Chamberlain, says that the biggest vol-
ume movers are the retail outlets which
account for about 70 per cent, while thetraditional channel manages the remaining
30 per cent.
The growth in the storage market is a
result of the increase in the amount of con-
tent that is now in digital formats. In SA,
50GB external storage devices have become
standard.
In addition to this, Iomega has started
shipping 1.5TB external storage units due to
the increase in demand which is happening
at the same time as the cost per gigabyte
continues to drop.
Networking and mult imedia devices also
continue to gain popularity globally. Home-
based networks are also growing at an
impressive rate and home users are also
looking at consolidating their storage dri-
ves, explains Chamberlain.Regarding this, he reveals that the HDMI
Iomega ScreenPlay is on its way.
He comments that locally, the demand
for external storage devices is growing even
on the high-end corporate side and this
could see Iomegas hard-drive business
improving even further.
When asked what effects flash-based stor-
age, dropping prices and increases in capaci-
ty of solid state drives is having on Iomegas
hard-drive business, Chamberlain says it is
interesting that unlike what one would
expect, the growth on that side is actually
helping the increase in hard-drive sales.
We continue to sell more units per quar-
ter because of the advancements on the
flash and solid-state drive side, he notes.
He adds that the move to networked
storage and improvements in multimedia
devices will be the next wave of growth for
companies like Iomega.
The network att ached server (NAS) mar-
ket is also poised for further growth in the
near future, concludes Chamberlain.
Essentially, storage, much like security, is
a sector that w ill continue to grow as digital
content and legislation continue to increase
the need for capacity. It will be interesting
to see how storage vendors evolve to meetglobal demands.
Our ultimate goal is to build a t hriving global leader in computer
peripherals and other consumer electronics products, Jonathan
Huberm an, Iomega
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oftware vendor Adobe sees great potential
for software sales in emerging markets and
has opened a South African subsidiary as a
base from which it will represent the
Middle East, Africa (MEA) and the Indian
Ocean islands.
Giuseppe Verrini, managing director,
Adobe Systems (Southern Europe, MiddleEast, Africa) was in the country at the
beginning of March for the launch and told
CRN that although the company has a
global strategy, it has to have a presence in
strategic areas.
He outlined Adobes reasons for invest-
ing in the market, new focus areas (such as
the enterprise side of the business) and
future plans.
Although he was reluctant to divulge the
number of employees at its local office, he
said that it was in the double digits and that
the number of employees the company has
in the MEA region will double this quarter.
The potential for software sales looks
great, especially from an emerging markets
point of view (Africa, Brazil and some Far
East countries). This is actually one of the
top investment priorities for us.
The world is changing because
previously two thirds of software revenue
came from the United States but the trend
is changing and to stay ahead globalcompanies have to move with the times,
explains Verrini.
In terms of revenue, Adobe holds sixth
spot in the world rankings of software
vendors and managed revenues of about
$3.16 million last financial year, 23%
growth on the previous corresponding period.
With that achieved, the company says in
foresees more double-digit growth in the
current financial year, a feat it attributes
to the results of last years launch of
Creative Suite 3 and the integration of its
products with Micromedia, which it
purchased in 2005.
Our goal at the moment is to integrate
our solutions with popular technologies like
Web2 and also keep pace with the fact that
all content is being digit ised, he says.
In addition, Verrini says that business
confidence is backed by the fact that Flash
Player and Adobe Acrobat Reader keep
gaining popularity.
Another big t rend that we are taking
note of is the increase in the need for
mobility and that is why we are tailoring
solutions like Flash Player for mobile devices
as more of them become connected to the
Internet, says Verrini.
Regarding local operations, he explainsthat 60 per cent of the MEA staff will be
stationed in SA so that the company can
take full advantage of the potential it sees
in countries like Nigeria, Zambia, Ghana
and Botswana.
We are also going to use SA as a hub
for getting more business in the Middle
East region, he notes.
The company will continue to focus onits three main customer categories, which
are the knowledge worker, creative
developers and corporates.
Locally, the company landed a major deal
with the South Africa Revenue Service (SARS)
last year that enabled the authoritys e-filing
system and, in turn, an increase in returns.
Its distribut ion channel will remain the
same with one enterprise reseller and
distribution through Dax Data, The Core
Group and Comztek.
The company is opting for improving
business with existing channel partners.
Rather than growing the number of
distributors it has, it is going to increase the
amount of business it does with those that
it already has signed up.
Regarding the obvious high levels of
software piracy in emerging markets,
Verrini says the solution is education.
Adobe believes that education about piracy
should start at school level.
The company also believes that giving
special discounts to educational institutions,
depending on circumstances, will also go a
long way in curbing piracy.
Meanwhile, on the corporate side,
it continues to work with its partners
and end-user customers with itscompliance programmes.
10 CRN SOUTHERN AFRICA MARCH 2008
ANALYSIS: ADOBESOLUTION PROVIDERS
Adobeincreases MEA focus
BYKAUNDA CHAMA
S
The company is opting for improving business with existing
channel partners. Rather than growing the number of distributors
it has, it is going to increase the amount of business it does with
those that it already has signed up.
Sees potential in software sales.
Giuseppe Verrini, Adobe Systems
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ith its technology refresh periods continually
getting shorter, Intel has made it its global
strategy to place the majority of its focus
on ramping its recently launched 45nm
chip technology.
Tiny Maubane, the silicon chip technolo-
gy vendors channel applications engineerSouth & Sub Saharan Africa says it is now
able to fit much more of its technology into
much less space, paving that way for small-
er, more powerful devices.
