Transcript
I'm your host, Scott Mann, SVP Global Sales at StoreMagic. We're always exploring how simple, reliable technology can benefit you and the people you serve, whether you're running branch offices, retail stores, or supporting customers on the front lines. Our goal is to always bring interesting guests, deliver some value, and have some fun along the way. And when we talk about delivering value, few people see the full breadth of the IT landscape like today's guest. He's navigating the shifts in global distribution and helping vendors find their footing in a rapidly changing market. Joining us from London is Ikram Khalid, Group Head of Vendor Alliances at QBS Technology Group. Ikram, great to have you on the show. How are things in the world of QBS today? Scott, thank you for having me. It's been great, actually, at QBS. We've just finished our fiscal in March. In fact, we had our company kickoff of this fiscal last week, and it seems that QBS is well-equipped to go into the FY27 and achieve the goals that's been set by the board. So happy days on our side. Fantastic. I understand the fiscals, the off-calendar fiscal, because we're very similar here. I appreciate the changes that we have to go through with the calendar year ending and then Q4 starting Q1. But yeah, let's dive right into it. You've been in the industry through some massive shifts. We used to talk about distribution in very simple terms, but that landscape has definitely evolved over the years. From your perspective, how has the distributor role changed from simply moving boxes like it once was to actually influencing major solution decisions? That's a great question, Scott. So the era of moving boxes was when the sale was pretty much product-driven or technology-driven. And that has changed massively when we have come to this type of the world where AI is driving conversations across everywhere, right? So at this point, the customers are not just only looking at one technology per se. They're looking at multiple different technologies. They're speaking to multiple different advisors. And the buying audience has shifted drastically from just being procurement to service managers and people who are actually using the products out of the front lines. Where I see QBS and the distribution landscape add value on that is, of course, we are the orchestrators, if you want to put it like that, rather than just shifting boxes or moving products from A to B, we want to create an ecosystem where QBS can actually add value to the partners, bringing the right vendors over to them. I love that. Yeah, I think we've moved from the world of people buying products to people trying to solve business outcomes with solutions, which typically involve many different products. You kind of touched on this a little bit, but I see if you want to say anything else to add to that. But what does QBS do to differentiate themselves from other distributors in the EMEA market where you guys serve? Sure. So I'm not sure if you're aware, but QBS, the brand, has been in the market for quite some time in the UK, especially, and of course, we have been growing organically, but also by acquisition. Currently, QBS has over 24 different locations across EMEA. What sets QBS apart? That's a very unique question, and I get asked quite a few times on my regular daily job. So what we're doing is we're not just moving boxes or selling products, we're creating We are providing the expertise that the market needs at this point, given that there are so many products out there in the market, finding the right fit is critical. QBS helps deliver that sustainability on both ends to the vendors and also the resellers. At the moment, we have over 650 plus employees across EMEA, speaking over 28 different languages, and it's all about building those relationships so we can then leverage them off when the technology fits. Awesome. I can imagine the challenges that comes with serving such a wide, vast group of countries and languages to have to serve. And I imagine you guys work with a ton of different vendors. You probably had a lot of experience with many vendors, and some that do things right, some that repeat the same mistakes over and over. From your experience, what mistakes do you see that vendors make, and what things can vendors do to try to stand out with the partners within your ecosystem? So one of the standard mistakes that vendors tend to have, or the conception that the vendors tend to have, is that they can go at it all alone and achieve it all themselves. Vendors do end up creating an attractive partner program, but then they take the resellers as the customer audience for their product, which is simply not the case. What vendors are seeing as a success and as a win is co-selling, understanding what the distributor can add as a value within the range of the resellers that they're working with. As you probably know, QBS has over 4,500 vendors on the portfolio. So yes, we do have had experience of working with vendors in different stages of their lifecycle when it comes to the partner program. But where we have seen the best wins are the cases where a vendor and a distributor are working hand in hand, identifying the right partners that will take us to the right end users. Yeah, I agree with that. And I've been in the channel industry for a long time, and I think everyone, partner programs and all that stuff, it's still cookie cutter across the board. But at the end of the day, it is obviously about the tools to enable them. But it's relationships, even from customers to partners and working with vendors and distributors. People sell not what they know as