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Sun 26 Oct 2008 12:23 PM

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Freedom to develop

Systems integrators and ISVs are feeling the pressure to reinforce their added value as vendors impress the need for partners to go that extra mile in the market place

Systems integrators and ISVs are feeling the pressure to reinforce their added value as vendors impress the need for partners to go that extra mile in the market place. Current topics leading the discussion in the open source and software arena are certainly giving the channel plenty to think about.

The call for value add may well have been coming from vendors for years, but it is often not as simple as they make out. And, with the financial crisis a cloud hanging over the IT market’s head, a clear projection of value offering is needed now more than ever.

There has also been a parallel cry emanating from the region’s political leaders. Speaking to a channel player in the software and services field recently, I was told that one of the major concerns of the Middle East’s governing authorities is the lack of intellectual capital being created here.

This is a worry that was affirmed by Sun Microsystems’ co-founder and chairman Scott McNealy’s chastising of the adoption of open source software here in his recent key note speech at GITEX. “Only six of the world’s 268 governmental open source initiatives originated in the Middle East, which means you are a little bit behind here,” he said.

He is right to point out that open source has yet to take root at the rate it has in more mature markets and that there are miles still to be travelled. Many feel that open source is a great opportunity for the channel as the total cost of ownership that can be projected to the end-user is reportedly low. But there are also just as many that insist it has yet to take off because IT spending budgets have remained liberal over the past few years, meaning proprietary operating systems are popular among the region’s CIOs.

Despite all of this, there are in fact some very good examples of companies out there that have been pre-empting McNealy’s words and working hard to create their own unique and targeted solutions around ERP and CRM systems from the likes of vendors such as Sun, Oracle and SAP. And thus, developing a whole new layer of value.

This said, there needs to be even more examples, and open source — which has failed to germinate the potential many companies were espousing a couple of years ago — is a great opportunity for systems integrators to show, in technicolour, the true value they can offer the end-user.

By developing intellectual property local to the Middle East, the channel might also be helping to alleviate some of the problems behind the skills shortage, such as creating long-term investments that will see those with resources trained on their own solutions reap the rewards. This will, in turn, hopefully attract more attention from local stakeholders.

Additionally, developing individual solutions will hopefully quell some of the worries about local intellectual property. This is particularly relevant in a time when many Middle East IT players are looking to step onto the global stage.

But vendors must be aware that developing value does not necessarily lead to specialisation. Well, not in a straightforward vertical-fashion anyway. In fact, the more value a partner can layer in their solutions, the more they are going to look to take it and replicate that in other markets or verticals.

For instance, there is a well-known Oracle partner that has been specialising heavily on the healthcare vertical over the past few years. But it has decided that it is time to diversify outside of this arena. Within the healthcare vertical the systems integrator has highlighted human capital management (HCM) as a particularly strong area and is now looking to export this to other verticals.

So, simply put, there are plenty of examples of the channel, particularly in the solutions chain, crafting a unique value proposition. There are also plenty of instances of companies using open source to do this and developing local intellectual property that will increase the regional market’s regard in the global theatre. The hope is that this will only continue. But the channel must be free to go about and develop this value in their own way, targeting whichever end-user demographic they see fit.

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