The impressive thing with the newly
launched 45nm technology is that it comes
in at the same price as its 65nm predeces-
sor. This is a smart move by the vendor as it
should encourage adoption by even the
biggest sceptics.
This gives our partners and customersthe capability to get more and do more at
the same price points, Maubane notes.
He adds that with this new technology,
the performance per watt is more apparent.
With the reduction in sizes that the com-
pany is now working with, there was
always a danger of current and other types
of leakages, but he explains that the ven-
dors IK technology has eliminated the pos-
sibility of this happening.
He reveals that 32nm technology should
hit the market in the fourth quarter of the
current business year.
As technology refresh rates get shorter
and shorter, one wonders if this is affecting
hardware vendors bottom line earnings.
Maubane says from an Intel perspective it
still makes business sense to keep the
refresh rate at just under 18 months
because the cost of production also keeps
getting cheaper.
Regarding the companys Quad Core
technology, which was introduced to the
market with much hype but did not get the
rate of uptake the company expected,
Maubane says one of the biggest deterrents
is that software developers are signif icantly
behind the pace of hardware development.There is not much software on the
market that allows users to maximise the
full capabilities that Quad Core provides,
he notes.
Maubane stresses that getting people to
advance from 65nm to 45nm on Quad
Core is quite a challenge.
Even with us bringing out impressivetechnology with so much potential, we still
feel that software developers are not
coming to the party quick enough with
solutions that can maximise our technology,
especially on the enterprise side,
he explains.
Interestingly, Intel says that most of the
advancements on the enterprise side are
coming from the virtualisation space. This
means that the vendor sells fewer chips,
but it is the business segment that is taking
full advantage of its new technology.
On the client side, development is still
lacking, even on the gaming side, we find
that only a few games are built for Quad
Core technology, so the software side is
lacking, he says.
Regarding current trends, such as green
computing, Intel maintains that it is all
for helping to make the environment
safer and cleaner, stating that even with its
Core 2 Duo strategy it did away with
hazardous materials, such as lead in its
CPUs and motherboards.
For the betterment of our environment
we have to make sure that we are Removal
of Hazardous Substances (ROHS) compliant
and have to be an environmentally respon-
sible vendor, he says.
In addition to this, he says that Intel is
working around the clock to reduce the
wattage both in passive and active mode
for chips and motherboards.
Even on the server side, 45nm technology
has reduced the wattage consumption
to 80 and we are moving towards the
60 watts level with future releases,concludes Maubane.
12 CRN SOUTHERN AFRICA MARCH 2008
ANALYSIS: INTELSOLUTION PROVIDERS
Tiny Maubane, Intel
Intel punts new chip technology
BYKAUNDA CHAMA
Vendor shifts focus to newly launched 45nm technology.
For t he bett erment of our environment we have to make sure
that we are Removal of Hazardous Substances (ROHS) compliant
and have to be an environmentally responsible vendor, Tiny
Maubane, Intel
W
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ANALYSIS: ENERGY CRISISSOLUTION PROVIDERS
he electricity supply, nationally, is under
severe strain. Eskom states that it finds itself
in a position where the demand for electricity
may exceed the available supply from time
to t ime. So, to manage the situation in t hebest possible way, planned supply interrup-
tions are being carried out by the company.
Nationwide rolling blackouts continue to
inhibit business operations as well as affect
households. Not only is the hosting of the
2010 World Cup at risk due to power cuts,
but these issues show no sign of abating
until 2013, as fast increasing demand for
electricity pushes power plants beyond
capacity.
Meanwhile, vendors, distributors and
resellers are beginning to receive more
inquiries from customers trying to find out
what technologies they can implement to
deal with the situation.
According to Sheldon Hand, pre-sales
consulting manager, Symantec, this means
that there is no Internet connectivity, e-mail,
which has become one of the most used
business applications, and even access to
telephony services.
Without addit ional fail-over measures,
load shedding could render organisations
helpless from a communications perspec-
tive, he says.
Christelle Larkins, area manager, SA, East
Africa and Indian Ocean, MGE Office
Protection Systems, concurs that load-shed-
ding can render a companys communica-
tion system completely useless.With telephone lines, networks and
faxes dependent on electricity to function,
unless there is a business continuity plan in
place that addresses communication specifi-
cally, a company could find itself unable to
speak to the outside world, she says.Not only does it result in loss of produc-
tivity, sales and business but it also affects IT
equipment which is key for business com-
munication. One must remember that an
organisations IT infrastructure is its back-
bone. Rendering it inaccessible means busi-
ness grinds to a halt.
When load shedding occurs, the power is
immediately cut to all systems, including
phone lines and email, meaning correspon-
dence opportunities are lost. Most business-
es today rely on their ability to communi-
cate so a loss in communication results in a
related loss in revenue, says Robert Brandt ,
APC Product Specialist at distributor Drive
Control Corporation agrees.
Being as dependent as we are on tech-
nology, when companies experience load
shedding, productivity comes to a complete
halt. Companies are losing money every
time there is load shedding, says Lee-Anne
Hutchins, portfolio manager, ASBIS
Distribution.
Damages
Every computer or server has a very specific
manner in which it should be shutdown.
According to Brandt, a sudden loss of
power resulting in an instant shutdown of
this equipment can cause a loss of data oreven hardware failure.
John Middlewick, MGE product manager,
Comztek also agrees that IT systems nor-
mally require a processed shutdown to
avoid corruption of data.
In most cases, servers also need to be
booted up and shutdown in specific order,
but if software has been damaged, this may
be difficult to do. Also, most computers run
on a network, meaning that without power
there is no connectivity, rendering the com-
puters useless, he comments.
