Considered by many industry stalwarts to be the definitive South African IT distribution company, Tarsus Technologies celebrates its 20th birthday this month - 20 years of working successfully together with the channel in South Africa. This is a remarkable feat considering the volatility the ICT market has experienced over the past twenty years, weathering the market-storms of IT boom, dot com crash and finally substantial maturation.
Says Leo Baxter, Executive Chairman of MB Technologies and Tarsus Technologies (and Tarsus founder), "Looking back over the past 20 years and reminiscing on the industry`s good and bad times, there`s a great sense of accomplishment in knowing that Tarsus has continued to grow successfully, and continues to grow, even though we became the country`s top distributor several years ago."
Baxter says that few players will recall a time when the most successful IT distributor on the African continent was in fact not in the distribution market at all, starting out in life as a software development house that specialised in the movement of data between mainframe, mini- and micro-computers.
"While we had massive success with our MARS (Magtape Access and Retrieval System) solution, when the networking market became more established in the late 1980s we made a decision to move into broad-line distribution, coinciding with our acquisition by the Siltek group," he explains.
"Little did we know that this is where Tarsus would find its true niche," he adds.
With an affinity for distribution, Tarsus quickly became a force to be reckoned with in the market and started posing strong competition to other companies within the Siltek group.
"Tarsus was sold to Persetech in late 1992, shortly after we had introduced Compaq`s range to the South African resellers. The timing of this sale coincided with Compaq introducing its low-cost ProLinea and ProSignia line of desktops and servers, rapidly making Tarsus a household name in the IT reseller market," explains Guy Whitcroft, C.E.O. of Tarsus.
The relationship with Persetech lasted another two years and in 1994, when the Persetech group underwent a change of ownership, Baxter exercised his right to a management buyout assisted by Mike McGrath.
"Over the next few years Tarsus continued to grow, fuelled to a great degree by the excellent growth engine the company had found with its Compaq line of products. The success Tarsus achieved with Compaq later led the company to add the HP, IBM and Acer brands to its portfolio," Whitcroft adds.
On the back of the Tarsus brand and the numerous companies the management buyout had spawned, the MB Technologies group was formed and publicly listed in 1998.
"Despite the healthy revenues and good growth the MB Technologies group and Tarsus was experiencing, the market continued to see MB Technologies as a high-risk distribution business. Investors were led to believe by analysts of that time that distribution, as a business, would cease to be, due to the `disintermediation` the widespread use of the Internet would cause."
"Essentially, the market believed that consumers would begin buying directly from manufacturers and that the usefulness of distribution companies and the reseller channels used within the existing model would wane. But, just as customers aren`t prepared to go directly to farms to buy their fresh produce, and use supermarkets instead, the distribution and channel models still had a great deal of value to offer and are around today, healthier than ever," Whitcroft says.
"That fact did nothing to curtail the market`s perception however and after three years of operating as a listed company, the share price was still not reflective of the MB Technologies group`s strength. The decision was thus made to de-list the group in 2003," Baxter says.
While Tarsus` ownership has gone through numerous changes over its 20 year history, Baxter says the company was at all points managed and majority owned by its management team, even when it was listed. "This is undoubtedly one of the keys to the company`s success," he says.
Apart from that, Whitcroft says the company continuously analyses and re-evaluates its business practises and learns a great deal about the best operational approaches to running distribution companies from listening to its customers and talking to distributors, resellers and vendors elsewhere in the world. "That`s the reason the company is still the number one distributor in the country."
"Tarsus has also focused on being an incredible performer at all times," Baxter continues. "Over the past 20 years, the company has achieved year-on-year sales and profit growth consistently and furthermore, has managed to keep its growth figures above the 25% mark for the past decade or more."
"There are not many companies in the market that can testify to this kind of success, and with that as a precursor to the coming 20 years, there`s no doubt in our minds that the future will indeed exceed expectations," he concludes.
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