Opportunity knocks for HP Middle East

As HP’s senior VP and managing director, EMEA and Technology Solutions Group, Francesco Serafini is a man with his finger on the pulse of the IT market. He spoke exclusively to Channel Middle East about investing in Saudi, the risks of doing business in the region, and finding a successor to Joseph Hanania.

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By  Administrator Published  June 1, 2007

Earlier this year you visited Saudi Arabia to stress HP's commitment to the Kingdom. How did that trip go?

It was an interesting visit. I think that the maturing of the country will take time, but there are a lot of resources there. I did get the views of several people from the industry and the government and so on. They are trying to attract and accelerate investment and there are some major projects there from the government - six to seven new cities. I believe you can observe a lot of energy about making things happen and this is one piece of the pie. The other pieces are people wanting to go there and how we can stay there and so on. It is a little bit more challenging, but it is a huge opportunity.

What sort of inward investment is HP making in KSA?

We have done a couple of things. We have put KSA as a single country and this was well received locally because they don't like to be connected to another operation. The second part is trying to increase the investment, specifically in the service area. Product is one thing and we have good channel partners there, but we need a better service capability and we are working around that. I believe that Cisco has a huge business there - all these cities will be networked so it is easy business for them at the moment.

HP has just divided its International Sales Europe (ISE) region in half, creating separate CEE and Middle East, Mediterranean and Africa (MEMA) territories. Why have you decided to make that move now?

Because the size of the business is very large and we want to give that business more visibility. When you look at the portfolio of the company, starting from consumer to midmarket to enterprise, there is a huge opportunity for growth and we believe that with more focus it will help a lot. A single region with 50 to 60 countries is not too easy to follow. The other lesson we learnt when we opened a direct presence in one of these countries is that the business is just booming. The volume is not billions, but you can move easily from nothing to US$50 US$60m. When you multiply that by the number of countries it is a huge opportunity.

So you feel that you can justify the investment?

I think there is a lot of support. There is a common view about the BRIC countries and MEA is also on the radar. In Eastern Europe and MEA there are 1.5 billion people - the same amount as China. Now look at the portfolio of HP and you'll see why it is important for us to be there. GDP is going up, IT investment is going up and consumer spending capability is going up. PC penetration is very small so if you look at the return over five or six years it represents a large opportunity.

How important is it to develop the skills of partners in the region?

I think it is critical and it is one of the areas that we focus on. I believe we are starting to see more skilled people, but we need to continue this process. For partners we are continuing to invest in more education - making sure they are able to provide the skills. And the third dimension is management. We want local management, but we need to do a lot to develop and retain these people. When you have good people it is not always easy to retain them because they are in demand in the market.

How do you as HP mitigate against the risks of doing business in the Middle East?

That is a good question because the region can have challenges in terms of stability, but on the other side it is an area where there is huge investment and I believe that local investment has really started to attract more investment from the locals. We try to balance our presence in multiple markets. When you talk about centres of expertise we make sure that we spread this across more than one country. We cannot drive political stability, we have to live with that.

How are your efforts to replace ex-Middle East managing director Joseph Hanania going?

The replacement will be announced soon and we are working on that. Joseph made a big impact - he was very important for HP in the region. From the other side it is very important to put in new blood that can be good. I think it is very important for the Middle East - we want to invest there and will fix this very quickly.

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