Introduction
Building on its long-established foundation of business-to-consumer (B2C) distribution, Corex has set itself a three to five year target of becoming one of South Africa’s most recognized brand names, and a key player in a burgeoning market replete with untapped opportunities – that of business-to-business-to consumer (B2B2C) distribution.
For the management team at Corex, which has a clear vision of where the market is going, the reasons for focusing on B2B2C are manifold but stark: distribution, as it currently stands, is stagnant.
Profitability and growth opportunities in the channel are shrinking by the day, diminished by a feeding frenzy of tradition-bound distributors, vendors and other players who seem intent only on box-moving and have little or no ability to cater for a market that thrives on change or challenges.
The conventional distribution model has become both convoluted and commoditised. Margins have been pressed from all sides.
IT products have become commoditised and the same product is available from a number of distributors, none offering any significant differentiation in products, services, sales, or backup. There is no variety; everyone is competing in the exact same space with the exact same product. Now a customer is nothing more than an account number, and the only part of a relationship is the order-taking process.
In addition to this, many multinational corporations (MNCs) are going direct, and are also pulling retailers into the struggle.
Disrupted by activities of the MNCs, the distribution market now focuses wholly on meeting targets and margins. Even major players are desperately trying to make money from the chump change foisted on them.
In 2012, South African distribution is an industry stuck in an infinite loop. Most players are doing the same thing while expecting different results, a trend that will continue. Consolidation is only set to continue, and the market looks set to shrink and possibly even implode if that trend continues.
Corex will change everything
But it’s not all bad news for players prepared to face the challenge. With our new focus, energy and enthusiasm, Corex will change the way people think about distribution and doing business in the channel.
Again, drawing on many years of doing business in distribution, Corex – in setting itself a three to five year plan to become a well-recognized South African brand name – is also driven to reinvent the channel.
At Corex, we believe you don’t only have to be a traditional box mover in the distribution arena. There are countless markets to expand into. And B2B2C is one way forward to save the industry.
We are determined to change the direction of the distribution market for the better. We will keep the channel alive.
Showing that we have a clear vision of the way forward, we can also demonstrate that South African distributors can be more than the box movers they are currently.
At Corex, we’re proposing new business platforms and new ways of doing business, and we’re working very closely with resellers, system integrators, and other companies to focus on the many lucrative – but mostly untapped – segments of the B2B2C arena.
Opportunities in the B2B2C arena
What is business-to-business-to-consumer (B2B2C)? The “consumer” element here is different from the conventional one we speak about when referring to B2C, where it refers to the average man-in-the-street, who is shopping for single-box, consumer or commoditised products.
B2B2C revolves around business and solutions. And led by a management team with a clear vision of the road ahead, Corex is currently building solid local and international partnerships that provide solutions for corporates, SMMEs, retail chains and stores from all industries – including those active in banking, medical, motor, government, education, security and other sectors.
In South Africa, these partnerships will draw in system integrators, resellers and other channel players who have also come to realize that the traditional distribution business platform is a road to nowhere, with little or no prospects and diminishing returns.
Not only will Corex deliver the buying power required by local partners, but we will also provide a level of technical expertise, project management and other services that no other distributor or vendor can supply.
With the solid backing of Corex, local systems integrators and other players can provide more value to their customers, since they will only need to focus on what they already know.
On a global level, Corex will continue to build partnerships with key international brands, working closely and not only drawing on their product lines, but also on their skills and expertise, and sharing this with local partners. Our international partners have been carefully selected for their global strengths and because they are entrenched, long-established leaders in their fields.
Corex and B2C
Consumer Electronics
Few markets are as challenging yet have as much potential as today’s consumer electronics arena. The drive from analogue to digital has greatly improved both the quality as well as the affordability of the multimedia digital experience.
While there clearly is room for improvement in South Africa, the increasing access to first-world high-definition (HD) media provided by broadband Internet services backed by the expanding undersea cable network infrastructure has become easier, more cost-effective - and more rewarding for consumers.