Surges or spikes can happen at any time
due to a number of causes, including light-
ning strikes, the on-rush of current follow-
ing an outage, or even the presence of
high-powered electrical motors such as air
conditioners or other household appliances.
These power fluctuations not only can
cause permanent damage to expensive andsensitive electronic equipment, they often
CRN SOUTHERN AFRICA MARCH 2008 13
Energy cr isis opens upopportunities for the channel
BYDUDUSHABA
Vendors, resellers see potential increase in notebook and UPS sales.
T
Sheldon Hand, Symantec
This means that there is no internet connectivity, e-mail, which
has become one of the most used business applications, and even
access to telephony services. Sheld on Hand , Sym ant ec.
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result in downtime, lost productivity and
data, says Rodney Callaghan, MD SA
Critical Power and Cooling Services division
of Schneider Electric.
Enquiries
Brand, Middlewick and Larkins, say that
they see an explosive growth in the number
of people opting for UPSes and the number
of enquiries is increasing everyday.
Middlewick says that most IT users are
extremely worried about being able to keep
systems up for a minimum of two hours,
and in many cases much longer. He says
that there has been a high demand for UPS
systems due to the damage caused by
surges on their equipment.We are getting every possible enquiry
that one can think of. As the word about
UPSes has spread, users have started phon-
ing our offices non-stop, asking about
everything from how to power their PC or
office, says Larkins.
There is currently a need to not only
protect computers against a sudden loss of
power but also to enable the user to carry
on working during power outages. Some
of the APC range of UPSes allows users to
connect up to 10 extended batteries which
can give an additional runtime of over 12
hours, depending on the power load of the
connected equipment, comments Brandt.
The t rend
With the prevailing situation do we see
more users turning to laptops or do they
still prefer to use desktop computers? Also,
is turning to wireless technology the perfect
solution?
In Larkins view, there is a definite trendtowards protecting current infrastructure.
This means that most of our users have
offices with servers and desktops they have
invested heavily in and are looking to use
well into the future. UPSes are a viable
option in this situation. That being said, dif-
ferent people have different priorities. If
you were thinking of a more mobile
solution before the power supply prob-
lems started, this is the perfect excuse to
invest in a notebook and 3G, she says.
Middlewick believes that most office-
based users still seem to be using desk-
top computers which require some form
of UPS or generator backup. He says
that the nature of an employees posi-
tion seems to be the deciding factor
when it comes to the type of computer
they use.
The trend is to move to mobile
devices and wireless technology which is
less affected by power, says Hand.
Sales oppo rt unit ies
Although businesses can be affected,
this is not all bad news for notebook
and UPS vendors, distributors andresellers. According to them, they are
looking at a potential increase in sales of
laptops and UPSes.
Middlewick says that UPS sales almost
trebled in January, with a large number of
back orders for stock that is landing soon.
Most resellers and users are aware of
the need for backup power but estimating
the cost of downtime can be difficult.
Impulse buying in the last three weeks has
been high as end-users have limited
options for backup solutions that can be
easily installed.
This is why UPSes are popular, as many
of them are plug and play requiring litt le
technical or electrical know how from the
user, he says.
Weve seen a phenomenal increase inboth sales and interest generated around
our products. Demand is increasing as peo-
ple start realising there are viable, cost-
effective solutions available to them. As
businesses and homes become accustomed
to load-shedding theyre starting to ask
what systems are priorities. Theyre then
phoning us to help them put solutions in
place, Larkin remarks.
Due to their onboard batteries, laptop
sales should increase, says Brandt.
Notebooks and 3G ensure mobility
because if the power goes down in a par-
ticular area one can always move to a WiFi
coffee shop or alternative premises. In
terms of UPSes, an uninterrupted power
supply will help businesses to continue
working as usual for a short period, which
will ensure a stateful shutdown. UPSes have
become a necessity in todays working envi-
ronment, he explains.
UPS sales have definitely increased.
Many companies still see UPSes as a grudge
purchase but are realising the benefits they
offer. Due to laptop prices decreasing and
more people being mobile and working
from home, laptop sales have increased,
says Hutchins.
What is the best advice?
To curb the power supply problem, Larkins
says there are a number of options avail-
able to PC users.
As mentioned before, users have the
option of investing in a UPS, either to give
them sufficient time to save and shutdown
or to continue working for a number ofhours. The combination of a UPS
14 CRN SOUTHERN AFRICA MARCH 2008
ANALYSIS: ENERGY CRISISSOLUTION PROVIDERS
Robert Brandt, APC
Notebooks and 3G ensure mobilit y because if the power goes
down in a particular area one can always move to? WiFi premises. In
terms of UPSes, an uninterrupted power supply will help businesses
to continue working as usual for a short period, which will ensure a
stateful shutdown. Robert Brandt, APC.
> p16
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and a generator is also viable.
While most people are investing in and
singing the praises of the generator, what
they often dont realise about having one is
that they dont always have an automatic
start up. Theres a lapse in time from when
the power is cut to when the generator kicks
in during which you still lose your data. A
UPSwill keep you up and running during
this time, allowing for a smooth switch
between power sources, says Larkins.
From a UPS perspective, one- or two-
hour solutions are the most cost-effective -
while centralised solutions will aid in lower-
ing the TCO over a fixed period such as
four years, Middlewick comments.
To assist businesses and individuals to
minimise any damage caused by load shed-
ding, Callaghan says that APC, by Schneider
Electric, has put together a list of tips, pro-
viding a simple, step-by-step guide to pro-
tecting valuable electronic equipment
against permanent damage caused by
these power anomalies.
