"Redington aims to become a true cloud solution provider”

Commenced India operation as a pure hardware solution provider, Redington has now forayed into the solution space. How you have transformed business over the years?

P S Neogi: We started India operations in 1993. Till 1998-99 we were selling only printers and accessories. From 1999 we started selling PCs, and then in 2000-01 we moved into value added distribution space. Till 2007-08, 70 percent of our business was volume business 30 percent were valued business. Today, almost 55 percent business is valued business and 45 percent business is a volume business. We have completely transformed as a full spectrum distributor over the years and now we are getting more into the solution space.

Which are the key business verticals in Redington India? Which verticals contribute high to the revenue?

P S Neogi: Our business is divided into four key verticals. The first vertical is Consumer PCs where PCs, accessories, print hardware and supplies are housed. Second vertical is Enterprise Servers which comprises Enterprise Servers, Storage Power Conditioned equipments and Networking products. Third is Software and Security and the forth vertical is Cloud and Solutions. Apart from that we have a sister company named Cadensworth India Limited which provides solutions in storage and networking. They have a strategic partnership with EMC. It is very difficult to differentiate between the verticals. We have a very large product portfolio and all our business groups are equally important for us. Now we are focusing on strengthening our Cloud business and we are investing heavily in the Cloud. We hope that tomorrow the Cloud group will be our star group and it will compensate the loss of revenue in the other groups.

What will be the business model of your Cloud business? Will you become a Cloud aggregator? 

P S Neogi: We are attempting to become a true Cloud solution provider. So one of the aspects of this business model is to aggregate all the world class cloud services and offer them though a digital platform for resellers and customers to login auto provision and consume services. We will provide monthly billing services to resellers and customers. It is more of IT as a Service (SaaS) model.

We are in the process of defining our role as a distributor in the Cloud space. We are determined to evolve a space for ourselves and niche for ourselves. Our aim is to be relevant to the vendors who are in the cloud space and be relevant to the partners who want to become cloud ready partners. We want to cover end to end what are the requirements so that Redington can become a one stop shop for all the partners who want any kind of support to migrate their customers to the Cloud. This process is evolving and we are putting in place the element required to execute the process. We are very hopeful that 18 to 24 months down the line, Redington will be known as the distributor which has been able to marry the Requirements of vendors and partners.

How do you forecast the growth of Cloud business in India in next 3 years? How Redington is gearing up to tap the business prospects in the cloud space?

P S Neogi: There are two aspects of the Cloud business. Transformation, learning and becoming ready to invest is one phase and the second phase is to build a module and start executing it. If one is not going to build his solutions and make him visible through the digital media platform he is not going to get new age customers. Similarly, Cloud is the one method of adoption of solutions or IT as a Service model and I am sure that it is taking its place in the industry today. We want to become a true consulting partner where if the customer does not need cloud then we should have the guts to stand up and say that he does not require investing in the cloud. We should suggest guide them and consult them and help with right adoption of the solution.

Will you have a separate set of partners who will take the cloud offerings to the end users? Or the existing partners will offer Cloud solutions?

P S Neogi: There is already a segment of partners who are cloud ready like hosting partners and manage service providers. We will cover them in terms of a wide spectrum of solutions we want to sell. We will also have an engine called Redington Cloud Academy, where we would have an enablement of this transformation and learning as a module for the VARs to come on to the cloud business model.

Apart from Cloud, are you intended to foray into the IoT and Data Analytics space?

P S Neogi: Of Course yes. Depending upon the workload industry situation we will definitely have those offerings as well. It will also become an integral part of our solution business offerings.

Being a veteran in the industry, you have closely witnessed the transformations in the distribution business? What are the key trends to you identify in the channel business?

P S Neogi: Most distributors are aware that the era of box selling is over. Earlier, only Ingram and Redington were known as the value added distributors. Now all distributors have added that factor in their business. Now more and more distributors are moving into the value added distribution in their own ways and trying to provide their unique solutions. All distributors are looking at what extra they can do for the vendors. It is not only the solution oriented approach but it can be a market oriented approach and that is the biggest change I have seen in the distribution business.

Being a prominent IT distributor, how do you address the E Commerce factor?

P S Neogi: It is a very difficult question for us. E Commerce affects the business of our partners and ultimately our business. So we both are in the same boat. We do not provide products to e commerce to sell at a cheaper rate. The irony is that E Commerce partners have provided the market space and some of our own partners are selling the product on the online sites. We feel that it is an evil we have to live with and we are with the partners. However, boycotts will not solve the problems. E Commerce companies are not looking at profit making. Once they will start looking things will settle down. We are going through a churn and solution will come out.

What are the key growth areas for Redington in the next fiscal?

P S Neogi: We will be focusing more on developing our solution selling capability in the software and security space and commercial enterprise space. We will work very hard to make sure that our Cloud portfolio and offering is complete and ready in a useful manner to vendors and partners in next 6 months. That is our immediate concern. We are making the required investment in that segment and you will find a lot of activities from Redington in next 3 to 6 months.