From an imaginative spark at a family gathering to one of the country’s top distributors, Pinnacle has certainly reached the apex of the South African channel as, this year, it celebrates its 30th anniversary in the industry.
Tim Humphreys-Davies, CEO of Pinnacle.
“I wasn’t there,” smiles the current CEO of Pinnacle, Tim Humphreys-Davies, “but I do believe the idea was conceived by Arnold (Fourie) at a family braai and it wasn’t long before he and his brothers acquired premises in Wynberg and started selling components and PCs.”
That was in 1993. And, to complement the Johannesburg head office, a branch was opened in Cape Town.
In 1994, having exposure to, and having established itself in the components space, Pinnacle started assembling its own PCs locally. The Proline brand – “Built in Africa for Africa” – was launched and, to this day, remains the company’s flagship product.
During the course of the 1990s, and quietly going about its business of local assembly and distribution, Pinnacle established itself as one of the country’s largest and leading distributors. So much so, in fact, that in 1999 Fourie listed Pinnacle Technology Holdings on the Johannesburg Stock Exchange.
But it was in the early 2000s – more specifically 2002 – that the leadership and relentless entrepreneurial spirit of Fourie really came to the fore. It was the year that one of the biggest potential catastrophes in the history of the South African channel occurred – the closing down and subsequent liquidation of Siltek Distribution Dynamics (SDD), by far the country’s biggest distributor in terms of both volumes and product ranges.
As various distributors rallied quickly round to try and pick up the pieces of SDD’s implosion – many industry veterans will be quick to tell you that it could have destroyed the whole distribution channel in those days – Fourie was quick to act.
Apart from taking over various vendor product sets such as MSI, he also saved the livelihoods of countless SDD employees by opening Pinnacle branches in Nelspruit, Bloemfontein, Durban and Namibia, staffing them with ex-SDD management and workers.
In Cape Town, Humphreys-Davies recalls, almost the entire branch of SDD in the region was absorbed into Pinnacle. This also triggered a restructure of the branch with Craig Nowitz, Rudi Thietz and Humphreys-Davies acquiring a 35% stake in the business and operating it as a franchise.
As the dust settled on SDD’s demise, Pinnacle added a final feather to its acquisition cap – specialist software distributor Workgroup joined the burgeoning stable.
As things bedded down and Pinnacle got back to its core business, the acquisition trail ran relatively cold for the group. But in 2005, it got a little hotter as Fourie embarked on the next stage of his vision. In quick succession, he snapped up TriContinental – then one of two major distributors into Africa – and Datanet, as IT infrastructure started gaining more and more prominence.
That year also saw Pinnacle Holdings buying out the local stake in Pinnacle Cape Town, with the three principals being made national directors. Nowitz was promoted to managing director, while Humphreys-Davies was appointed national sales and marketing director.
The following year, 2006, Pinnacle breached the R1-billion turnover mark for the first time – considered in those days to be the ultimate benchmark for any successful distributor.
While he’s always been quick to spot market trends – and act on them – Fourie’s crowning glory in terms of acquisitions arguably came in 2010 when Anthony Fitzhenry was looking for a potential buyer for the distributor he founded, Axiz.
As other potential suitors dithered, Fourie swooped and bought one of Pinnacle’s oldest competitors for R170-million. His boldness had once again paid off and his vision for Pinnacle was gaining momentum.
“Arnold’s vision for the group was to build scale in the different companies,” explains Humphreys-Davies. “So you had Workgroup and Axiz on one side, and Pinnacle on the other, but we all addressed different markets, we had different vendors – a broad spread across all three – and different go-to-market strategies. It’s almost like a large retailer where you can pick and choose what you need or want.”
Humphreys-Davies says that while it is important to differentiate between the Pinnacle Micro of those days and Pinnacle Holdings, there is little doubt that Fourie was the driving force behind the whole organisation until he departed in 2015.
“Arnold’s entrepreneurial spirit was tremendous,” says Humphreys-Davies. “He had that hardness that is required, but there was another side too. He had a great influence on me and a lot of other people within the company. He instilled discipline … that same hardness … a work ethic … values … that still permeate through many of us at Pinnacle. We’re still carrying that torch.
“He had – and he still has – an extraordinary force of personality.”
Humphreys-Davies has spent almost the whole of his 30-plus years in IT in the Pinnacle fold, moving from branch operations to national sales and marketing to become MD in 2012 and then into his present position as CEO in 2017. When quizzed on some of the highlights during that period, he replies that there are too many to mention. But he did manage to whittle a long list down to a few off the top of his head.
“Securing distribution rights for Dell and HP in 2011,” he begins. “That was good, having access to products to broaden our range and complement our existing vendors.
“Another highlight would be increasing our enterprise business from about 2% in 2015 to between 20% and 25% today.
“Consistently growing, and growing our shareholder returns over 30 years,” he continues. “Over the past two years we’ve almost doubled that growth – Covid growth, you could say.
