By Andrew Seymour
A diverse partner network is key to success in today’s market. Vendors outline the major challenges of operating a MEA channel ecosystem
|~|ecoibm200.jpg|~|Mourad Zohny, IBM|~|As technology requirements become evermore demanding, the need for highly competent partner ecosystems - that pull together the skills of numerous channels to create a single delivery model - is integral to Middle East success. Solution-led partner networks are now firmly recognised as a vital asset for every vendor that has aspirations to win anything more than a basic procurement contract
Many players are becoming acutely aware that they are participating in a completely different ball game to the one they may have been accustomed to in the past. The days of shifting product into the distribution channel and letting nature take its course remain perfectly valid, but that is no longer enough to satisfy the more sophisticated corporate customer. Increasingly, end-user clients are purchasing a whole array of equipment that could command expertise in anything from IP technology to enterprise server deployment, plus a set of additional maintenance services for good measure.
The need for IT contractors that can deliver a breadth of skills and products has never been higher, especially with moves by several countries in the region during the past few years to relax laws on exclusivity agreements that previously constrained the market. “In the past, that obviously created a bottleneck when it came to being able to expand,” commented a source at one vendor. The word 'ecosystem' still remains a term that some organisations in the region are uncomfortable using, although IT giant IBM wholeheartedly embraces the notion. “Anybody who can influence the customer decision as far as fulfilling their IT requirements - whether it be an ISV providing an application, a system integrator, a business partner, or a first or second tier distributor - is what represents an ecosystem for us,” explained Mourad Zohny, business partners organisation manager ME, Egypt and Pakistan.
One buzzword that remains ubiquitous is 'solutions' and that provides the inspiration for many decisions made by vendors in the region. “When you are in the business of distributing commodity goods you don't talk about ecosystems,” said Bruno Haubertin, partner and alliances sales office manager MENA at server vendor Sun Microsystems. “But Sun is a solution provider and therefore you need a different player for each kind of project.”
Sun lays claim to one of the most diverse partner networks in the Middle East, with more than 60 resellers and between 30 and 50 ISV partners. In the past 12 months it has made steps to establish a partner engagement model dedicated to the intricacies of the region and also operates a comprehensive Partner Review Board to assess the skills and practices of every partner used to fulfill a customer project. “We have 175 employees across all the countries in this region, but because of our partners we effectively have several thousand highly leveraged people working for Sun,” said Graham Porter, Middle East marketing manager at Sun.
IP telephony vendor Avaya takes a similar line. It boasts around 40 partners in the region, including traditional resellers, systems integrators and ISVs signed up to its DevConnect programme. Roger El-Tawil, channel and marketing manager at Avaya MENA, said: “We also rely on services partners because the one or two tier channel is not always able to provide a full solution.”
He cites the example of a partner which is delivering a solution to a customer but requires help with integrating an ERP platform. When that happens, a services partner is sent in to provide assistance. However, this relationship is marked out by strict boundaries to ensure one party does not compromise the other, added El-Tawil. “We do not give [the services providers] any reselling agreements for this reason of conflict,” he explained.
||**|| Customer changes|~|ecoavaya200.jpg|~|Roger El-Tawil|~|Indeed, other vendors agree that the role of each partner must always be as transparent as possible. “The key to everyone in this ecosystem working together is to have a clear definition of the responsibility of each partner when it comes to delivering a solution,” commented Zohny at IBM. “This usually requires some high level people with great experience and knowledge of the customer requirements to figure out exactly what each one of those parties is going to be delivering.”
It is also vital to remember that every element of the ecosystem is as important as the next. The distribution layer plays a vital part in Citrix's Middle East channel strategy as the access infrastructure software vendor is not structured to handle systems integrators directly. “Our distributors Mindware and US Telecommunications provide all of the logistical fulfillment and on top of that they have their own engineers in case they are needed,” said channel manager Fady Iskander.
The increasing maturity of the market and a more conscientious attitude towards quality assurance in the region are having an equally strong bearing on the importance that vendors are placing on refining their channel ecosystems. Although the Middle East still displays a degree of scepticism towards the concept of outsourcing, it is coming to grips with the fact that solution fulfillment demands the input of multiple providers.
“Customers are becoming more knowledgeable and educated about their requirements,” continued Zohny. “Maybe in the past this was not the case. Customers were not really clear on what they needed so they were ordering the hardware alone and then figuring out they need another piece of software, and then somebody to integrate all of that. These incidents used to happen independently. Nowadays I think the customer can figure it out right from the beginning and then acquire the end-to-end solutions altogether.”
Perhaps the single biggest influence on the changing dimensions of the Middle East ecosystem model is the increasing dominance of the software channel. As the emphasis shifts from the vendor supplying the infrastructure to the company providing the application, the ecosystem is starting to centralise around the software partner.
As this trend gains momentum, access to a solid base of ISVs is fundamental. El-Tawil at Avaya said: “Today networks are, to a certain extent, commoditised and not the most important part of the solution. Customers know their requirements and they can shop around. What differentiates them is the applications they use and how they are integrated. Engagement with the customer is happening at an applications level because it is enabling businesses to do things differently and improve revenues.”
Stephane Rejasse, managing director Middle East at Fujitsu Siemens Computers, believes the rising number of ISVs in the region is forming a strong recruitment base. “For the past 12 months we have put more and more resources on solution selling and high-end complex solution selling, and you definitely become very close to the ISVs.”
This development is expected to become more pronounced as the market attracts more outsiders with expertise in sectors where specialised skills are in demand, such as oil and gas, and telecommunications. “In Dubai you find more and more ISVs,” continued Rejasse. “You can see today that some big system integrators, and ISVs as well, are coming here from India, doing business in Dubai, and using Dubai to expand through the Middle East and further north or west.”
||**|| Channel co-opetition|~|ecosun200.jpg|~|Bruno Haubertin, Sun |~|With the software element of a deal holding increasing weight, the issue of who actually owns the customer remains more in the spotlight than ever. Any contract that involves the deployment of services from multiple providers will always require somebody to take the lead aggregator role.
“Even though we don't sell to the end-user some of the large corporations ask us to be the prime contractor,” said Rejasse at Fujitsu Siemens. “And that's when you gather the right team to fulfill the need. Very often the client likes to have the liability on us because we are there for the long run. If something is wrong there is somebody to talk to,” he continued.
Citrix is another vendor which refers all business back to its partner community. Channel manager Fady Iskander admitted there is still a tendency for Middle East customers to approach it directly, but its consultancy arm will always size up the deal and create a pilot that its partners can scale up. “We will recommend partners according to technical expertise or whether they are strong in a certain sector and then give the customer a choice of three partners,” he explained.
While vendors have an important role to play in terms of delegation, the general feeling is that channel companies now hold much more sway than they did in the past. Haubertin at Sun acknowledged: “If you look back at the Middle East market 10 years ago, the customer would always like to see the vendor. But more customers are now relying on the partners and that has been a very big change. Big partners are now managing projects, and the ability to finance projects has gone up tremendously.”
And while good old-fashioned stubbornness will always present a barrier - particularly when it comes to competitors working alongside one another - partners in the Middle East are clearly learning to put their differences aside. Zohny at IBM said: “The concept of co-opetition is sinking into the partners. I think medium-sized partners and small partners have started to realise that to deliver an end-to-end solution they might need to partner with somebody else so that together they can deliver the whole thing.”