By Andrew Seymour
Management changes, mergers, office closures and new partnerships – there is never a dull moment in the Middle East IT channel
Management changes, mergers, office closures and new partnerships – there is never a dull moment in the Middle East IT channel. As 2008 draws to a close, Channel Middle East looks back on the major stories and developments that have defined the market during another action-packed year.
Most people would never have anticipated the anxiety accompanying the year’s finale after the optimism that surrounded the beginning of 2008, but such is the pervasiveness of the global credit crisis that even the Middle East IT market remains a little unsure of exactly what the future holds. But while there is bound to be both conservatism and turbulence ahead, the market has entered these potentially tricky times on the back of what has largely been a progressive year for the IT channel in the Middle East. The region has grown in stature during the last 12 months, frequently proving itself to be the fastest-growing territory in EMEA as well as the location for some of the most ambitious IT projects in the industry. Vendors, in particular, have seized the opportunity to increase their coverage in the Gulf and North Africa through new partnerships, with some even putting down local roots for the first time. Sophos, Red Hat and Meru were just some of the names that opened Middle East headquarters this year, recognising that a permanent presence still counts for a lot in this market. Having said that, there was once again enough reminders that developing a sustainable business in the Middle East does not just boil down to securing office space. Networking vendor US Robotics’ quandaries were high-profile proof of that as it blamed financial reasons for the closure of its regional operation midway through the year. Even those with longevity in the region demonstrated that the evolving market landscape necessitates constant strategy evaluation. Infrastructure management software provider CA overhauled its go-to-market policies to improve its fortunes, while HP, Toshiba, Acer, Dell and Lenovo all reassessed their distribution tactics in a bid to grow PC sales. Clearly the challenges faced by regional IT companies during 2008 varied from segment to segment, although the pursuit of profitable growth inevitably remained the over-riding theme for most market stakeholders. Retailers have ridden the consumer growth wave, following the ‘bigger is better’ approach towards store size and product range, while capitalising on soaring demand for consumer electronics and mobile technology. At the same time, spiralling operating costs have forced retailers to run a tighter ship than they have in the past. In the corporate reseller space, much of the talk was about capacity and the relentless search for qualified services staff, not to mention the ongoing emphasis on specialisation. Whether it was automated solutions, AV or managed services, many integrators defined their area of expertise or opened dedicated business units. Similar developments took place in the second-tier channel, where distributors endeavoured to increase customer loyalty through innovative programmes and improved service levels. Distributors have also had to look inwards, deciding which parts of the business demanded investment and, just as significantly, which areas were expendable. And, of course, we can’t reflect on 2008 without making reference to the Dubai Computer Traders Group, which finally launched after years of being nothing more than an idea batted around between resellers. The association still has a long way to go before it is regarded as an influential force by local IT traders in the UAE, but its formation signalled a positive step for a market in need of unity. Given the current pressures that exist in the market, many companies will be satisfied if they can match their 2008 achievements during the next 12 months. One thing’s for sure though — there will be even more twists and turns in 2009.