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Sharing insights on overcoming market challenges and leveraging strategic partnerships for value and growth.
The local channel is under more pressure than ever today, with an already highly competitive marketplace now in the throes of a price war as players race towards zero margin. So says Debbie Beech, Country Manager: SA and SADC at cybersecurity specialist, Exclusive Networks Africa, adding that the market is also generally seeing a lack of value-add from distributors and partners at the same time, with too much focus placed on the price point. The resultant market degradation has trickled down and is now also affecting end users.
Debbie Beech, EXN Africa
Looking at South Africa specifically, Beech explains that high inflation and interest rates, and an estimated one percent gross domestic product (GDP) growth for the year, as predicted by President Cyril Ramaphosa in his recent State of the Nation (SONA) address, is culminating in frugal behaviour becoming endemic.
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“The African channel has been affected by global macro factors, such as the wars within the Gaza Strip and Ukraine, as well as numerous elections currently or about to take place this year. And it’s not just the local elections planned across the continent for 2024, in Algeria, Ghana, Mauritius, Mozambique, Tunisia, South Africa and more, or the US and UK elections that influence Africa. It’s also those in India, for instance, as well as the recent voting in Iraq at the end of 2023, which affect the continent,” she explains.
“A combination of all these circumstances has meant that everyone is looking to cut price within an increasingly rigid African channel. There’s a fight for margin and market consolidation within the local sector, which means that larger resellers are having to dance to a larger enterprise’s tune while, at the same time, further increasing pressure on smaller channel players. Add to this the continued brain drain in South Africa in particular, and it’s clear that our environment is complicated, to say the least.”
Beech’s advice for African channel players fighting to keep their heads above water is to counter all this complexity with simplicity.
“The best way to move forward is to go back to simple, straightforward strategies. First and foremost is the importance of building strong relationships; these are going to be critical under the current circumstances. It’s not about what you know, but who you know – and how much they trust you. Having a partnership mentality is key, as is adding value wherever possible.
“Often, during intricate scenarios, we find that communication is lacking, so an effective communication strategy is vital.”
Furthermore, Beech continues, the use of digital tools is paramount. “We have to embrace today’s digital world, making use of the tools available that can help to create efficiencies and free up time.
“Agility is also key; you have to be able to adapt to changing market conditions, particularly those that have an impact on our businesses but are unexpected and beyond our control. In order to achieve this, it’s important to constantly re-evaluate what we’re doing – a static strategy does not allow for flexibility. Today, we can’t define strategy at the beginning of the year and expect it to be relevant at the end of the year. You need to constantly look at your value proposition, optimise your go-to-market plan and regularly improve on delivery.”
Cybersecurity and cloud focus set to continue
As the focus on costs continues, trends that we’ll see within the local marketplace will include an ongoing focus on cloud-based services and solutions, with their potential cost effectiveness and efficiency gains, says Beech.
Furthermore, cybersecurity will remain a huge area of concern for businesses as the year evolves, in particular the services side, with Gartner predicting that global security services spend will climb 11.3 percent in 2024, year-over-year, to $90 billion. Cyberattackers continue to find new ways to exploit companies and individuals, with ongoing digitalisation across the globe also providing more attack opportunities.
“Channel players would do well to look at the cloud and cybersecurity options available in order to best serve and support local end users with these growing requirements. And it’s here that a partner like Exclusive Networks Africa can play an important role, in its capacity as a trusted cybersecurity specialist that is able to bring a global footprint into the local market.”
Exclusive Networks Africa not only delivers a best-in-class cybersecurity and digital infrastructure technology portfolio, with a balance between established and emerging market leaders, the organisation is also able to support local partners in terms of professional services, pre-sales, consulting and engineering skills, as well as logistics, marketing and even flexible financing.
“With closer collaboration throughout the value chain – between partner, end user and vendor – Exclusive Networks Africa partners are better placed to service and support their end customers, allowing them to add more value and stay ahead of the curve. Our international footprint spanning more than 170 countries also assists local channel players in extending their reach beyond the African continent, with the ability to provide support for global rollouts,” Beech concludes.
