Annex IBM division readies itself for next round

The IBM-focused division operating within the Annex Distribution fold is buoyant. Business has been very fruitful of late and there is a strong sense of determination to extend the reach, transfer the value of innovation and generate greater awareness around new product and a fresh approach to market.

Shane Kennedy, IBM division manager at Annex Distribution, says the unit is ready to enter into phase two of its overall development now that it has successfully identified its core market and related key requirements.

"I believe we have reached the point where we understand the market we are playing in and we have pinpointed our market niche with IBM, not only in terms of the customers that we are reaching, but also in the products that we are buying and selling," he says.

Kennedy describes the local market as being "relatively price conscious" and one of the key issues at the moment, he believes, is barrier to entry when there is a significant move towards a specific trend - the decision to go completely mobile and move away from desktop, for example.

"People have to accept that there is a price difference and this can be a challenge. Consumers have become a lot more selective in terms of what they buy and what value they are actually getting for the investment. They are aware of the current and emerging technology trends and how these can influence decisions," adds Kennedy.

One of the division`s primary objectives, from the outset, was to change certain misperceptions around IBM in general and simultaneously reach previously untapped market segments.

And it is here where the division has made significant progress.

"We are now reaching customers who would ordinarily have opted to go with other brands," says Kennedy. "IBM is a lot more accessible in the minds of consumers. There is a real opportunity to expand on the base we have now. One of the more significant legacy issues of IBM has been the fact that market perception of IBM has dwindled...there has always been a mass of active dealers, but a very small percentage of them were actually buying IBM. Our strategy is to really push IBM to our dealer base and widen our reseller base. This is working well."

It is this proactive mind-shift within the business as well as the company`s decision to market the brand more aggressively and help create further demand that has helped to create a very positive climate of change within the division.

Kennedy says it`s time to develop the base and raise the brand`s profile. He is quick to point out the role of distributors in this regard.

"We need to partner with the right people and actively market product. Our target is to solicit commitment from key resellers and focused niche retailers," he adds. "IBM South Africa has always been a strong company with a focused, fast-growing brand. In the past there may not have always been sufficient marketing and market awareness around the PC and notebook market, but this is turning around quickly. The move with Lenovo is already making a substantial difference and has made it a lot more aggressive and focused."

Kennedy believes the local market can look forward to a vastly different IBM presence in the near future.

"From unit volumes increasing to price points coming down to more retail and consumer-centric products...the partnership with Lenovo has opened up a host of new opportunities and access to new customer, end-user product. This will be reflected in soon-to-be released offerings. The change with Lenovo has been very smooth and has not impacted on business processes and technology availability at all. This has been a development in line with market changes and consumer demand."

This reference to a vastly different technology market was reiterated by Nick Donofrio, Senior Vice-President, Technology and Manufacturing, IBM Corporation, during a recent visit to SA.

In his presentation Donofrio expanded on several nanotechnologies, including carbon nanotubes, millipede storage, spintronics and molecular cascade, that are in development and which IBM hopes to take to market soon.

Donofrio suggested that while technology leadership is fundamental, invention alone is simply not enough. There has to be a transfer of knowledge and technologies in order to drive productivity and economic growth.

"We aim to position ourselves at the forefront of this development and we believe our alliance with Annex Distribution will certainly prove, as it has done to now, to be a strategic advantage," adds Kennedy.