In the in-home entertainment market, pricing of flat-panel TVs continue falling every year, and large screen HDTVs are showing up in more and more homes.
Two other key local trends are pushing HDTVs into the mainstream in South Africa:
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High-Definition (HD) content available through broadband and satellite services like DStv
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The ready availability of HD content and increasingly cost-effective Blu-ray players.
As a result, consumers from all walks of life have started demanding the complete theatre experience in the convenience of their homes.
Another major trend is the convergence of media and data. While once we had two very distinct camps – the first, data-centric devices such as PCs and the second, media-centric devices such as TVs and media players – today’s consumers demand products that can handle both.
With the steady emergence of a new generation of consumer gadgets that cater for both media and data on the same platform, many traditional data-centric companies have entered the consumer market, leading to fierce competition for traditional consumer brands.
To stay ahead of the competition, consumer manufacturers must constantly enhance their products and support emerging technologies.
Sony, LG and Samsung are Corex’s main global partners in the consumer electronics field.
Gaming
Gaming is a performance driven, hardware focused market, with consumers that are both knowledgeable and competitive. Consumers utilize PC and Consoles to “game” and Corex has an extensive portfolio of leading gaming brands to cater for these users.
Modern gaming has evolved into a tight balance of both aesthetics and performance, because gaming is no longer simply about having a high performance system. Corex, along with its partners such as Thermaltake, AMD, MSI, Creative, Genius and Corsair, are able to supply gamers with every possible piece of equipment they can dream of.
Corex has also got a plethora of modern console systems and accessories to compliment these systems, providing users with extensive choice.
MSI, Thermaltake, TT eSports, Leadtek, Creative Labs, Genius, Corsair and AVerMedia are some of the global partners that Corex works with in this segment.
Computers
Computers are moving into verticals, being more purpose built and focused, for markets such as Gaming, Rendering, Workstation, Business and Medical, School, Government and more. Desktops, Notebooks and All-In-One Computers are the mainstay for this segment covering everything from portable computing platforms to powerhouse rendering and processing machines.
These products are becoming more and more ubiquitous and popular with users now looking for computers that do everything while taking up as little space possible but still having the raw power of a desktop. PC’s are showing resurgence in demand and are now becoming more and more sought after for purpose built roles by users who understand more about their needs.
Corex proudly distributes Sony, Samsung, LG, MSI and partners with Acer.
Mobility
The ability to be unchained from the office has been there for many years, and mobile computing is at the forefront of the on-the-go productivity.
With the launch of the Ultra-books, and the continued penetration of Tablets, truly portable computing is fast becoming more and more ubiquitous, with people being less contained within their office environment, and with much more freedom.
With the solutions available today, the question has no longer “What can you do away from the office?” but “What can’t you do?” Smartphones are also more powerful and can do more than ever before, and are the perfect companion for any mobile office, making users truly untethered and truly connected.
Corex is at the leading edge of mobility, with offerings from Sony VAIO, Samsung, and Acer both in the consumer and business space and proudly distributes Sony, Samsung and is a proud distribution partner of Acer.
Corex B2B target markets
Industrial PCs
Industrial PCs range from component-driven solutions to full automation.
Underscored by the emergence of fail-safe systems PCs, the market for industrial PCs is driven by an increasing rate of technological advancements in hardware and software providing both increased computing power and increased ruggedness.
ARC Advisory Group has earmarked 2012 as the boom year for the industrial PC market. Not only is industrial PC technology itself maturing, but new applications and requirements enable differentiation through hardware and software.
In South Africa, the market for Industrial PCs will only grow in coming years, bolstered by the demand for more sophisticated systems with greater capabilities that allow local companies to achieve international quality standards.
Corex partner Advantech is recognized globally as one of the key PC specialists focusing on this arena.
Servers
Gartner says the introduction of new processors from Intel and AMD – which is fuelling the next round of server replacement cycles in 2012 – will see the server market growing this year, building on the seven percent increase seen in global server shipments last year.
Worldwide server growth is driven by mega data centers, cloud infrastructure deployment, and the explosion of client devices, such as smartphones and tablets that need to access Web content.