“And on the topic of growth … watching our staff grow. If you look at our exco today, many of them have come through the ranks. They are a vital part of the business and to watch all of them grow has been a real pleasure. And a big high for the whole team has been winning the Channelwise Distributor of the Year award two years in succession. We all know that those awards recognise that we’re all doing something right.
“Consistently maintaining our Level 1 BBBEE status would be another highlight,” Humphreys-Davies adds. “And then there’s the transformation journey we started five years ago. The execution of that vision. I’m really fortunate to have an amazing executive team.
“Our e-commerce platform and portal, which we’re taking to the next level with our digital team,” he says. “A centralised process for resellers on their own journey.
“There are a whole bunch of highlights,” he laughs. “Doing in excess of R6-billion in revenue … there’s another one. That’s a big number for any company.”
As far as the future is concerned, Humphreys-Davies says he’s determined to see software distribution play a bigger role within Pinnacle, particularly in the medium-term.
“The compute platform is a means to an end,” he says. “What drives it is what software can do – and that drives more compute, more storage, higher speeds in the data centre.
“I’m personally excited about things like ChatGTP and machine learning – they will add value to hardware,” he says. “So the next goal in our minds is being a bigger part of the software evolution.”
In the more immediate future lies the prospect of Alviva – the holding company of not only Pinnacle, but also Axiz and Tarsus – delisting from the JSE. Humphreys-Davies says this will have little effect on the day-to-day operations of the company.
“It was driven by the group’s main shareholder who obviously saw value in it,” he explains. “But it won’t change our strategy and the way we address the market.
“It does have its benefits: value for our shareholders; non-visibility to our competitors which allows us space to deliver returns; and there’s cost-savings from not being listed,” he adds. “We will still follow good governance regulations and King principles and practices, so that won’t change. Our value systems and ethics won’t change: we want to be the employee of choice for our staff; and the distributor of choice for our vendors and customers.
“If our values are correct, and our business ethos is correct, then we’ll deliver to our stakeholders,” he says. “This is the same for every company in the group and is personally driven by Pierre Spies (CEO of Alviva).”
Humphreys-Davies admits that, even in the turbulent economic and geopolitical conditions now prevailing globally, he and his team do have a five-year strategy in place. But taking a view of short-term (six months), medium-term (18 months), and long-term (three years plus) scenarios, he says there are various goals Pinnacle will strive towards.
“Short-term, our goal is to deliver on our stakeholders’ return on equity and to grow the share of each of our vendors as effectively as possible in their defined markets,” he says. “As mentioned before, medium-term, we want to increase our focus on software, particularly in the enterprise space, and on-board more product. We want to maintain our Level 1 BBBEE and preferential procurement status. We also want to grow and align our employment equity goals, but that is more long-term.
“We want to strive to grow more relevant in digital transformation … more automation … use technology like AI … in every aspect of our business,” he says. “Perform our own complete transformation. There’s a popular quote at the moment: AI will not replace people, but people that understand and use AI will replace people that don’t. We don’t want to be left behind.
“And, by the way, we want to do all this while still continuing to do our traditional business as well as we do,” he says.
Thirty years is a remarkable milestone for any modern company, especially one that’s been steeped its whole life in the local distribution channel – a sector notorious for its constant upheavals, cut-throat competitiveness, and rollercoaster existence. It’s traditional in these types of articles to toast the anniversary and look forward to another interview in 30 years’ time, but that may be beyond some of our human frailties.
But then again, who knows? That celebration might be conducted by holograms or, dare we say it, via ChatGTP or some other futuristic AI.
Messages from Pinnacle veterans …
Chris Buys joined Pinnacle in December 1997
Happy 30th birthday, Pinnacle. Wishing the company a prosperous and productive future with many more successful years to come. I’ve been a part of the Pinnacle family for the past 25 years as I’ve always recognised the growth within the company and believe the best is yet to come.
Abel MMakobela joined Pinnacle in November 1997
Wishing the Pinnacle family a very happy 30th. Pinnacle has always proved to be a company that supports its staff and therefore its staff have supported the company, even through worldwide challenges.
I have always wanted to be associated with a successful company and that is what has kept me at Pinnacle for the past 25 years.
Jo-Ann Twigg joined Pinnacle in October 1997
Wow, 25 years as part of the Pinnacle family has been amazing. Pinnacle, your people are exceptional. Looking forward to even more blessed years ahead with this amazing group. Happy Birthday, Pinnacle.
Mariette and Kobus Stander joined Pinnacle in May 1997
Congratulations to Pinnacle on the exceptional milestone of 30 years in a very challenging industry.
Both Kobus and I have had the privilege of being part of this remarkable company for the past 26 years, through the good times, exceptionally good times and even the bad. But with the dynamic management throughout the years, we never doubted the outcome. It always resulted in an even better Pinnacle. We are proud to be associated with and be part of this unique company.
We wish you all the best for the next 30 years. And we are sure that Pinnacle will just grow from strength to strength as it has for the past 30 years.