much as they sell who they know. You got to trust the person on the other side. It doesn't matter what the product is if you don't trust the person. Right. So I appreciate that. And I definitely say that that's kind of been like the the way I've tried to build my career and structure everything that I do within any of the changes that I'm making within our partner ecosystem as well. So glad to hear that we're on the right track with that. And you guys obviously serve, you're seeing a lot of different changes that are happening across the market. And you guys serve a lot of different countries across Europe, Middle East, Africa. Are you seeing a difference in priorities these days in, say, Germany, UK, Eastern Europe? Or are we kind of seeing the same similar edge and infrastructure challenges becoming universal because of some of these larger scale macroeconomic issues that everybody's facing? I mean, everything that you have said does play a part in how the regions actually react to these technologies and these verticals. So the regional nuances are real. If we are handpicking these regions, for example, say Germany to start off with, most of the decisions are heavily influenced by the EU AI Act and, of course, GDPR. Germany is also quite restrictive when it comes to picking the technologies and trying to understand if they can play in those fields while they are keeping the regulatory policies in mind. UK is a bit more cloud native. I would say we have seen a lot more friction within the UK industry. Enterprises have seen mainly the growth and the advantages in the US side of the business. So it is easier to have that conversation with end users based in the UK. But the best, I would say, region that we are seeing a lot of engagement in is Eastern Europe. The audience over there is open minded. They're quite open to have a conversation around the broadness of the technology that's available and, of course, experiment on it to see what the success rate looks like. That's awesome. Yeah, I've served across Africa, Middle East, Europe, and there's definitely similarities globally, right? Everybody always says, well, my region is different. There are differences for sure. But on the higher level, everything is pretty unique. And then you have to adjust accordingly for each region. Like Africa, cloud is sometimes regulatory issues within running the cloud in Africa. So manufacturing looks very different over there versus in Germany, for instance, where obviously manufacturing is quite large and very different from a regulatory perspective. So, yeah, I understand what you're saying. And you guys have been in acquisition mode heavily over the last, as you mentioned, I feel like I see in the news something new happening with you guys on a quarterly basis, which is probably very exciting to be a part of. What's the overarching strategy around this as you guys are continuing to acquire and grow across the region? So our mission is to be the critical distributor for the vendors that we strategically work with and, of course, the resellers and the partners and the customers that we serve in these markets. Of course, we want to grow the business organically and see how much we can make a difference in the markets we're existing upon. At the moment, our focus is going to be predominantly in EMEA. We want to strengthen our sales force within EMEA, the vendors that we have currently working in specific regions. We want to open up different regions for them and expand the market that they have not had the chance to play in previously. While acquisition is part of the strategy, as much as I would love to give you information on that, I'm not privy to it myself. Hopefully, we'll find something out on LinkedIn when our CEO, Dave Stevenson, decides to make a post about it. Yeah, that's fair. I wasn't trying to get you in trouble for exposing anything that's top secret information. So I appreciate that. And I mean, I share the same sentiment as one of the vendors that you guys obviously have on your line card. You guys have definitely helped us grow and expand to the new regions as we've continued to grow out in EMEA. And it's interesting to hear that the global reach that you guys have, because that's that's something that we're very much focused on as well. So we appreciate everything that you guys have done for us. Now, across all of your partners, your customers, your regions, this might be maybe an obvious question or you might come up with something a little unique from your perspective and your stance being very software driven. But what are what are the top three most common dilemmas that you hear from customers or partners, however you want to define those? As you probably know, yes, we do have a wide breadth of customers who serve different verticals of end users that we regularly engage with. So one of the most common ones that I come across with is we've bought a platform. We don't know what to do with it. You know, nine out of 10 times someone will end up raising a P.O. for a tool that looks amazing in the outside. There's a lot of, let's say, noise around the product and its benefits of having it in your stack. But as I said, 90 percent of the times when it comes to deployment, after deploying it, interoperability is a key requirement nowadays when cost of ownership has become real. So working from a single pane of glasses is quite important for end users and consumers nowadays. And they do end up buying tools that in the long run doesn't benefit the business at all. If anything, it's going to increase their IT debt. The other common use case we hear about is our A.I. policy is ungoverned. So