Another growth trend is taking place at the entry-level server market, where there has been a marked increase in the deployment of more cost-effective smaller form-factor systems.
The blade market will also expand this year, with blades remaining a strong point and continue being a driver of growth for the server market. IDC reports that the blade server category achieved both its highest reported revenues and revenue share in the fourth quarter of 2011.
As they are a strategic footprint in the datacenter and important for vendor revenues and profitability, the research group argues blades should be a key element in any product portfolio. A converged blade platform is an opportunity for additional pull-through revenues beyond the server, including storage, networking, software, and services.
Corex’s major partner in the server arena is Super Micro.
Networking
In 2012 and beyond, universal connectivity is where it is at -- whether it is mobile, DSL and other IP-capable technologies from a broadband network, or from the corporate network.
Green networking is also increasingly important, with energy efficiency a critical aspect in the worldwide march to contain companies’ power and cooling requirements, as well as their carbon footprints.
While Corex supplies solutions in all networking segments, key areas include telecommunications, switches, and wireless.
In the telecommunications area, broadband ADSL and triple-play or telephony, broadband Internet, and IP TV - continue to be major buzzwords, with IP-only data networks presenting major challenges to traditional voice networks.
Providing an idea of exactly how major these challenges are, Ovum says that globally, revenue from voice services will fall 8.4 percent from $663 billion in 2010 to $608 billion by 2015, while international revenue from data services are set to increase 10 percent from $907 billion in 2010 to $1 trillion.
To increase their revenue and margins, while catering for the burgeoning demand for bandwidth, the telecoms market currently focuses on providing the building blocks that allow telecoms players to move away from copper and build ubiquitous, future-proof broadband networks based completely on IP technology.
At the same time, the telecoms industry is also making provision for data centralization and data centres with the creation of IT infrastructures that use cloud computing, and modernizing operations support systems/business support systems (OSS/BSS).
Another key telecoms growth area is that of Next Generation Network (NGN) services – from the core to the edge of the network. Demand for differentiation will only increase, as service providers invest in solutions that allow them to brand and bundle new services, achieve operational cost reductions, and strategically position themselves.
NGNs revolve around such key technologies as hybrid fiber coax (HFC), asymmetric digital subscriber loop (ADSL), wireless, IP as well as asynchronous transfer mode (ATM).
Triple play – and the expansion of more cost-effective broadband services – could have a major impact not only on consumers’ lives with IP-based entertainment, but also in other industries. These include business, with unified communication; e-health with e-medicine and remote caring, security with remote control surveillance, and e-learning. The future is hyper‑connected, and offers huge potential for companies prepared to invest.
Meanwhile, like never before, continuing competition both locally and globally has made the corporate network a key corporate asset. With the support of a solid network infrastructure that reduces operational expenses and improves performance levels, employees can access and disseminate key market and competitor information in no time at all.
But increasing demand from users will put networks under immense pressure and increase risks, particularly in light of the BYOD (Bring your own device) trend, which is set to grow in years ahead.
From high-end telecoms down to end-user wireless, all of these developments present a wealth of opportunities for players in all segments of the South African channel.
ZyXEL is Corex’s major networking partner.
Digital signage
Another lucrative but largely immature, untapped market that hasn’t been fully exploited by the local channel is that of digital signage.
With convergence and one-to-one communication becoming pervasive, digital signage leads the charge. At its most basic, digital signage involves the use of today’s latest-generation technology to disseminate messages previously broadcast through traditional media such as TV, posters, and other similar media.
Benefitting from the explosion in social media and mobile engagement in the market, the technology also promises to be both more personal as well as more interactive in coming years. Indeed, analysts regard digital signage as a key activator for mobile engagement.
Digital signage is well on the road to becoming mandatory in the retail world. A recent Harvard Business Review articlesaid that for traditional retailers to survive, they need to pursue a strategy of “Omni channel retailing”, defined as “an integrated sales experience that melds the advantages of physical stores with the information-rich experience of online shopping”.
