By Stuart Wilson
Emitac has become the first local IT company in the Gulf region to be awarded Gold partner status for HP’s OpenView IT management software products. The IT group is also gearing up to implement the second stage of its regional expansion plan.
Emitac is poised to announce the signing of its latest joint venture to expand its regional coverage into Kuwait. The IT group, which has 350 staff in its UAE operation, has also boosted its recognition in the IT management software space after being awarded Gold partner status for HP’s OpenView software. Although global systems integrators operating in the Middle East already hold Gold status, Emitac is the first local company in the Gulf region to receive the distinction.
“We are finalising the joint venture agreement with a partner in Kuwait and are also in discussions to expand into Egypt and Saudi Arabia through similar agreements,” says Suhail Issa, CEO at Emitac. “These deals mark the second stage of Emitac’s regional expansion plans. In 2003, we built coverage in Syria, Jordan, Iran and Qatar through joint venture deals. We are also closely monitoring the situation in Iraq where we see huge potential. The main consideration when looking at Iraq is the safety of our employees. We are monitoring the market closely and already have connections to the Iraqi channel through our business partners.”
Emitac pulls in around 50% of its sales from its distribution business. The remainder is derived from the deployment of IT infrastructure solutions, software solutions and business units focused on specific verticals such as banking and healthcare.
“I expect this percentage split to remain broadly similar during 2004,” says Issa. “But overall sales are forecast to climb at least 22% from the full year figure of Dhs502m (US$137m) in 2003 as the new joint ventures are launched.”
Emitac’s joint ventures are typically a 50:50 ownership split which Issa compares to a franchise model: “A local team runs the business in each country but the strategic business model is decided at Emitac’s headquarters. This is then rolled out at a local level.”
HP’s OpenView software is a core piece of Emitac’s IT infrastructure solutions business. “Many companies need help assessing the IT infrastructure that they have in place and managing it more efficiently,” adds Issa. “We started working with HP OpenView in this field three years ago and became a Silver partner a year ago. Having Gold status helps Emitac distinguish itself from the competition.”
Making the transition to selling IT infrastructure solutions and services is not an easy evolution to attempt. For Emitac, it has involved training up a large team of certified professional services staff as well as training specialised sales teams. This type of solution selling typically involves a lengthy sales cycle and an ability to relate to the customers’ business processes, not just an understanding of their basic IT needs. This type of development does allow channel companies such as Emitac to bring more value-added activities into their business mix and insulate themselves from margin pressure afflicting hardware sales.