Iris Computers: Making Great Strides

Ask Mr. Sanjiv Krishen, Chairman & Managing Director, Iris Computers Ltd., how Iris Computers became such a successful company in such a short span of time, he instantly credits hard work, meticulous planning and insistence on excellence. 

When it comes to making its presence vigorously felt in an industry, very few distribution companies come close to Iris Computers Ltd., a leading distributor of technology products in India. 

The company has scaled many new heights and explored uncharted territories since its inception in 1996. Within such a short span of time, Iris instills a sense of trust among the customers.

“We are target oriented. We like to make sure that we achieve all our targets. So, principals like dealing with us and resellers like dealing with us,” says Sanjiv Krishen.

He adds, “We have built a feeling of trust. People are comfortable in dealing with us. We generally like to live up to our commitments. We don’t like to make false promises. That is an important thing in any business.” Iris came into being in September 1996. The company recorded a turnover of Rs.5 crore in the first year. Iris Computers posted a revenue of Rs.656 crore in 2007-08, registering a quantum jump of 40% over the previous fiscal year.

“This fiscal year, we are targeting Rs.850 crore. Even though there is slowdown but our plans are to reflect the growth, which is almost 30 per cent. As of now, we are running 40 per cent more than last year. So, although there is a slowdown, our numbers are still going high,” said Sanjiv Krishen. 

With a headcount of 212, Iris buys products from the principals. The company sells them through the resellers who, in turn, sell the products to the end-customers. Iris has more than two thousand resellers throughout the length and breadth of the country.

Iris’s wide presence throughout the country gives the distribution company a competitive edge. 

“Relationship with vendors and customers goes a long way in ensuring profitable business for you. When customers trust you, they will continue to give you repeat business. If you have strong relationship with vendors, more business opportunities will come your way.” 

Iris ventured into tape and automation after it became fourth distributor of HP. It also signed up BenQ for its TFT monitors. It also lined up some lifestyle products, to sustain its growth rates. Now, the company wants to round off its product portfolio by adding some software brands in it as well.

Iris took the initiative to enhance its reach in the B- and C-class cities. Iris claims that its flexibility towards customers sets it apart from other distributors and has resulted in its growth. Its outlets are open from 9 a.m. to 9 p.m., seven days a week, so that the partners can get instant delivery. 

“Our goal is to be a most responsive distributor. We are open from 9 a.m. to 9 p.m., seven days a week. That is the value addition we give to our resellers. Most other distributors close their warehouses by six, our warehouses remain open for a long time. Delivery goes till sometime midnight.”

Iris Computers has a wide range of customers. In the financial sector, the company has big names like Citibank and Merryl Lynch. In the entrainment industry, the distribution company is DQ Entertainment. IIT and DPS are some of the customers in the field of education. 

Iris supports brands like IBM, HP, Lenovo, LG, Microsoft, etc. For Iris, HP, Lenovo and IBM bring eighty per cent of the company’s business. 

Competition is an inseparable part of business. It contributes to the growth of productivity for the company. Motivation to come up with new innovations and technologies is a sequel to this competition. Iris Computers is not untouched by this aspect. The fact that the company is facing a tough challenge from its competitors is not lost sight of. Asked how the company remains a cut above the rest in the competitive landscape, Sanjiv Krishen says, “Those days are gone when margins were five per cent. Now, we have to operate between two and four per cent, and the key is to cut down overheads, the key is to rotate the stock as fast as you can. We move stock quickly, we collect money aggressively and our expenses are under control. So, we tried to ensure that expenses don’t go beyond two to three per cent. That is how we have managed.”

Its beginnings were much more humble. Starting with an initial investment of Rs.1 crore, Sanjiv Krishen set up the company with association from Kamini Talwar, Sales Director, and Som Arya, Finance Director. “When I came back from the Middle East to India, I joined Wooden Computers, then a distributor of Apple Computers in India. In those days, Apple used to have 8 per cent of market share in the global market, but in India it was less than two per cent,” says Sanjiv Krishen.

