The South African IT distribution channel has become "a scary place" due to the stronger presence of international companies and the slashing of margins, says Grant Poulton, MD of Cape Town-based Lightedge.
"International companies are probably our biggest competitors now and we hardly ever run up against local original equipment manufacturers in bids. Margins, especially on hardware, which were already tight at between 3% and 5%, are being squeezed even further," he says.
Poulton was speaking after the opening of Lightedge's new R35 million IT centre in the Cape Town industrial centre of Paarden Eiland last night. The centre was opened by King Goodwill Zwelithini.
Poulton says the changes in the distribution channel prompted Lightedge to change its strategy from a traditional hardware distribution model to supplying the valued-added services that go with the hardware.
"We have had to build up our own capacity to sell more sophisticated products such as blade servers and fault tolerant servers and that means we have had to invest heavily in training our staff," he says.
Poulton says the changes to Lightedge's strategy have generally been well received by its dealer base, particularly those who have recognised that end-users have more demanding requirements.
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