I think this is something that's the talk of the town at the moment. So shadow A.I., it's becoming a pandemic if you think about it. So 90 percent of the IT teams don't really know about what A.I. tools or LLMs are being used within their environment. And organizations that do identify this issue at an early age and start working on it based on that being part of their ecosystem, as opposed to just an add-on, are the companies that are going to win in the next three to five years. Because A.I., as much as we want to jump around it, but we all know that eventually it will become a part of everyone's daily lives one way or the other, whether we're talking about agentic A.I., which is definitely going to be something that's going to come in in full force in the next coming years. The last one that I've started coming across quite recently, actually, is about the hardware investment, as we know that there's been some shortages across the world due to conflicts that are unavoidable. So end users and organizations are finding ways to extend their refresh cycle of the hardware they've got, which means essentially software will have to do the heavy lifting. And it has become crucial not just for the consumers and the resellers as well, that they need to find ways that software can optimize their existing hardware lifecycle as opposed to wait for a refresh. Ownership has become key, everyone's looking for ways to save money. And again, QBS is trying to enable the resellers to choose the right products that fit into the ecosystem as opposed to just shoving a product down the end user's throat. Yeah, yeah, those are, I mean, three great points. I think everybody from, I hear internally, externally, A.I. is like, I mean, it's been talked about for years, right? A.I. is the next thing. And I've done a lot of PR interviews and everything. And if you don't have something to talk about on A.I., they're not interested. It's the buzzword. But you see these like cyclical trends with everything, right? So it's like the same thing happened with cloud, right? It comes from this, there's buzz and then there's mass adoption. And then it comes down to the governance of it all. And then everything that changes after that, as everything becomes a little bit more mature, but we're just, we're at that stage now. Everybody is, especially now that it's so kind of consumer driven, you know, everybody as an individual uses A.I. in some way. And if you're not using A.I., you're lagging behind, right? Somebody else is able to do it more efficiently than you because you're using it. But then you have all this information that potentially can be shared outside of your company. And it can be very sensitive information that once you post it into a public chat or something like that, it's out there for the world. Right. So governance is key, Scott. And a lot of users don't realize that the data that they are putting in, these LLMs are usually using these data to train their agents. And a lot of people don't understand the sensitivity of the data that they're actually working with. It may just sound like a name or maybe a numerical number that comes up. But these may be sensitive without their knowledge. So it is critical that the organizations start building on their A.I. governance and policy from now because it's better late than never. Absolutely. And then the irony is like your third point was conflicts that are happening around the world. It's back to do with A.I., right? Like this second conflict that we're talking about internally, governance, it's driving why all the prices on hardware and everything are going up and what everybody's currently facing in the market. And we know it's not something I remember. I remember talking about this in the summer of last year and it was like hardware prices and everything were coming. This A.I. boom is creating a shortage. And it was like this might last six months and then it's now this might last three years. And you're right, though, it comes down to like the software play. Right. It's money is money is set aside for the CapEx, the OpEx. People are looking at, you know, maybe I need to make a change with how I'm leveraging this to kind of preserve. Obviously, still use the budget that they wanted to use and get the same outcome that they want to get. But they have to do it in a very different way and leveraging software and different tools that they can to optimize their data and everything. That sounds like a it's a great way to get a short term outcome that's going to help benefit them in the long term. So with the hardware piece as well, Scott, I mean, I think there's this misconception now that there's a shortage. Yes, there was a shortage with the with the stock orders and the back orders and all the stuff. What that does, what it has done now is basically economics. You know, they have hyped up the price, which in turn has made the end users and the consumers rethink what what the cost of ownership is going to look like the next fiscal and how can we optimize this tool and software they have in their stack currently as opposed to going for a refresh? Yeah. And I mean, I think people that are in a good position that they're able to extend that life cycle. We used to see like three year hardware refreshes. Right now, these hardware refreshes are just going to extend further and further. The average is probably three to five. You see people do seven, 10, depending on the workloads and how mission critical the things that running on the workloads running on that hardware. But we're going to see some big changes that are happening over the next few years because I don't have