The six tips cover the following:
1. Protect crucial electronics from harm-
ful high volt age caused by power
fluctuations (surges or spikes) by
selecting surge protectors with low-
let-through voltage ratings.
2. Ensure the safety of electronic equip-
ment by selecting a surge protector
that protects all available surge paths,
including electrical cords, telephone
cords, data lines and coaxial cables.
3. Determine which devices would
benefit from continued operation in
the event of a power outage and sup-
port t hat equipment with an uninter-
ruptible power supply (UPS).
4. Select a UPS model with the option to
add extra bat tery units to increase the
runt ime of critical devices.
5. Use power-management software to
monitor t he quality of power that
equipment is receiving and set up t he
ability to automatically and gracefully
shut dow n the system and applica-
tions when a power failure occurs.
6. Protect and manage structured wiring
and networking applications with a
UPS that enables remote manage-
ment of automation functions and
ensures protection in the event of a
power outage.
Companies could also look at using a
generator and UPS together. - Generators
take time to start up, which means a break
in power until the appropriate power level
is reached. A UPS will handle this transi-
tion, says Callaghan
Resellers
Regarding how best resellers can make
money from the problem, Larkins suggests
that they look at providing solutions well
into the future. With winter just around
the corner, resellers need to educate their
end-users and help them to ensure business
continuity no matter the power situation.
They also need to make customers aware
of the long lead time required in ordering
UPSes because of the sharp increase in
demand. Customers thus need to be
planning three to four months ahead, and
looking at what is mission-critical to their
businesses, she comments.
SolutionIt seems load-shedding is here to stay.
When researching what the short- and
long-term solutions are for computer users
to curb the problem, Brandt remarks that
the public is becoming more aware of
alternative power products. He recom-
mends that resellers should not sell the
cheap products that are flooding the
market as this will earn them a bad reputation.
They should stick to well-known brands
which have less come backs and problems.
The only viable solution for the
computer user is a UPS and, if their
budget allows, a suitable SABS-approved
generator, he comments.
According to Hand, resellers can supple-
ment their income by supplying removable
media, hardware and UPSes.
Short-term solutions for resellers can
include UPSes which could last for up to
three hours, generators, especially for
SMEs and wireless connectivity. A long-term
solution would be a standby data centre,
he says. I don t believe there are any real
short-term solutions to the problem,
as its one that Eskom and the government
have assured us will be part of our lives
beyond 2010.
That being said, an immediate response
has to be surge protection for your
equipment, make sure you fit protective
plugs that will absorb all voltage fluctuations
to all devices. Beyond that though,
companies have to look to the long term.
Do an off ice audit. Ascertain which
systems your business cannot do without,
and start doing some UPS and generatorresearch, Larkins concludes.
16 CRN SOUTHERN AFRICA MARCH 2008
ANALYSIS: ENERGY CRISISSOLUTION PROVIDERS
John Middlewick, Comztek
I dont believe there are any real short -term solut ions to the
problem, as its one that Eskom and the government have assured
us will be part of our lives beyond 2010.
>> p16
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emories reminiscent of the demise of Siltek
Holdings in November 2001 may have
reverberated in the minds of many channelplayers in the local IT distribution industry
after the recent liquidation of regional dis-
tributor Lightedge Technologies. The IT dis-
tribution industry and the channel received
the news with shock and concern, and
braced itself for more uncertainty in the
months to come.
The IT distribution sector is hoping that
Lightedge Technologies liquidation is not
going to have the huge impact the Siltekdemise did, especially as it happened at a
time when many pundits are forecasting a
drop in IT spending.
Like Silteks closure seven years ago,
Lightedge Technologies unceremonious
exit from the local distribution scene has
been so chilling that major players (solution
providers, VARs and distributors) are
concerned that it could affect confidence
in the IT distribution sector, thereby undo-
ing the gains the entire distribution sector
has made since the demise of Siltek.
This has raised concerns that the IT
distribution industry, which has been
booming over the past five years, needs
to consolidate.
A confluence of factors stand to
make the Lightedge liquidation
challenging for local distributors as it not
only coincides with the IT spending
slowdown, but the distribution industry at
large is grappling with the channel credit
crunch which has seen liquidations of
reseller businesses spiral.
To consolidate or no t t o
consolidate?
Pierre Spies, CEO at Tarsus Technologies, a
broad product distributor, says consolida-
tion in the IT industry could only be positive
for the channel as a whole, if it were to
happen particularly in the distribution
space. Spies adds the recent Lightedge
liquidation came as a surprise and will
definitely have an impact on the perception
of the distribution channel in general in SA.
However, Spies says he would notventure to say that there should be
18 CRN SOUTHERN AFRICA MARCH 2008
COVER STORY: DISTRIBUTORSSOLUTION PROVIDERS
Pierre Spies, Tarsus Technologies
To consolidate or not toconsolidate?
BYMANDA BANDA
Is the distribut ion sector falling apart?
> p20
Certain multinational
vendors have made
their intentions fairly
clear - to reduce thenumber of distribu-
tors. Pierre Spies,
Tarsus Technolog ies
M
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cause for concern but adds that
there is mounting pressure on distribution.
We could possibly see an impact on or
changes to certain players in the short
term, he says.
Paul Conradie, MD at Comztek, a specialist
networking distributor, says consolidation
should not worry local distributors. He says
mergers often ensure that entities are
stronger and more resilient to enable future
growth. Consolidation is not necessarily a
problem; however, it all depends on the
execution of the merger and the effect that
unity has on the market, he says. It is
important to have enough players of
consequence to ensure continuity in allareas of the IT market.