This clearly indicates the dominant role digital signage will play in tomorrow’s retail space, where
It will start by incorporating a network of displays that are remotely managed and provide pertinent and timeous merchandising and advertising information.
And with touch playing such an important role in other consumer experiences – on mobiles and tablets, and with its march to the mainstream when Windows 8 launches – touch-screen technology will become an even more important part of the retail digital signage equation in 2012.
As in other sectors of marketing, audience tracking, lead-generation and data analysis are vital. One of the key trends in digital signage in 2012 is the onset of measurement metrics, such as anonymous video analytics (AVA), that allow management to measure both the ROI of their investments as well as the being able to test and evaluate alternatives in near real-time.
But besides traditional venues such as grocery stores and restaurants, digital signage continues to expand to such locations as health clubs, schools and universities.
Waiting areas in pharmacies, healthcare institutions, call center and support organisations, as well as in offices are using digital signage to present a high-interest, highly-effective, controlled message.
Using digital signage, companies are increasingly using digital signage to feed from their intranets and deliver company and industry information, as well as to enhance their training and education.
For analysts, another dominant 2012 trend is the emergence of partnered, consolidated and bundled solutions.
With brands and agencies not having the time or skills to provide all the answers, the digital signage industry is looking to serve up total solutions, acknowledging that technology-only bundles are not the answer and fully-integrated partnerships are needed.
To cater for such demands, the Corex digital signage portfolio includes kiosks and video walls, as well as value-added services, from retail management, content creation, and installation, to system configuration, network design and deployment.
Distribution partners include Sony and Samsung.
Point-of-sale
2012 sees Corex continuing its ambitious programme as a point-of-sale (POS) distributor, and provides a comprehensive portfolio of solutions, consulting services, outsourcing and network security for the hospitality, retail, as well as the food and beverage (F&B) industries.
Once limited to only the largest retail stores, POS has become more cost-effective than ever before, enabling smaller businesses to benefit from increased customer satisfaction, improved inventory management, and reduced shrinkage.
POS systems do not only cater for cashiers; self-serve retail POS systems using touch-screens, scanners, and payment acceptance mechanisms will also see a dramatic uptake in coming years.
Corex is the South African distribution partner for global names such as Partner Tech and Champtek.
IP Surveillance
Digital security surveillance is a fast-growing new market replete with possibilities, particularly in South Africa.
Driven by the requirement for remote redundancy of video data, plug ’n play installation, remote access to video and lower costs, this market picked up in 2011. Key vendors reported remarkable growth in a market segment that jumped by some 30 percent last year, reports IMS research.
The transition to IP surveillance is well under way, as a growing number of security customers manage video both from traditional platforms, such as PCs, as well as new platforms, such as tablets and smart phones.
Besides wireless technology, which looks set to be a major growth area in the CCTV and video surveillance industry over coming years, another potential growth sector is video surveillance as a Service (VSaaS), also known as cloud-based video surveillance.
In coming years, there will also be an increase in bleeding-edge but cost-effective video surveillance technologies such as thermal security cameras and high-definition (HD) video.
IMS Research says image quality is a major focus for vendors this year. But there will also be further advancements in well-established areas of need, such as low-light capability and wide-dynamic range.
Although HD may be the buzzword in the consumer electronics arena, research indicates standard definition network cameras are still outselling their higher resolution counterparts at a factor of four to one. And, while analysts believe that HD and megapixel cameras will represent only 30 percent of network security camera shipped this year, more than 60 percent of network security cameras will be HD by 2015.
Another new technology is that of video content analysis (VCA), which is driven by the increased processing power in off-the-shelf computers or embedded in video surveillance devices such as network cameras and encoders.
For Corex, target segments include video analytics, home automation and access control, and partners include market leaders such as Brickcom, Vivotek and Geovision.
Storage
With data coming in from all departments – sales, accounting, marketing, and so on - businesses continue to produce larger volumes of data than ever before. There’s also greater demand for improved storage performance with higher levels of security and scalability to feed all those applications that support business growth.