a crystal ball. But typically when these prices go up, they don't come back down to where they were before. Even if they do come down, they're always going to stay a little higher than they were. So who knows what it's going to look like over the next. It'll be really interesting to look back on this in 12 months from now and say what that what that looks. That's the point where we have the crystal ball because we've experienced it all and see what that looks like this time next year. So we'll have to mark that on our calendars to rewatch this. And so we're hearing a lot of concerns, obviously, we're talking about the hardware stuff and we're seeing a lot of concerns around hardware longevity and sustainability lately. There's a rising cost on the hardware servers. Everybody knows this isn't anything new. It's impacting budgets. Are you finding that it's because of the hardware pricing increases, it's impacting software budgets where they have less to use or is kind of the inverse happening where because they're now maybe extending the lifecycle of that hardware, they have more software budget to leverage or is it a mix of both? It will be a mixed bag, Scott, right? I think I think the right question that we should be asking, given what the current world situation is, is where does the environment actually fit? Like so like we'll be talking about cloud edge on prem, right? It actually comes down to the point of where where the end user or the consumer sees the longevity of deploying the tool and the and the ROI that's coming from the investment that they've made. Cloud is, of course, it's exceptional for elasticity, right? If you're if you're looking for a global reach, cloud is the way to go. But there are organizations that would prefer to be on edge or on prem because they don't want the latency. It's critical for them to ensure that the services don't drop. It's quite heavy to run these loads. So they want to make sure that they're not on cloud, but on edge or on prem. Right. And this this it comes down to efficiency at the end of the day, which which platform is literally offering what what type of return on efficiency, in fact, for the organizations. Thankfully, QBS, we are working towards creating a vertical play where we are able to support our resellers when it comes to both cloud edge or on prem. I mean, we've been talking about hybrid architecture forever, too. There's just never been more relevant than it is right now. Now we talked with the hardware piece that the AI piece is obviously the biggest talk right now in the market. And what are you seeing? What's what's the impact that you're seeing with that? Is there obviously a ton of new vendors popping up? Is there a big ecosystem of AI software applications, governance, different providers that's growing and that are constantly knocking on your doors to say, hey, we want QBS to support us? See, I think I think the the important question is define AI. Right. Because at this point, everyone has an AI agent, assistant, an LLM of some sort attached to it. So, yes, there is a rise of AI being involved or included in everyone's feature or the future releases that are coming as part of their patch. Everyone's talking about it. Now, the most important thing is to understand what the definition of AI is. What do you actually mean? What the AI is actually doing? Or is it just another fancy way of branding your product? So, yes, we have seen a surge of such brands, but also we have seen a lot of agentic AI tools coming out of the market. Of course, we all know about the big boys like OpenAI and Anthropic, right? But there are smaller players and niche players that are coming out and there's been a rise of them. We will see that for the next next three to five years for sure. There will be a rise. And as you know, IT or technology, it's a never ending game. Every week there's something coming out. I mean, the other day I was listening to Jensen Huang and he was talking about long term plans. And five, six years ago, companies or organizations would have an IT budget or planning done for three to five years. And that was because the technology, the rate of which the technology was coming out, it was manageable. We have a year to go through the fiscal and understand the value of this and then probably implement or change our strategy. But now there's a new technology coming out every single week. There's a new company registering in San Francisco every single week. So plans, strategies. Yes, you may have, let's say, a main objective or a primary objective where you see your company or your organization to go. But the nuances will change on a regular basis. Especially if you're an innovator and when it comes to the software adoption lifecycle, it's crucial that innovators and early adopters test out these tools so that the early majority and the late majority can then buy into it. And I think the rate at which the adoption is going at the moment, it's increased far, far, far more than it was, let's say, a year or two years ago. Right. So we have seen a rise. We will see a rise. And as I said, we have taken precautions, whereas we have created a vendor council internally where we are screening these vendors. We are actively speaking to our top partners, resellers, MSPs, GSIs, to understand the use case and which framework does it actually fit into. And yes, there will be a lot of hit and miss. I can guarantee you that that's lack of distribution. But we want to make sure that the partners we onboard strategically from the QBS site are the ones that add value in the long term for our resellers. Yeah, it makes sense. I was actually the