Arnold Fourie, CEO, Pinnacle Micro
Technologies agrees and says the channel
has seen a considerable amount of consoli-
dation. Unless the channel market comes
to an abrupt halt, we dont expect further
consolidation to happen soon, he says.
Fourie says any liquidation not just in
distribution but in the IT channel is
worrying and not good for the well-being
of the industry as a whole.
He explains that it is important to look at
the model Lightedge adopted rather than
the broader issues that are challenges for
the IT distribut ion sector. Perhaps the
market lost faith in its ability to service the
channel, he says.
Fourie points out that industry demand
seems strong in Q1 even with the anticipat-
ed drop in IT spending. He says distributorswill have to refocus their businesses and be
aware of the financial pressure that some
resellers are experiencing.
Gary Naidoo, deputy MD at local OEM
assembler Sahara Computers says while it
would be reckless on the part of distribu-
tion to ignore recent developments in the
sector, it is prudent to exercise caution as
far as reaction and response is concerned.
Naidoo remarks that relationships,
value-added supply, product knowledge,
skills, expertise, insight and advice should
be the order of the day. Essentially,
businesses have to adhere to these
practices and the mandate handed to them
via the channel, he says.
Margin pressure
Zandre Rudolph, sales director at Rectron
believes many sub-distributors and other
independent distributors that have
emerged on the scene and source their
products locally seem to be under
tremendous margin pressure. Rudolph says
Lightedge, as an example, wasnt an
outright distributor. The company was a
system builder focusing on the corporate
business buying the majority of its stock
locally, he says. There is nothing wrong
with the sub-distribution business model
provided certain business fundamentals are
taken into consideration such as cash flow
management and stock control.
Rudolph says in terms of the authorised
distribution channel there is definitely some
tension. Some distributors are really under
pressure from their multinational vendor
partners on the one hand and the credit
risk from some unworthy reseller compa-
nies on the other, he says.
Pinnacles Fourie concurs and says most
of the big distributors in SA are entrenched
in the local channel and hopefully are
making money. He points out that
Lightedge was operating mainly in the sub-distribution space and its demise
20 CRN SOUTHERN AFRICA MARCH 2008
COVER STORY: DISTRIBUTORSSOLUTION PROVIDERS
There is nothing w rong wit h t he sub-distribution business model
provided certain business fundamentals are taken into considerat ion
such as cash flow management and stock control. Zand re
Rud olp h, Rect ron .
Any liquidation not just in distribut ion but in the IT channel is
worrying and not good for the well-being of the industry as a
whole. Arno ld Fourie, Pinnacle Micro Technolog ies
> p18
> 21Zandre Rudolph, Rectron
Arnold Fourie, Pinnacle Micro Technologies
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Signif icant grow th ahead forNet w orks Business > >
Gett ing stronger > >Poised for grow th > >
InsideInside
SMEcore focus
for Comztek
SMEcore focusfor Comztek
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COMZTEK: CORPORATE FOCUS
Paul Conradie, MD at specialist networking and IT solution distributor Comztek,
is upbeat about the countrys economy despite a downturn in business confi-
dence largely due to the high interest rates that the company has seen over the
last 12 to 18 months. There is no doubt in my mind that the market, not just the
IT sector, but in general, is reacting to the high interest rates, he notes.
Conradie says although industry pundits are predicting a slowdown in IT
spending this year, government remains by far the largest IT spender, which is a
positive sign for the whole industry. This, says Conradie, is an area that Comztek
would like to address with its army of resellers.
For Comztek, says Conradie, it is vital that the company together with its chan-
nel partners focuses on market segments that will augment their revenue streams
and profits in tough economic conditions. A significant part, we believe we can
play in this, is to improve the management of credit to resellers ensuring that their
payment cycles are better, he says.
SMB push
That said, Conradie says more focus is what channel partners can expect from
Comztek as their trusted distributor. He singles out government and the public
sector, SMB and the rest of the sub-Saharan market as segments that will receive
a lot of attention in 2008. For us, and certainly for our resellers, the SMB market
is going to receive a big push, he says.
He emphasises that the SMB strategy does not in any way suggest that the
company wont be paying attention to corporate and SoHo clients. Customers,
depending on size, use time differently and require different ways of interaction,
he says. The SMB strategy has been developed to understand these clients better
hence resellers that target this market will receive a number of options from us in
terms of how best to support, interact and understand the needs of the SMB mar-
kets and tailor those needs to their specific clients.
Product strategy
Although the channel was taken aback by Comzteks decision to enter the com-
modity space when it launched its Consumer Electronics Business Unit and took
on Fujitsu-Siemens Computers PC and server range, Conradie says it is vital for
resellers to know that when the company decided to expand into the rest of
Africa, it needed a product that would give it economies of scale. Networking
solutions have been our bread and butter from the start, but you cant sell a
complex networking solution, especially into the rest of Africa, before selling a
PC, he says. Venturing into the PC commodity space was a strategic move
which has really worked well for us here at home and in Namibia, Zambia, West,
East and Central African regions.
Looking ahead, Conradie is upbeat that resellers will benefit from the compa-
nys focus, especially in the SMB space.
Comztek s big SME pushDistributor upbeat about economy despite looming IT recession.
By Manda Banda
Paul Conradie,Comztek
Networking solutions
have been our bread
and butter but you
cant sell a complex
networking solution,
especially into the
rest of Africa,
before selling
a PC.
Paul
Conradie,
Comztek
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With best-of-breed brands that include 3Com, Cisco, Dialogic, D-Link, Envox,
Legrand. Linksys, MGE Office Protection Systems, Netshield, Nortel and
Packeteer, Comzteks Networks Business Unit is poised for growth in 2008.