“It was difficult to sell in India, but Apple being a good machine, we managed to convince customers to upgrade their computers and start using Apple computers. But invariably what we found that we used to get orders but we were never able to fulfil those orders on time.” 

“Motorola placed an order on the understanding that we would deliver the materials within three weeks, but we could not deliver those machines in time,” adds Sanjiv Krishen. 

Then came the realization to Sanjiv Krishen that this was not the way how distribution has to be done. 

“If we have to distribute, we have to be fast. As it is difficult to get orders, it is equally important to execute the orders smoothly and quickly. Then, there should be enough funding and capital, as well as you have to carry stock,” says Sanjiv Krishen. 

As a distributor, Iris has a huge value-add to offer to the vendors over and beyond logistics and financing.

“We bring channel partners to the vendors so that the market grows and expends now in the B and C class cities from where the growth is coming. We have offices now in smaller cities,” 

The competitive advantage of Iris lies in that it has 33 centres in the country, starting from Jammu in the north to Guwahati in the east, down south to Coimbotore. “So, the spread is quite wide, and India is a very wide country. We have offices, staff, warehouses and sales tax registration in all these places,” says Sanjiv Krishen. 

Iris has warehouses in all the branch offices spread throughout the country. 

Iris gets 90% business from distribution and the remaining 10% from direct sales. Iris pulled off 70% of its distribution business from A-class cities through more than 1,100 resellers. The distributor adds 200–300 channel partners every year. However, B and C class cities are also getting prominent attention from the distributor. 

Apart from its distribution business, Iris has several other divisions. These include Domain 2000 Singapore and Iris Unified Learning, which provide training to corporates and Iris Care for hardware support. “Under Iris Computers, we have Iris Care, which is an authorized service provider for HP, IBM, Lenovo and Acer.” 

Iris supports their existing channel partners in every possible manner, which includes introducing the best product from reputed vendors, identifying the business opportunities, pre-sales and marketing support. The company intends to strengthen its channel network further to capture more business. Unlike earlier, credit limit is not an issue to attract more business. We are now looking at appointing more channel partners across all the regions in the country. The company is now looking at appointing more channel partners across all the states and regions of India. The criterion for selecting a channel partner is pretty simple; the partner should be geared for higher growth. 

Iris also intends to grow by expanding its existing product lines. At the same time, the distributor also wants to introduce fresh product lines. Some of the new areas identified by Iris for expansion are power-conditioning equipments, networking equipment and software. 

According to Iris, the major challenge in the distribution business is that of credit limit. Distribution is a very capital-intensive business. Iris has met this challenge by attracting investments into the company. 

Finally… 
Iris has warehouses in almost all the places the company is operating. “We have warehouses in more than 20 locations. We need to have warehouses in every location because we cannot afford to have double sales tax. Whether it is Jammu or Guwahati, we need to have warehouses. We have to give local VAT billing to our partners. Therefore, you need warehouses in all those places.” 

“You will have to very careful in what you are funding. Dollar fluctuations in most cases will not affect us. It will affect the principals, because they are importing the components in dollars and selling it to us in rupees. So, what happens is that their cost goes up.”

Iris Computers was recently chosen distributor by Microsoft India to sell its OEM products. The association is part of Microsoft’s endeavour to partner with the reseller community in India, and to expand its geographical presence in the country by increasing its breadth into the channel. The ease of partnership with Iris comes from Iris’s strong relationship with the premier vendors of IT hardware, including HCL, IBM, Lenovo, HP, LG and BenQ. Iris’s offerings complement those of Microsoft’s OEM team. 

Sanjiv Krishen, Chairman, Iris, commenting on the association with Microsoft, stated, “This association with Microsoft will enable us to leverage Microsoft’s OEM offerings to diversify our portfolio of products for the channel community.”