budget piece that was really interesting. And that kind of like said, I have an accounting background. So any time it comes to finance or anything, I'm like, I didn't think of that. And that's a very interesting perspective on it, because you're right. People used to build budgets for three to five years. And now they probably have to look at that as like a one to two year because they know they're going to have to readjust it on the fly. That's that's really interesting. But I can I can appreciate that. I mean, you've got all these vendors knocking on your doors and you're the challenge for you guys. You're doing the right things. You're communicating, right. You're you're you're taking feedback from your partners and then telling you what they need, what they're looking for. And then you're putting that into the whole picture of like this needs to fit into our ecosystem. They need to this product needs to be brought in and it needs to have the same values to fit along all the other products that we that we talked to the start about the relationships and everything. So it's it's not a it's not an easy feat being on the position that you guys are at because you're kind of at the forefront of bringing some of these vendors to market and bringing them in front of your partners before they even get to customers and before they grow to a size that they're on billboards and TV ads and everything like that. So it's it's a it's a neat perspective that you have at the early stage on everything. You kind of touched on the three to five years. But what do you think? Is there anything else that you think companies will need from vendors and partners in the next three to five years that that they maybe don't prioritize today? So, I mean, every every reseller partner or MSP or GSI that I meet, I keep reminding them that how crucial it is to have an AI governance and policy within the end user organization. This this is crucial because if you're not building it into your ecosystem from the get go in the long run, you will have an issue, especially with the the EU AI act kicking in. We're going to I'm sure that the British customers, the United Kingdom customers are also picking up on this. The government's picking up on this as well. So we will get more policies and governance pieces coming into play from the government as well. It is crucial that the conversation that our resellers are having with these customers or their their customers, in fact, is is going to be around enablement on on the AI governance policy. So that's that's one important thing I've mentioned about, you know, cost of ownership. The more we progress into this year, the more we are seeing that, you know, end users or or resellers that were more open to understand about the technologies out there and were a bit more, let's say, had the discovery hat on to understand what the technology is all about. That has that that has shifted and we're going to see a shift in that as we go along, because there's going to be so many technologies coming. There's so many out there at the market. It's not about just adding a product to a stack. It's about the longevity and the lifecycle of that ecosystem you're building. So organizations that maybe have just started planning for the IT budget, the infrastructure refresh, have probably just started thinking about the security and the governance policies in the organizations. This is the right time. The time is now rather than waiting for some regulatory act to come out and then try and fight a battle, a legal battle with the with the courts. I would rather say, you know, invest in getting the governance in place. And I think one of the one of the famous quotes that I think you probably have heard around, like, get your housing order in person. You know, that's that's the most important, important rule of thumb. I can't be going out and telling people and evangelizing about AI and governance if I haven't got my own house in order. Again, the the last thing that I would obviously touch base on is the the change that we will see, as you know, I've mentioned it in the beginning of this of this podcast, is that consumers are becoming more aware. And when I said they're becoming more aware, it's not just about the technology and how it fits into the ecosystem, but also how it talks to other business applications within their portfolio. Vendors that will not realize the power of integration, especially out about integration, are going to be missing out. There are tools that are enabling people to connect these applications, but they're having to shift from one UI to the other. People are looking for simplicity. That is going to be a key in getting the efficiency rate out from their employees. So, you know, being able to offer that to consumers that they will be able to operate from a single pane of glass rather than having to switch applications and UI as much as possible. That will definitely start shifting towards the right side. We will see more and more clients asking for a tool that I mean, MCP now is something that everyone's talking about, of course. But when it comes to critical business applications, you know, they will be asking if there are out of the box integrations, not just open API integrations, but out of the box integrations. So it's click there and deploy. Yeah, I think that's a good lesson for both partners and vendors, like from the from the partners perspective, like the last decade, everybody's always there's usually like I'm this one vendor that I sell and I sell this to all my customers. But the consumer landscape is changing so much that it's not like a one size fits all for