Tarsus targets 18%-22% revenue growth

Pierre Spies, CEO of Tarsus Technologies says the group is predicting a revenue growth of between 18% and 22% for the current financial year, which ends in February 2013.

Tarsus specialises in the supply of the world’s foremost PC and peripheral hardware brands to the local reseller channel.

The group distributes a range of products from manufacturers, including Acer, APC, Cisco, Dell, Gateway, HP, Lenovo, Meissner, Microsoft, OKI Printing Solutions and Samsung.

Spies noted that Tarsus directly competes with the other large technology distributors in sub-Saharan Africa, but to some extent it also competes with the technology vendors that are investigating or currently applying direct models.

“To a lesser extent, Tarsus also sees some of the larger resellers who are capable of creating direct supply relationship with the large technology vendors as competition,” he said.

Geography

Tarsus’ head office is situated in Johannesburg with branches in Cape Town, KwaZulu-Natal, Port Elizabeth, Bloemfontein and Nelspruit.

The company head notes that Tarsus currently also has a presence in English-speaking Africa. “Our portfolio of branches outside of South Africa comprises Namibia, Botswana, Mauritius and Mozambique. The company is also in the final stages of opening an office in Zambia.”

“We have a team in South Africa that focuses on countries further North than that and our plans for expansion comprise a move into East Africa by the middle of 2013,” Spies said.

Trends

The CEO highlights  a number of trends driving Tarsus’ business. “Looking first at what’s driving things from a business climate perspective, we’re finding that the telco and banking sectors are real superstars.”

“Both the telco and banking players in the market are broadening their value propositions by offering new bundles of services that include as a vital part of the mix, technology. Players in these two markets are uniquely positioned to do this because of their ability to build cost effective financing into the offering,” the chief said.

Spies opined that retail, which has for a while been one of the strongest verticals, has fallen on tough times and is experiencing particular difficulty when it comes to the higher price points in the market.

“We believe this is an early indicator of the pending arrival of online technology retail in the next 18 months,” he said.

“On the technology front there’s server virtualisation and the constant drive for either greater efficiencies from existing investments or the desire on our clients’ part to reduce their spend on IT services and utilities by choosing virtualised solutions,” Spies said.

“There’s also a strong trend towards mobility and the proliferation of mobile workforces, something that’s being driven strongly by the ever-reducing cost of mobile data connectivity and the ever-increasing pace at which this kind of connection can perform,” he added.

Business Model

“Our differentiation over traditional technology distribution companies resides in our expert logistics capabilities; technical expertise; rendering of pre-and-post sales support; and design, implementation and rollout of large fleets of technology on our resellers’ behalf,” the company chief said.

These services, he added, are available to resellers on an as-needed basis to supplement their own in-house abilities. “95% of product deliveries now take place directly to end-users’ premises as opposed to resellers premises.”

Economic woes

Spies confessed that the volatility of the currency and the sustainability of the political stability in South Africa are the two things that draw his attention most.

“While the latter has been relatively stable up until now, who knows what could happen beyond the elections next year?”

“While the South African economy isn’t in a recession, if it follows the European market, we could be in for a rough ride. Hopefully we as a nation can avoid that,” Spies said.

Growth prospects

Spies said that Tarsus is focused on its expansion into the rest of Africa from a regional perspective and on the public sector from a vertical perspective.

“We’re intrigued by the ‘Rest of Africa’ because we feel there’s a great deal of untapped potential in the region and believe that our services and capabilities will be of value there.”

“The Public Sector space is attractive to us because following on form the 2010 fiscal where there was minimal technology spend (and a great deal of spending on physical infrastructure such as roads and the provision of basic amenities), government is due to begin re-investing in and refreshing its technology infrastructure.”

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Tarsus targets 18%-22% revenue growth