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Banking on cloud

Tony and Debbie Abrahall, First Distribution

A focus on cloud is a key part of First Distribution’s strategy.

With South African companies increasingly recognising the value of the cloud, First Distribution is aiming to further boost its revenue with the launch of the country’s first cloud services brokerage. The company is seeking to claim its stake in the local cloud market, which is set to grow to $229.69 million in 2014, according to IDC.

It’s a strategic move for First Distribution, which has built a portfolio of brands offering datacentre and cloud solutions to the SME and enterprise markets. Growth in cloud services is expected to continue at pace over the next three years, with analysts maintaining that it will double in size in that period.

The introduction of a cloud services brokerage makes sense for a company that also sells virtualisation, hosted applications, database and middleware, and security and network infrastructure.

We deliver solutions through a reseller base that has been built up over a 30-year history of consistent service and an approach that values resellers as our business partners,” says Debbie Abrahall, MD of First Distribution, a 23-year servant to the company. “Watching global trends, we’ve seen that cloud adopters are overtaking the competition. End-users in particular are beginning to demand cloud services, and businesses that don’t provide these will lag behind.”

Over the past six years, the privately-owned company has experienced an annual growth rate of between 30 and 40 percent per annum, remaining fairly unscathed even by the global economic downturn that negatively impacted many IT businesses.

“We’ve taken a business model, built over many years, and diversified our offering to take into account the rapidly changing needs of the market,” she says.

Planning for tomorrow

Abrahall notes that the company invests heavily in skills development, which – in addition to the company’s product set – she sees as a big differentiator. “We have a strong team of people who can develop solutions targeted at our reseller base, always ensuring that they meet individual client needs. It’s about analysing and evaluating our customers’ needs, making recommendations and engineering solutions that best suit their specific business environment.”

A 30-YEAR history

Founded in 1984, First Distribution had its beginnings in IT by writing backup software and designing a QIC-02 tape streamer interface card – now popular with vintage computer collectors. The TEAC tape streamer mechanism became the base for the Epsidon Tape Streamer Backup system, which was sold in Europe, Australia, the USA and to a lesser extent in South Africa. The high volumes sold led TEAC to propose that First Distribution distribute a wider range of products.

At the same time, the IBM brand grew to more than 50 percent of First Distribution’s hardware business. In 2002, IBM South Africa appointed First Distribution as a distributor for its software products. Three years later, it launched a networking business unit that, today, distributes cable, fibre and edge of network products.

An aggressive brand diversification strategy

The decision to represent a wide range of brands in the market began with the Samsung LFD distribution agreement in 2009. Today, Samsung is a substantial part of the company’s business with a large product range that complements First Distribution’s offering to its retail partners.

In quick succession, First Distribution signed agreements with Oracle for Oracle Hardware, followed by a direct agreement with VMware, having previously distributed its products via IBM. This agreement has enabled First Distribution to use its VMware skills with a new set of business partners that don’t sell IBM.

Thereafter, EMC and RSA were added to the portfolio, as were Veeam and Commvault, the latter two offerings forming part of First Distribution’s virtualisation ecosystem.

A hosting division was created with the signing of the First Distribution Microsoft SPLA distribution agreement, followed by a VMware VSPP hosting agreement.

“We have continued to aggressively expand our vendor portfolio, adding multiple brands over the last few years, including McAfee, Huawei, APC, Pivot3, VCE, LG and most recently, Riverbed,” says Tony Abrahall, general manager, First Distribution.

Looking to the cloud and beyond

In what he describes as a bold and exciting step in the history of the company, the launch of First for Cloud, Abrahall notes the opportunity for growth is massive.

First for Cloud enables customers to buy their own web stores – these are online partner branded shops that let resellers sell cloud services to their end-users. The First for Cloud catalogue includes cloud services from the largest global cloud providers, and resellers can chose which services they want to resell via their own branded web stores.

“Our aim is to help resellers get started on the road to selling cloud services as quickly as possible,” he says.

Expansion into the 15 countries that make up the Southern African Development Community (SADC) region is on the cards, he continues. “Following a six-year period of rapid expansion, we’re mindful of the need to consolidate now. We’ve succeeded in remaining relevant, particularly since we launched our cloud offering, and the next step is to develop a client base in the SADC countries by taking the successful model we have built and extending it.”

Pull quote:

“ End-users in particular are beginning to demand cloud services, and businesses that don’t provide these will lag behind.” Debbie Abrahall, First Distribution

Side box:

Brands represented

First Distribution represents a wide range of brands in the enterprise IT market, which include:
• IBM
• Oracle
• EMC
• VMware
• Microsoft
• Riverbed
• Samsung
• McAfee
• Veeam
• CommVault
• VCE
• Huawei
• LG
• Ruckus Wireless

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