Uwe Brandkamp, Networks Business Unit director at the distributor, says busi-
ness in 2007 was okay despite some drop off at the start of the year but picked
up well in the last quarter. This, says Brandkamp, was due to the erratic cyclical
nature of project business. Networks revenue contribution to Comzteks overall
business experienced a similar cycle although it was pleasing to see continuous
growth in the SME products and networks business in the rest of Africa, he says.
Brandkamp says Comzteks reseller partners can expect significant growth in
all the network product l ines, especially in the rest of Africa, VARcommercial,
SME and consumer markets. In addition, Brandkamp says the companys services
business is set to boom.
Brandkamp points out that the units UPSarray, SMB and consumer products
will receive a lot of attention this year because of current market demand for
UPSes as a result of power supply problems. O ur consumer and SMB products
are receiving more and more attention, he says. For the mainstream network-
ing brands there are a number of opportunities and projects we are working on
across various markets.
Remarking on recent acquisitions and merg-
ers in the IT industry, many pundits have said it
is a sign that the industry is consolidating,
Brandkamp says resellers should look at the
business benefits of the solutions they provide
to their customers and align themselves to ven-
dor partner programmes which will differentiate
them. Certainly, from our perspective, we can
help resellers to achieve this, he says.
Looking to the future, Brandkamp says dri-
ving the services business, continued focus on
the SMB business and partnering in project
deals will be top of the agenda in 2008 In
addition, we will be extending our reach into
the mid market with a range of innovative pro-
grammes for resellers, he concludes.
BUSINESS UNIT FOCUS: NETWORKS BUSINESS BUSINESS UNIT FOCUS: CONSUMER ELECTRONICS
Significant growth aheadfor Networks Business
By Manda Banda
Uwe Brandkamp,
Comztek
In addition, we will be extending our reach into the
mid market with a range of innovative programmes
for resellers, Uwe Brandkamp, Comztek
Comzteks entry into the consumer
electronics (CE) market should not
be viewed as a move to become a
broad-based PC distributor in SA
and the rest of the African continent.
On the contrary, the distributor
has ventured into the CE space as a
strategic move that has been largely
influenced by the emerging trends
in the Home, SoHo, Retail, SME
and Corporate markets.
Rapid acceptance of converged
CE products and the commoditisa-
tion of traditional IT products have
been key motivations for Comzteks
quest to become a strategic supplier
of end-to-end solutions.
Heinz Stephan, Consumer Electronics Business Unit director says Comzteks
plan is not to become another broad-based PC distributor but rather to
complement its existing product portfolio with quality CE products that meet the
needs of the companys customers in the Home, SoHo, Retail, SME and
Corporate markets.
Stephan says it is vital for reseller partners to understand that the company has
entered the CE space to provide them with quality products, solutions and ser-
vices that complement the companys other business units. We became actively
involved in the CE space following two key happenings in the IT sector, he says.
Rapid acceptance in certain aspects of CE products and traditional IT as well as
the commoditisation of most IT commercial products played a huge role in our
venturing into this arena.
He says it is for this reason the company has been very selective when signing
vendors playing in this space. Stephan says in Microsoft, Creative, Imation,
Fujitsu-Siemens Computers and Symantec, the company has brands that currently
fit its objectives. He adds that the company is continuously watching the market
and listening to their customers throughout Africa, looking to expand their foot-
print with additional blue chip brands. The CE space in SA has for a long time
been dogged by cheap, poor quality products, with after sales services lacking
he says. Thats why when we decided to enter this segment; we focus on quality
products, ease of use and superb technical services support.
All eyes on consumerelectronics
By Manda Banda
Value adding to Best of Breed Products iskey differentiator.
Comzteks UPSes, consumer networkingrange to spur growth.
Heinz Stephan
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BUSINESS UNIT FOCUS: SOFTWARE INFRASTUCTURE AND SECURITY & STORAGE
Growing stronger
If anyone ever wondered why Comzteks software infrastructure and Security & Storage
businesses have been successful and grown tremendously over the years, one needs
only to look at the brands that the distributor has in its stable.
Having secured distribution rights for Adobe Software, Attachmate, Citrix, Microsoft,
Novell and Virtualiron in the Software Infrastucture stable and Fujitsu Siemens
Computers, Marshal, McAfee and Symantec in the Security & Storage stable, Comztek
has moved from being a traditional networking solutions focused distributor to a
software distributor of note covering solutions that include operating systems,
networking software, infrastructure, server console, graphics and e-paper software.
By growing its software portfolio with key brands for the commercial market space,
Comztek has not only established itself as a solutions-focused distributor, but has also
catapulted itself into the top three bracket of specialised software distributors in SA.
Following the departure of Mark Dorfling and Nadine Barnard, the company is
delighted to have brought in the services of David Caygill, who is not new to the IT
distribution industry.
As Software Infrastructure and Security & Storage Business Unit Director, Caygill says
he will focus the efforts within the business units on assisting solution providers to
embrace holistic solutions selling enabled between the types of vendor brands carried
in the two business units. Strong vendor partnerships enable us to understand the
growth opportunities in the market and we have the infrastructure and skills to deliver
excellent service to our resellers so that they can realise their full growth potential. ,
he says.
Coming from an IT hardware background, Caygill says key in the software space is
to understand business fundamentals in terms of how software is renewed, how
businesses are licensing their software environments and software legalisation.
In addition, it is vital that Comzteks reseller base develops in all the solutions that
the company brings to market. To this end, we are encouraging our reseller partners
to cross-sell between the four business units, he says.
