APW simplifies its channel structure

Mumbai

APW President has decided to take the help of channel partners to touch its ambitious turnover target of Rs 162 crore this fiscal, up from Rs 130 crore in 2007-08. This is why the company has decided to change its go-to-market strategy.

Currently it has 17 partners who act as stockists or marketing agents. Now it is looking forward to appoint four regional distributors who will stock and sell to value added resellers. However, it is unwilling to adopt the national distribution model because the company officials believe that the latter will not have the expertise to push a technology product like racks. Besides, warehousing for huge products like racks can be a challenge for most national distributors.

Earlier this January, the company realized that the percentage of IT spending in enterprise companies will be in single digit, but it is going to be in double digits. This is why the company has decided to shift its focus to SMB clients in B and C-class cities. The company is also adding finishing touches to its channel partner program called 'President Business Associates' (PBA), which will be a channel enrolment and loyalty program.

“We will launch this program by October. We are trying to get in touch with as many value added resellers as possible, and see how many of these can be enrolled into our PBA program,” informed Pramod Agashe, COO, APW President.

The company has set itself a modest target of enrolling 50 partners by March 2009. This is because there is a lot of technical expertise that goes into selling racks. These products come in a knockdown package and there are several permutations that have to be kept in mind while integrating it. “Without proper training, a partner will not be able to deploy the racks which is why we want to concentrate on working with few VARs and then add more to our network,” Agashe informed.

Nonetheless he is not too bothered about this low number because he believes that if this channel initiative brings in around Rs 40 crore of business then APW can well achieve its turnover target of Rs 162 crore. Currently it has 3,000 partners in its database of which 500 are active or have done some transaction with the company in the past two years.

APW has also expanded its manufacturing facilities in Pune and Bangalore to keep up with its growth plans. It is also in talks with an undisclosed organization to take over the 30 percent stake held by APW Electronics in the company. The UK-based APW had filed for receivership and since January 2008, APW President has been discussing with other vendors for transfer of this stake. “We do not want a mere venture capital company to invest in us. Instead we want a technology partner whose offerings will complement ours so that we have an unified stack of solutions to take to the customer,” Agashe said.

APW President specializes in electronic enclosure systems, a market worth about Rs 450 crore, with 30 percent marketshare. Its primary business has been the manufacture and sale of standard electronic enclosures for technology firms like Cisco, IBM and Dell, besides customers in the telecom space such as Reliance, Vodafone, Nokia and Ericsson.

Since 2002, the company has been involved in contract manufacturing, which accounts for half of its business, with customers including Ericsson, Nokia-Siemens, NCR, Reliance Communications etc. It recently entered into an arrangement with UK-based Global Datacenters Management (GDCM), to distribute its 'nlyte' product for India and the Middle East region.