Channel Chief
“We aim to be bottom-line driven”
 Within a year of operation, iValue InfoSolutions has made a mark as a serious value-added distributor. CEO Sriram S spoke to Ramdas S about the company's agenda for 2010
iValue recently completed a year of operations. What has been the experience so far?
Despite the fact that our debut coincided with the onset of economic crisis, we managed to survive one of the toughest markets. We are on track to achieve our targets. Today, we have 10 branches in India and one in Colombo. We plan to add more offices across the country.
Being a solution-centric distributor, we have high overheads. Since we had to dive head-first into a harsh economy, we realized the importance of being bottom-line driven. We now aim to be purely a bottom-line driven entity.
How do you differentiate yourself from other VADs?
Like most competent VADs, we manage channel programs, train partners and plot market opportunities. But unlike other mainstream distributors, we spend only 6 percent of our time and resources on core distribution and fulfilment. The rest is spent on customer and channel engagement.
Our contemporaries spend about 80 percent of time on distribution operations. But we do not focus on billing companies. This is what makes our business model unique.
For instance, we have a strong relation with at least 1,000 large enterprises. We are well-versed with their existing infrastructure and can also predict their IT investment plans. We work very closely with partners to identify opportunities, and scope, deploy and manage solutions. The ideal way to describe our business model is as a technology enabler with a channel route.
We do business with only 275 partners, who believe in our approach to selling. Our goal is to solve business problems of enterprise customers through a consultative approach.
Can you elaborate on your revenue streams?
Broadly, we have three revenue streams. First one is the classical VAD business, which contributes 35 percent to the total revenue and involves product selling. The second revenue stream involves building solutions around products we distribute. We call it Value Maximization Services (VMS). It accounts for 50 percent of our revenues. Third, value-added services (VAS), is mostly vendor-independent. We enable our Technology Partners (TPs) to offer these services. Presently, 15 percent of revenues are accounted by VAS. But we see the share growing. We recently launched a portfolio of 35 different services.
How do you enable partners?
Customers today are highly sensitive of ROIs. So, we focus on educating partners on technologies that offer high ROI.
Partners should have through knowledge of customers' businesses and challenges. We believe in solving business problems through technology. If a business problem is solved, then the decision maker will feel confident about the technology and the solution provider. So, we also advise our partners to work closely with CXOs and not just IT managers.
We have mapped around six verticals, and several micro verticals, and have built ready-to-use templates and Bill of Materials which partners can take to these markets.
Being a solution-centric distributor, how do you manage vendor relationships?
We are very choosy. In fact, we align with vendors based on demand forecasts from large enterprises. Thanks to our excellent customer profiling, we know exactly what fits in and where. We also keep a tab on the technology adoption trends. For example, virtualization, de-duplication and cloud computing are three hot technologies earmarked for large investments. So, we have been in talks with several vendors. Recently, we inked a deal with an automation and virtualization software vendor Parallels to address these opportunities.
We subscribe to both reactive and proactive approaches in business. To illustrate, since 26/11, there is a need for unified security solutions (both physical and IT security). We are helping partners pilot several projects in this area.
How is the VAD model evolving?
Niche technologies we sell today will be commoditized tomorrow. UTM appliances are a great example. Today, the entry-level appliances are offered at a rock-bottom price. Our focus now is less on sales of UTM boxes and instead on building solutions and services on top of it.
What happened to your plans to raise funds through equity sell-off?
This probably is not an opportune moment to dilute stocks. Our foray into services and our business model has impressed our bankers and we have been able to raise funds through loans. With stock markets doing well, we are hopeful that valuations will improve and it will be better to raise funds later than now. |