Caygill says that aside from the focus on growth and profitability, the company aims
to grow its footprint in the SME space and to deliver excelling service to its resellers in
both SA and the rest of Africa serving the ICT distribution market efficiently with its
basket of solutions.
Comztek hails software portfolio growth.
Strong vendor partnerships enable us to understand
the growth opportunities in the market. We have the
infrastructure and skills to deliver excellent service to
our resellers so that they can realise their full growth
potential. David Caygill, Comztek
By Manda Banda
David Caygil l
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BUSINESS UNIT FOCUS: COMZTEK ZAMBIA/ COMZTEK NAMIBIA BUSINESS UNIT FOCUS: COMZTEK EAST AFRICA
Having been set-up in August 2005, Comztek Zambia has grown its presence in the
Zambian market and company MD Mark Stokes attributes the growth to the formali-
sation and maturity of the IT market in that country.
Stokes says the last 18 months he has seen the company expand its foot print in
the Zambian resellers while at the same broadened its product offerings to become a
one stop shop. With the Zambian government having identified IT as key to further-
ing development, it will be soon before big networking and infrastructure projects get
rolled out.
The Namibian office provides and supports a wide range of premium brands that
include: Fujitsu-Siemens Computers, Legrand, 3Com, Cisco, Nortel, Siemens,
Netshield, Linksys, OPS, Imation, McAfee, MGE, Symantec, Creative and Microsoft
CPG. Comztek Namibia came into being in May 2004 as Comzteks first West, East
and Central Africa (WECA) regional office outside SA.
Davel Botha, regional manager for the distributors Namibian operation, says
although business has been strong particularly in the government sector, the company
is still faced with the IT skills challenge in the solution provider community.
Botha says part of the problem has been the fact that certification training
programmes are held in South Africa and most resellers cant afford to send their staff
to attend.
He adds that as the PC refresh cycle is nearing, resellers should be readying them-
selves to ride on this refresh cycle as it will create new sales and services opportunities.
Aside from the skills challenge, Botha would also like to see Comztek Namibia play
an active role in raising product, technology and services awareness to resellers.
By Manda Banda
Its been four years since Comztek Africa was unveiled as part of Comztek SAs
broader pan-African distribution strategy. In that time, the distributor has been able to
open branches in Zambia, Namibia and East Africa.
The EA branch, which is primarily a Microsoft distribution house has a significant
market share of the entire East African region covering Tanzania, Uganda, Ethiopia,
Rwanda and Burundi.
Robert Allela, regional manager, says being a Microsoft house in this region has
more positives than negatives. Microsoft is such a powerful brand and I am delight-
ed that we have a double-digit market share, and are poised for growth this year
and beyond, he says
Allela adds that despite the slow uptake of Windows Vista and Office 2007, he
remains positive that business in general will grow. I truly believe that hardware sales
will be spurred on by Windows Vista sales, he says.
Allela says growing Comztek East Africas business will depend on how the com-
pany builds it channel in Tanzania, Kenya, Ethiopia and Uganda. In addition, he says
developing a structured sales approach within the company and the channel, and
getting more partners will be top of the list of things to do.
He explains that the company is also working out a plan that will see it engage
more proactively with Microsoft in developing the channel and the initiatives that go
with it.
Allela says despite margin pressure on software and hardware sales, there are a
lot of deals in the telecommunications, public sector, government, education and
SMEarenas. These are areas partners need to be focusing on, he concludes.
Poised for growthBy Manda Banda
Partnering at local level
Davel Both a Mark Stokes
Robert Al lela
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BRANCH FOCUS: COMZTEK KZN BRANCH FOCUS: COMZTEK CAPE TOWN
CRN SOUTHERN AFRICA MARCH 2008 7
The last 12 months have seen Comztek SA KwaZulu Natal (KZN) branch grow its IP
Telephony (IPT) and wireless business.
Chris Davies, Comzteks KZN regional manager, says the main contributing factor to
the rapid acceptance has been the fact the saving is massive when businesses imple-
ment IPTelephony technology.
Of note, says Davies has been the leading role that SME have played in this. Our
resellers are telling us that there is a lot of deals and interest from SME clients in IPT.
Yet, amid all this reseller enthusiasm in the IPT solutions, the company is still faced
with the ever growing problem affecting most IT companies.
Davies says Comztek in the KZN has played a pivotal role in urging resellers to get
vendor training and certification and that is one sure way of becoming better business
advisors to their clients.
He explains that he is particularly pleased see most vendors put stringent requirements
on reseller certification as this has help them to develop in-depth technical expertise.
Looking to 2008, Davies says education and more channel education will be one of
the branchs focus with the channel. We will be enhancing our training efforts in the
KZN region. The training will be two fold and will cover sales and technical skills
enhancement programmes comprising real life hand-on approach, he says.
Aside from that, Davies is bullish that PC hardware sales should pick up later
this year given the fact that SA is experience power supply problems with most
people migrating from desktop PCs to notebooks. I also do believe that therelease of Windows Vista SP1 will have an impact on PC hardware growth in the
region, he concludes.
IP Telephony to
the futureIan Duvenage, Regional Manager at Comztek Cape Town is a firm believer in IT
solutions selling and not just box moving. It sounds simple, but putting this into
action and creating a win-win situation from a vendor, distributor, reseller and end
user point of view can be daunting in the local IT channel particularly if the mindset
is still that of box dropping.
Duvenage says the distinguishing factor in this industry is to be ahead of the game
and anticipate future or current hot trends and applications. In addition, he says there
is need to steer resellers in the direction where they offer holistic solution to their cus-
tomers and not just take orders. This is enhanced and achieved by Comztek through
providing leads, training, proof of concept, demo units, assisting resellers to get certi-
fied in order to receive preferential pricing and suggesting additional technologies
and alternative products to satisfy requirements at end user level he says.
