Redington’s Bold Transformation: Revolutionizing the Marketplace with Innovative Software and Cloud Solutions

For the upcoming years, distribution and logistics will continue to be the cornerstone of the organization that distributes Apple iPhones, iPads, and MacBooks in India; nevertheless, the marketplace platform is expected to emerge from 2025 onwards, expanding into a more significant role, according to group chief executive officer V.S. Hariharan.

“We’re channeling a few million dollars into a platform named Cloud Quarks to enhance its analytical capabilities, and we are also creating a marketplace around it with various vendors and software, allowing resellers to collaborate with us to better understand this for their clientele. We are focusing on this, as opposed to mere hardware distribution which relies on supply chain logistics involving credit and warehousing,” Hariharan mentioned in an interview.

In its existing framework, the Chennai-headquartered firm manages extensive warehouses filled with a wide range of gadgets from smartphones to laptops sourced from vendors like Apple and Samsung, a business model heavily reliant on credit. Conversely, the marketplace platform will provide infrastructure and software as a service that necessitates no inventory, minimal warehousing, and limited credit, operated on subscriptions and renewals that its network of 60,000 partners will market. Currently, it operates in 40 markets globally, including Saudi Arabia, which adds $1.5 billion to the total revenue.

Also read | Redington in a predicament regarding CEO

Hariharan highlighted that businesses in the sectors it serves are undergoing digital transformations, likely including developing capacities in the cloud and investing in the adoption or integration of AI in their operations. This results in situations where they may collaborate with a few independent software providers, which is where Redington’s platform marketplace can offer customized solutions.

The strategy is set to unfold over the coming years; however, Redington will be able to determine the timing for the marketplace transition in the next 12-18 months. The turning point will occur when companies recognize the advantages of utilizing AI alongside cloud solutions and start reaping the returns on investments in cloud infrastructure.

Hariharan anticipates that Redington’s software sector will double to $2.5 billion within the next three to five years, with an annual growth rate of 30-40%. The software division, currently part of the technology solutions unit, constitutes 10% of Redington Group’s total business. In the quarter concluding in September, the company’s revenue reached ₹24,952 crore, accompanied by a profit of ₹293 crore. India, South Asia, and Singapore contribute two-thirds of its total revenue, with the remainder derived from other markets.

Also read | Generative AI and data centers set to shape India’s tech industries in 2025

Smartphone and feature phone distribution represents Redington’s largest source of global revenue at ₹8,713 crore, followed by consumer and commercial personal computers, print and supplies at ₹8,481 crore, and networking, security, software, server, and storage contributing ₹6,314 crore to overall revenue. Its cloud reseller and managed services segment is the fastest growing, expanding 53% year-on-year, albeit contributing just ₹972 crore to overall revenue, based on the company’s earnings presentation for the September quarter.

Redington’s most significant vendor is Apple, providing a revenue share of 29% in the first half of FY25, followed by HP at 10%, Lenovo at 8%, and Samsung and Dell each accounting for 7%. In FY24, Redington Ltd’s revenues reached ₹89,600 crore, with a profit of ₹1,200 crore.

The group is already collaborating with major hyperscalers such as Microsoft, AWS, and Google, which will allow it to offer software solutions from these entities on the platform marketplace.

Also read | Mid-sized IT services companies spearhead AI initiative with fresh investments

It is certain that the hardware distribution and supply chain sector will sustain its strength as leading brands and vendors unveil products featuring AI agents or AI functionalities incorporated into the hardware starting in 2025, which will be priced higher than current models. The market is projected to witness accelerated technology refresh cycles over the next three years encompassing personal computers, mobile devices, and servers, in addition to cloud solutions and new AI innovations.

Hariharan also noted that the trend of premiumization in the smartphone and personal computer markets is anticipated to persist as higher spending becomes more widespread in regions beyond metropolitan areas.

The organization is embedding AI into its operations and instructing its workforce of over 7,500 on AI. “We are ensuring that all our personnel are being educated in the language of AI. All our sales and marketing teams are receiving training on the direction they are heading, gaining an understanding of what an LLM, Gen AI, the various technologies accessible,” he added.

And read | In charts: How the data hunt by AI companies is igniting copyright disputes

To develop capabilities, Redington has established pre-sales teams in India and the Middle East and is creating proofs of concept. It is also exploring several small-scale acquisitions in the cloud and software fields as it aims to enhance its capabilities and market competency.

Having initiated operations in new regions including South Africa, ASEAN countries, and Central Asian nations like Azerbaijan, Kazakhstan, and Georgia in recent quarters, the organization plans to replicate its software strategy currently under development in these regions before venturing into more matured markets in the US and Europe.