The idea is to cater to “large deals from small companies and small deals from large companies,” an area currently not serviced by large or mid-cap IT companies, Rajiv Srivastava, managing director of the group, said in an exclusive interview.
Amid the Covid-19 pandemic, Srivastava said the company got a sense of the industry’s shift to the cloud and over the last two quarters, it struck partnerships with all the three hyper-scalers – Google, Microsoft, and Amazon.
“We sell the software packages, how to set up a financial accounting or any other application package of any SMB or mid-to-large customers. We give them software and make sure it is implemented for the benefit of the SMBs,” Srivastava said.
This is a big opportunity since not many players are currently offering their services to small businesses, he added.
In the last one year, Redington has built up an annual recurring revenue of almost $250 million from this business.
Discover the stories of your interest
“We are projecting our cloud revenue to grow to about $1 billion in the next three years from zero revenues in this line of business just two years ago,” he said.The company, which had revenues of $7.7 billion in the fiscal year 2022-23, said it had amassed around 7,000 clients so far and was looking to increase this number to 12,000 by the end of this year.
This strategy will also help its traditional business get a cushion from the cyclical nature of demand for technology products.
“We shifted our entire go-to-market model towards being a lot more dependent on customers like enterprises, SMBs and governments,” Srivastava, who steered HP in India as its chief for several years, said. “It was a huge shift that we made in the last one year, from being a pure play provider of equipment to now selling more end-to-end comprehensive solutions for customers or partners.”
Srivastava, however, said that the shift was not an easy one as enterprises require installation, training, implementation and several other aspects.
“It’s a big shift and it helped us,” he said. “And that’s the reason in the last two quarters, when the industry has gone down by 15%, we grew by 28% and the quarter when the industry went down 33%, we grew 31%.”
After a pandemic-driven massive demand for tech products such as laptops and smartphones, the industry is now staring at a slowdown due to macroeconomic concerns.
Srivastava said that while the new portfolio of services now contributes less than 5% of overall revenue, it supports the rest of the Redington’s selling process and brings in the big business.
“Just by shifting to enabling yourself to sell services, I can’t get 31% growth since currently it is just 5% of our portfolio,” he said. “But it is the pull factor of these services and skill that is getting us (the big business).”
On February 1, Redington announced its financial results for the third quarter.
Global revenue grew 31% to Rs 21,715 crore, the highest ever for any quarter, while operating profit rose 14% to Rs 622 crore, its highest ever on year.
For all the latest Technology News Click Here