Duvenage, who oversees the companys four business units in the Western and
Eastern Cape says currently the Software Infrastructure Business Unit accounts for a sig-
nificant percentage of companys overall revenue in the Cape while the second largest
contributor remains the Networks Business Unit, with the remainder being a split
between the Consumer Electronics Business Unit and Security and Storage Business Unit.
Duvenage says although the market in SA is definitely not buoyant at the
moment, with most resellers feeling the credit crunch in the channel, now is the time
they should be preparing themselves for the turn around. Due to pent up demand
and hopefully improved economic conditions, we will see the market turning around,
especially in the second half of this year, he says. This should be followed by hard-ware refresh cycles with Microsofts release of Windows Vista SP1 playing a huge
role in this.
Solutions selling
SMEs to pioneer growth.
By Manda Banda
By Manda Banda
Our resellers are telling us that there is a lot of deals and
interest from SME clients in IPT. Chris Davies,Comztek KZN
Delivering on the customer promise.
The distinguishing factor in this industry is to be
ahead of the game and anticipate future or currenthot trends and applications. Ian Duvenage,
Com ztek, Cape Tow n
Chris Davies
Ian Duvenage
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COVER STORY: DISTRIBUTORSSOLUTION PROVIDERS
could maybe be seen more as a con-
firmation that the local channel does not
have space for the sub-distribution model.
To this end, Fourie says Pinnacle Micro
has been following its normal approach to
its debtors and entire customer base. We
are cautious when providing credit and
believe we have a good system in place
that enables us to rate the viability of our
debtors, he says. We do trade in different
sectors such as government, retail and the
VARchannel so we are spread across the
industry and not too exposed to one sector.
Conradie adds that from a corporate
governance perspective, the distribution sec-
tor should, given current market conditions,
be more focused on the creditworthiness ofcustomers than 12 months ago. Load
shedding, high interest rates and petrol
hikes will have a negative effect on the dis-
tribut ion industry, he says. However, we
have seen such conditions in the industry
before. Proper management is important
during such circumstances.
Dilut ing distr ibut or margins
Conradie continues to say that history has
shown that the South African market can
typically support only two strong distribu-
tors, irrespective of the vendor brand. He
says any addition to the number of distribu-
tors has the effect that the weaker distribu-
tors disrupt the channel and ROI by chasing
existing deals rather than growing the mar-
ket through new transactions. The typical
result of this is that the stronger distributors
often have less money available to invest in
the brand, which ultimately harms the
brand in the long run. Therefore, the
long-term stability of a brand is more bene-
ficial than the short-term gain of a vendor
appointing a third or more distributors.
Conradie says regretfully, the main reason
for t he appointment of so many distributors
by vendors is the fact that multinationals
are driven by quarterly results and that
strategic planning is not taking place at
local level. He notes that multinational
brands at the higher end of the supply
chain are less prone to making decisions
that are more for mult iple distributors than
commodity-based vendors.
In addition, history has shown that some
distributors rely on a single brand for rev-enue and that when that brand is over dis-
tributed in the market, it can be one of the
main contributors to the potential demise
of such distributors.
Tarsus Spies agrees and says this has
been a bone of contention for quite some
time now and this most definitely affects
margins as well as the over distribution of
various brands. Certain mult inational ven-
dors have made their intentions fairly clear -
to reduce the number of distributors, he
says. This, he adds, is not a South African
phenomenon as various territories around
the globe are seeing vendors reduce the
number of distribut ion partners.
Saharas Naidoo adds that even though
SAs expertise and technology adoption is
world class, vendors sometimes ignore thefact that the local IT market is unique and
does not mirror most mature international
markets. He says the channel has seen
constant shifts in various vendors
distribution policies but ultimately, those
distributors best equipped with local knowl-
edge, expertise and relationships will triumph.
He advises distributors to adapt to
changing condit ions. Key factors to consid-
er include stock management, warranties
and services which must become more
efficient, he notes.
Fourie says each vendor has different
requirements for distribut ing its products. I
agree with the statement that multiple dis-
tributors can erode margin and that some
vendors believe they can grow market share
by appointing more new distributors to
achieve this for them, he says.
He emphasises that margin is important
and recent events bear this out but
distributors needs to add value for the
vendor. Our vendors are beginning to
understand that for a distributor to be
sustainable they need to make margin,
he says. Infrastructure costs money to run.He explains that some of the challenges
that come from operating in an African
environment include bad debts and
distance from the manufacturers of
products and as such require a different
cost structure to the European model that
some vendors are used to. The more
vendors understand the challenges the
more they see the need for margin, he says.
With most pundits expressing the view
that there is a need for the market to relook
at the entire sector, particularly the viability
and sustainability of IT distribution, there is
also a need for vendors to get involved and
address challenges that threaten the
well-being of distributors.
Addressing challenges that erode
margins in the authorised distribution space
could lessen the pressure that most local
distributors are subjected to.
Ultimately, consolidation in the channel
will have to happen to avoid diluting the
market and compromising the brands that
are over distributed. When this will happenonly time will tell.
Consolidation is not necessarily a problem; however, it all
depends on the execution of the merger and the effect of that unity
on the market. Paul Conradie, Comztek
CRN SOUTHERN AFRICA M ARCH 2008 21
Paul Conradie, Comztek
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ore companies are registered every year and
many businesses, especially SMEs, prefer
solutions that enable them to focus on run-
ning a successful business