Vendors have responded by, amongst others, delivering newer enterprise-level solutions that feature solid state disk (SSD), automated tiering, cloud, storage virtualization, dynamic or thin provisioning, dynamic tiering, and archiving.
Pressurized by convergence and an enormous increase in content from new sources, including user‑generated information platforms based on mobile applications and social networks, businesses will increasingly focus on “big data” and need to contain it securely and efficiently, which presents immense opportunities for skilled systems integrators and VARs.
In 2012, says Forrester Research, companies have to change their way of planning for storage and storage growth; many don’t do this well – if at all. It is no longer a one-size-fits-all scenario, which means suppliers need to be able to provide the skills and expertise required to meet each company’s differing requirements and needs.
Forrester also believes 2012 will prove to be the year that cloud storage is finally seen as a viable option for enterprises. While this holds interesting challenges in the South African context, opportunities for skilled systems integrators are manifold.
QNAP, with its wide variety of storage products – and its eye on taking the top spot in the Network Attached Storage (NAS) market – is our major storage partner.
Energy
It should go without saying that energy is top-of-mind for all South African businesses. Corporates continue to look at ways to contain their power consumption and energy costs.
It will soon also be compulsory to present documented green credentials that show how much a company has cut down on its carbon footprint.
And – of course – it is critical for any local business, no matter what market segment it is in, to be able to plan and provide for inevitable power-outs, which could increase in coming months and years.
Renewable energy
Green will continue to be the most talked-about topic amongst local companies in years to come. For many, the voluntary Energy Efficiency Accord kick-started the process and, according to the Carbon Disclosure Project, worked well to set expectations for corporate behavior, but may have been insufficiently ambitious.
The publication of the South African Climate Change White Paper in October 2011indicated that carbon budgets, with carbon taxation and emissions trading schemes, will be imposed on companies within the next two years.
Green computing will then become increasingly mandatory, not the marketing ploy it currently seems to be.
Besides the Corex focus on green computing in such traditional IT markets as servers and networking, as well as on cloud computing, we also see tremendous opportunities in alternative power sources, such as solar energy.
Playing a growing role in providing for energy demands not only in business but also at home, solar energy will have a profound impact in coming years.
South Africa is ideally suited to using the sun as a renewable source of energy. Industry analysts Frost & Sullivan has described the country as a “gold mine” when it comes to solar energy. According to a UCT study, the annual 24-hour solar radiation average for South Africa is 220 W/m2, compared with 150 W/m2for parts of the US and about 100 W/m2for Europe. Almost the whole of our interior of the country has an average insolation of more than 5 000 Wh/m2a day.
The potential of solar energy is also recognized by the South African government, which last year finalized the Integrated Resources Plan, its 20-year master energy project, with solar photovoltaic emerging as the distinct winner.
While it will move to the mainstream in coming years, Frost and Sullivan said solar photovoltaic is still limited to off-grid usage in telecommunications, game farms and isolated lodges, rural applications, navigational buoys, and other such applications.
But companies have also been using solar photovoltaic as a marketing tool to showcase their clean energy trends, while several municipalities have been experimenting with using solar photovoltaic for road signage, street lights and billboard illumination.
There’s no denying the enormous potential of solar energy and photovoltaic technology in South Africa, and Corex is intent on working with both local and global partners to take a lead in this potentially rewarding market.
UPS
Ongoing electricity issues in South Africa have made the uninterruptible power supply (UPS) a vital – if not mandatory – part of any corporate IT set-up. Not only must sensitive electronic devices be protected from Eskom’s notoriously unreliable local electricity power, but there is also decreasing acceptance of downtime by corporate users.
In addition, with more IT infrastructure moving into the data center, standards for computing and data storage reliability and protection have increased substantially.
The UPS market is addressing all of these needs with an even stronger focus on efficiency, including more transformerless designs. Advances in battery technology are also benefiting UPS products by reducing cost and floor space requirements.
PowerCom is Corex’s main global partner in the energy market segment, focusing both on green computing and the supply of photovoltaic solar technology, as well as UPS applications for every segment of the market – from the smallest to the largest.
