Phoenix spreads its wings

He says the company was founded by Simon Campbell-Young" rel=tag>Simon Campbell-Young in the aftermath of the collapse of IT distributor Siltek. Campbell-Young was the MD of Siltek company Memtek.

"Post Siltek, Simon moved on to look at other ventures, one of them being CompuTrolley he online e-tailer," Phillips says. Distributing Jasc`s Paintshop Pro led him back into the distribution space. "But rather than jump straight back into hardware, which is what Memtek was, he started looking at software."

Phoenix grew to the point where it now has about 60 active product lines, including several premium brands such as Nero, Ulead, Sony, Adobe Educational and others.

NATURAL PROGRESSION

The decision to move into the enterprise market came as a result of the company`s rapid expansion, Phillips says. "We felt we had really consolidated our position within mass retail, which of course was one of our primary targets when we started off as a business, and over the past 18 months we have been expanding into independent retail. We do a lot, for example, in the OEM side, where we provide value-add for various hardware manufacturers like Sony SA, Canon, [and] some of the PC manufacturers as well.

"So we`ve moved slightly into the licensing market, and what we find with a lot of our vendors is that we represent them almost as their virtual presence in the country. If they had a query, whether it`s technical support or a sales enquiry, they would refer it to us and say: `Look, you guys are in the country, you know the market, you know the customers - can you take the sales lead, can you follow up the customer, can you sort this out?`"

As a result, Phoenix has been involved in licensing, maintenance and upgrades. "For us it`s almost a natural progression, an evolution of the business model, in that we are still staying very much in the retail space - it`s still an important part of the business - but we are looking at expanding outside of that area."

He says the company has seen demand for business continuity, data and mobile security, and solutions for home offices and small and medium enterprises.

"We are now at the point where we feel we`ve got a nice portfolio that addresses the needs in the market, we are ready to move out into the market, and we are in the process of appointing value-added resellers."

FACING THE CHALLENGES

Phillips says the expansion has not been without its challenges. Phoenix has had to grow both its sales and support teams and has also had to adjust its mindset. "Of course, there are core differences. In retail you might push strongly through advertising and promotion, whereas now in the enterprise market you`re building stronger relationships - direct relationships. There`s less of a branding aspect and more of a solutions aspect."

The company also has to face challenges relating to proving itself in the enterprise market, Phillips says. That includes dealing with questions such as: "You`re someone new - what are you bringing in? Are you going to be behind the product? Are you a fly-by-night or are you going to be here for the long haul?" he adds.

"I think we just have to adapt our mindset, make sure we are choosing the right products - not picking everything and try to take everything to market, but rather focus on areas where there is a demand for it and a perceived need for it." The company has also found that sales cycles and life cycles in enterprise are longer than in the mass retail market.

Phillips says that revenue is split 85-15 between retail and revenue, but the company would like to see a 60-40 split within the next two years. "We need to be realistic and see what works and what doesn`t, and how we need to adapt our strategy as a business."