computer reseller news sa march 2008

8/14/2019 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]

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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


12/52

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.


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


13/52


14/52

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.


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


15/52

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


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.


16/52

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



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


17/52


18/52

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.



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


19/52


20/52

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


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


21/52


22/52

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



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


23/52

Signif icant grow th ahead forNet w orks Business > >

Gett ing stronger > >Poised for grow th > >

InsideInside

SMEcore focus

for Comztek

SMEcore focusfor Comztek


24/52


25/52

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


26/52

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


27/52

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


28/52

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


29/52

BRANCH FOCUS: COMZTEK KZN BRANCH FOCUS: COMZTEK CAPE TOWN


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


30/52


31/52


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

>> 20


32/52

ore companies are registered every year and

many businesses, especially SMEs, prefer

solutions that enable them to focus on run-

ning a successful business

computer reseller news sa march 2008

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