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Thu 25 Jan 2007 04:00 AM

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On the street

Dubai’s Computer Street remains the nerve centre of the Middle East IT channel, with resellers, traders and consumers from across the region flocking to Khalid Bin Al Waleed Street to bag a bargain and make the most of the re-export services and flexible financing on offer. But the times, they are a changing for the traders plying their trade down on the Street…

Dubai’s Computer Street remains the nerve centre of the Middle East IT channel, with resellers, traders and consumers from across the region flocking to Khalid Bin Al Waleed Street to bag a bargain and make the most of the re-export services and flexible financing on offer. But the times, they are a changing for the resellers plying their trade down on the Street…

Speaking to a number of traders on Computer Street, the consensus now is that they are no longer receiving sufficient support from vendors for the retail side of their business. The traders reckon that vendors are instead opting to scratch the back of the power retailers.

Sure, the strong image, plush showrooms and heavy foot traffic make power retailers an alluring prospect for vendors in the long-term, but those who reduce their presence on Computer Street too quickly could be making a major mistake. Although power retailers can offer cheaper prices due their economies of scale, they are unable to provide the sort of specialist knowledge and one-on-one personal attention you can get from a visit to Computer Street.

One reseller on Computer Street recalls an incident involving a lady who was unsatisfied with her purchase from a particular power retailer. She asked the reseller what she could do, and as per normal he gave her sound advice. The customer then expressed her displeasure at the power retailer’s lack of product knowledge and support.

The reseller in question claims that this is not an isolated incident and believes that if power retailers invested in training their staff on products, they would not be able to sustain such low pricing policies. Power retailers could be shooting themselves in the foot by recruiting staff with limited expertise, whose advice is often limited to which laptop is the cheapest or which has the longest warranty. Some consumers are growing tired of this lack of support and are already beginning to head back to Computer Street.

As always, it’s the consumer choice at the end of the day. Power retailers can offer lower prices but they can’t replicate the personal service and value-added benefits that your friendly neighbourhood reseller can provide. You pay your money and you take your choice…

Look out for Channel Middle East’s chinwag with Khalid Bin Al Waleed Street’s leading lights in our ‘Street Talk’ feature in next month’s issue.

Is the Street past its prime? e-mail dawinderpal.sahota@itp.com with your views and comments.

Troubled times at Tech Data?

Where next for Tech Data Middle East? The regional channel grapevine is buzzing with speculation that the global distribution giant is taking a long hard look at the indifferent performance of its Middle East operation and evaluating the unit’s long-term prospects.

Tech Data UK’s newly appointed managing director Andy Gass landed in Dubai a few days back, accompanied by UK finance director Steve Russell. (Tech Data’s UK management team still oversees the Middle East operation)

Let’s be honest here, Tech Data Middle East is in a tough spot. The staff attrition rate has reached an uncomfortably high level, and the haemorrhaging of key employees shows no signs of letting up. Tech Data’s value-added distribution unit Azlan has been whimpering rather than roaring in the Middle East since its launch just over a year ago.

Tech Data did boost its Azlan team with the appointment of Sanjiv Mehrotra as a director for the Middle East business unit. Mehrotra joined the value-added distribution outfit from Ingram Micro India.

Mehrotra’s current employment status with Tech Data is unclear. When asked by Channel Middle East if he had resigned from Tech Data, ‘no comment’ was Mehrotra’s intriguing, quizzical and somewhat unsatisfactory reply.

Will Azlan get its act together in the Middle East? Personally, I’m doubtful. Let’s not forget that Steve Lockie, formerly boss of Tech Data’s Middle East business (before he took over in the UK) is now leaving his long-term employer to set up a new Middle East operation for Comstor, a value-adding Cisco distribution partner. Why is he joining a new company to do this when he could have taken on a similar role with Azlan in the Middle East?

The expensive suits from consulting firm McKinsey have advised Tech Data EMEA on its restructuring efforts. McKinsey’s pricey recommendations remain unknown. Suffice to say that many of their complex business models and advanced economic theories for distribution probably didn’t take into account the realities of operating in the Middle East.

Tech Data Middle East has also failed to build a meaningful presence outside of the UAE and the distributor remains overly reliant on one major vendor for its sales in the region.

As the subsidiary of a quoted US company, Tech Data Middle East is also handicapped by its need to meet strict corporate compliance, accounting and reporting regulations in a way that many regional rivals are not.

Distributors need operational freedom and a degree of financial flexibility to build a successful regional business in the Middle East.

Whisper it quietly, but the phrase ‘exit strategy’ is now being mentioned when senior channel executives discuss Tech Data Middle East’s future. As one former employee quipped: “I just hope that the last person out remembers to switch the lights off.”

What are your thoughts on Tech Data Middle East's future prospects? e-mail stuart.wilson@itp.com

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