Disti Summit rocks Ramoji

Hyderabad

May 5, 2008

India's first ever summit for regional and sub distributors, Disti Summit,
organized by The DQ Week, saw 90 delegates from across 25 cities in the country
congregating at the in Ramoji Film City in Hyderabad. The Disti Summit kicked
off with a keynote by Jitendra Kulkarni, who was earlier CEO of Redington India.
He exhorted that sub-distribution was not dead and that regional and
sub-distributors could increase their profits if they made minor tweaking in
their daily routine.

Kulkarni, who now heads Winspire Solutions a company that makes ERP solutions
for the distributors, said, “The problem with most of the sub-distis is that
they have no control over the credit that they get and policy enforcement. There
are pending and outstanding payments and no one is tracking them.”

Traditionally he said that the distributors sustained financial viability
because of high growth rates, better economies of scale, relatively higher
margins and addition of major product lines. However, all this has changed and
now there is intense competition among vendors, which is squeezing the supply
chain margins.

What needs to be done

To make the most of the sub-distribution business Kulkarni propagated that
the owners must get involved to drive performance in the company. He said, “The
best thing is to keep looking for alternate business models. Also do not park
most of your business with one vendor. Spread your portfolio to increase vendor
numbers, because if you bank more than 30 percent of your business with one
vendor and if that vendor company hits a rough patch, your business will go for
a toss.”

According to Kulkarni the three essentials for scaling up distribution
business were, “Strong information systems and processes and clear
organization structure. These are important when you are thinking of scaling
your business. “

Elaborating about what could be the options for alternate businesses Kulkarni
said, “There are a lot of things that you can do. Firstly you can look at
becoming tier-one distributor for smaller vendors or niche products. Then there
is the option of graduating to the next level and becoming a regional
distributor."

Sub-distributors could also think of launching their own brand. Retail is
another option apart from expanding in adjacent industries like telecom,
consumer electronics, white goods and mobile devices.

Adding value

After the keynote there was a panel discussion on 'How to add value to
your customer'. The discussion that was moderated by Prasanto Kumar Roy, Chief
Editor, The DQ Week had a panel which included Sanjay Sharma, VP-IT Division,
Samsung India, Arunava Chakrabarthy from Microsoft India, Anil Mhaske, CEO of
Pune's Data Care Corporation and Chennai's Rakesh Jain, CEO of Supreme
Computers.

Taking off from the keynote the discussion centered around how
sub-distributors were getting bogged down by policies set by vendors and
national distributors. It tried to throw up avenues to scale up
sub-distributors' work. A lot of participants felt that vendors are usually keen
on pitting one partner against the other so that no one grows and everyone keeps
doing their business.

Another discussion that saw heated debate amongst delegates and panelists was
on 'Fund Management'. Moderated by Vinita Bhatia, Executive Editor, DQ
Channels the panelists included Jitendra Kulkarni, Keshav Madhav from Vidur
& Company, New Delhi, Umang Mehta from Roop Technologies, Mumbai and Rajesh
Saboo from Saboo Computers, Kolkata.

When someone from the audience pointed out that vendors are usually dumping
products at the end of the month at whatever price the partner wants. But the
same vendor refuses to listen to them for the rest of the month. Madhav however
insisted that a partner can define his price and product volume to the vendor.

Giving his own example he said that he had done that with a vendor and
refused to do business until the vendor agreed to his terms. Said Madhav, “It
was a difficult task and not easy but it was something that was clearly doable.”

Disagreeing with him was Ketan Barai of Kaybee Infotech said, “It is
probably possible for bigger players in the market but usually vendors did what
they thought was best. For most of the month they dictated the price and the
volume and only when it was the month end and their sales targets are not being
met, that they give the partner the price that was initially asked for in the
beginning of the month.”

Partners from upcountry location felt that while vendors would always keep
saying how important the market and sub disti were to them, they do not do
anything for their benefit. Many partners however, felt that the discussion
would only be viable if vendor company like HP participated along with national
distributors.

Growth in IT market

The last session of the day was by Sanjit Sinha, Associate VP-Research,
IDC India who talked about the domestic IT market and the beginning of growth
2.0. Sinha said, “In 2006, the domestic IT market grew by 22.5 percent, ITeS
by 65 percent and exports by 30 percent, leading to an overall growth of 28
percent.”

Talking about the segments that are likely to grow he said, “Healthcare,
banking, financial services, health insurance, retail and transportation were
the segments that would show most traction. “

Summarizing the growth points Sinha said, “Firstly identify the structural
shifts and align yourself holistically. The key drivers in enterprises is
dynamic IT. Evolve your offering in line with the three layers or three
operating principals of dynamic IT. Have patience with the consumer markets.
Moving beyond certain segments/ verticals/ geography is the need of the hour and
lastly you need to keep an on the developments in the economy and seriously
devise a plan to handle manpower attrition and rising salary costs and increase
productivity.”

The day also saw presentations by Samsung India, Microsoft India, Su-Kam,
Delta Energy Systems, TVSE, Supertron and Gigabyte who were the sponsors of the
event.

After a hard day of sessions, the evening was reserved for some fun and
music. It started off by a presentation from Xerox. After that partners were
entertained with some fabulous Bollywood dances and acrobatic acts. The party
which rocked till the wee hours of the night saw partners taking to the floor
and jiving away to the dance numbers belted out by the resident DJ. The
highlight of the evening was a performance by Rakesh Jain of Supreme Computers
Chennai who sang some soulful ditties of Kishore Kumar.

Most of the participants were already looking forward to the next Disty
Summit and had requested The DQ Week team to keep them posted on the dates, so
they could be there without fail.