everybody. And, you know, partners have been burned by that approach where that vendor decides to make a change. So they're kind of operating as a we need to figure out these are our segments that we focus on and this is a good solution here and we have some alternatives. And from a vendor's perspective to learn from that, it's the integration side of it is so important to be able to integrate with with not not to think of yourself as the ecosystem, to think of the ecosystem as all of the other players around it. And you need to be able to serve from the bottom of the stack to the top of the stack and make sure that there is there's some sort of cohesity across all of it. Right. And that's that's that's an interesting take on it. And I think every vendor needs to be considering that as they're growing their product. It's not about just acquiring all of these and building all of these in-house. There's somebody else that's doing it very good. How do you work with that? Because your customers are going to be using that among some of the other solutions out there. So. Absolutely. And Scott, just to kind of highlight one one point for for vendors out there that it's not a small market. EMEA is huge. The total addressable market, it's phenomenal. Right. No vendor is is going to be left behind if the technology is solid and if it if it fits certain in the customer portfolios and stack that there is enough for everyone to go fish around on. So the concept that, oh, the market's small and I have to compete with everybody. That is simply not the case anymore, because, as you know, there are more and more organizations that are adapting into the IT stack and investing more money in the IT stack. And the use cases that we're seeing, it's phenomenal. Like I've seen use cases from ministry all the way to drilling. I've seen in health care. I've seen in fintech. It's the world's your oyster if you really want to go out there and, you know, fit into someone's stack. And that provides that longevity of people with positive experiences. They always they always love to boast about what they have, what's what's happening within their stack and what's made their lives easier. So there are multiple different avenues in which a vendor cannot obviously get into the market and the ladder and grow their brand using awareness and branding. But there is enough for everybody to be happy with. I absolutely agree. I think the the challenge with EMEA market itself has always been that there's like so many barriers because while it's it's like Europe itself is like it's one commission, but there's everything different, different, there's different cultures, there's different languages, there's there's different challenges in each country that you serve. So from a vendor's perspective, having a distributor that can bring down those walls and has the reach across all those regions, that's what makes it feel like it's one region that you're kind of targeting after and you don't have to go. And it's so much more of a lift from a vendor's perspective. They don't have to go to each country and on board and they will start with the distributor, find the partners, find the customers. It's a lot more work to do that as opposed to being able to centralize that with someone like QBS. So absolutely. And, you know, simplicity is key. Our our onboarding rate and launch rate is phenomenal compared to the market. And what we intend to do is give the best of both worlds to our our resellers and partners. I mean, as I said, there is enough for us, for everybody to go out and grab on to. It's just finding the right partners and the right clients. I love that. And obviously, as you say, I'm very passionate about everything that's happening. You've been with QBS for a good amount of time. What excites you about the future? You know, we'd be remiss not to talk about the future. We don't have the crystal ball, but let's put that crystal ball in here. What excites you about what's coming up? There's a lot happening at QBS. We have recently launched our security business unit where we have allocated certain expertise from the industry. It's been built up very aggressively from our side. We have obviously started engaging our primary vendors on a strategic partners, vendors into other regions as well. But there hasn't been that much exposure for these for these vendors previously. And obviously, the acquisition piece is quite important. There's a team that is actively looking after the acquisition piece and trying to understand which markets are viable for us to get into at this point. But one of the most important thing that I am really excited about is the AI piece. We have started speaking to a lot of these AI vendors, as you want to call them. It is an interesting conversation because, again, the licensing model is very different to the SaaS license that we have at the moment. Understanding the consumption base and the credits and how it's distributed. It's an interesting world to be in, Scott, I'm not going to lie. So, yeah, we are looking to make the most out of what we have, plus understand how we can go out and get these beasts that are going to be the next big thing in the market. Awesome. Ikram, this has been fantastic. I appreciate your time. I'm looking at the clock here, and I think I talk too much that it extends all of these podcasts a little longer than we expected, but such good conversation. So I appreciate you joining us today. And to everybody tuning in, thank you for tuning in to PodMagic. We're simple, reliable, IT meets real-world impact. If you enjoyed the conversation, be sure to subscribe and share. Until next time. Bye.
