Reddington plans to use software and cloud to transform market

Distribution and logistics will remain the backbone of Apple’s distribution company in India for iPhone, iPad and MacBook in the coming years; however, group CEO VS Hariharan said that the market platform will start taking shape from 2025 and will subsequently become a larger business .

“We’ve invested millions of dollars in a platform called Cloud Quarks to make it more analytics-oriented, and we’ve also built a marketplace around that platform with multiple vendors and software so resellers can also interact with us Collaborating to gain knowledge about: This is something we are working on for their customers, as opposed to pure hardware distribution, which will be supply chain logistics driven by credit and warehousing,” Hariharan said. said in an interview.

Under its current model, the Chennai-based company operates large warehouses stocked with electronics such as smartphones and laptops from suppliers such as Apple and Samsung, and the business relies heavily on credit. In contrast, the marketplace platform will provide infrastructure and software-as-a-service based on subscriptions and renewals that its network of 39,500 partners will bring to market, with no inventory, low warehousing and little credit. The company currently operates in 40 markets globally, with Saudi Arabia contributing $1.5 billion to the overall business.

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Hariharan said companies in its operating space are undergoing digital transformation of their businesses, which may include creating capabilities in the cloud and investing in adopting or integrating artificial intelligence in their operations. This creates a situation where they may work with a small number of independent software providers and Reddington’s platform marketplace will be able to provide tailor-made solutions.

This strategy will be successful in the coming years. However, Reddington will be able to time the market turn over the next 12 to 18 months. The inflection point will come when companies see the benefits of using AI on top of the cloud and start to see a return on the infrastructure investments that were made to create the cloud.

Hariharan expects Redington’s software business to double to $2.5 billion over the next three to five years, growing 30-40% annually. The software business currently belongs to the Technology Solutions segment and currently accounts for 10% of Redington Group’s overall business. For the quarter ended September, the company’s revenue was $24,952 Crore with profit of Rs. $293 crores. India, South Asia and Singapore contribute two-thirds of its total revenue, with the remainder coming from other markets.

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Distribution of smartphones and feature phones is Redington’s largest contributor to global revenue $8,713 Crore, followed by Consumer & Business PCs, Printing & Supplies $84.81 Crore along with network, security, software, server and storage contributions $Total revenue was Rs 6,314 crore. Its cloud resale and managed services business grew the fastest, with a year-on-year growth of 53%, but its contribution was only $According to the company’s September quarter earnings report, total revenue was Rs 972 crore.

Redington’s largest single supplier is Apple, which contributed 29% of revenue in the first half of FY25, followed by HP (10%), Lenovo (8%), Samsung and Dell each contributing 7%. In FY24, Redington Ltd’s revenue was $896 billion, with a profit of $12 billion rupees.

The group has already partnered with major hyperscale providers such as Microsoft, AWS and Google, which will enable it to bring these entities’ software solutions to the platform market.

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What is certain is that the hardware distribution and supply chain space will remain strong as major brands and vendors launch products with AI agents or built-in AI capabilities starting in 2025, which will be priced higher than existing models . In addition to cloud solutions and new artificial intelligence solutions, the technology refresh cycle for PCs, mobile phones and servers is expected to accelerate in the next three years.

Hariharan further noted that the premiumization trend in smartphones and PCs is expected to continue as increased consumption outside metropolitan areas becomes more common.

The company is integrating artificial intelligence into its own processes and training more than 7,500 employees on artificial intelligence. “We ensure that all employees are trained in the language of AI. All our sales and marketing staff are being trained on where they are going, what is LLM, Gen AI and the different technologies that are available,” he added .

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To build capacity, Redington has established pre-sales teams in India and the Middle East and is building proof-of-concepts. It is also considering a number of smaller acquisitions in the cloud and software sectors as it intends to bring more capabilities and go-to-market capabilities.

In the past few quarters, the company has begun operating in new markets in South Africa, ASEAN countries, and Central Asian countries such as Azerbaijan, Kazakhstan, and Georgia, where it intends to replicate the software strategy it is currently developing before considering more mature Market US and European markets.