Choosing the region’s IT players

There are many technology companies in the Middle East which deserve recognition, but sadly we could only select 100 when compiling our annual ranking. Here’s the inside story on how we did it.

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By  Published  November 17, 2006

Starting a tradition is not an easy thing. Starting an argument seems to be much easier however, and we seem to have managed to do both with our decision last year to publish ‘The IT Weekly Top 100 Technology Companies’ list. While nobody seemed to agree on our rankings, most firms did seem to agree on one thing: making sure they were in the next one.

With that in mind, we have unsurprisingly decided to repeat the exercise again this year, so welcome to the second IT Weekly Top 100 Technology Companies feature.

Having gone through the process once, we were confident that we would find it that much easier the second time round; sadly this didn’t really prove to be the case.

Challenges
For one thing, we faced a lot of the same challenges that we faced last year –- not the least of which is the difficulty of deciding how to rank companies from different branches of technology in order of importance.

As last year, we also faced issues arising through the lack of transparency in the region. While global rankings of companies, technology or otherwise, can rely on large levels of market data to help the decision-making process, that information is simply not available in many instances here in the Middle East.

International firms operating here are rarely allowed to break sales figures down past EMEA level — even when they are doing comparatively well in the region and would have good reason to do so. This makes it harder to determine genuine figures as to what level of business companies are doing in the region.

Companies are often reluctant to even give headcount figures for regional staff — especially those companies that rely heavily on partners and feel that their low headcount may make them look less important than their peers.

With local firms, some are publicly listed and have to make more information available — but not all.

When you factor in that many large customers don’t like to be talked about and are reluctant to allow their name to be used as a reference site in the same way that their counterparts overseas might do, the problem seems even larger.

In any case, mere statistics alone do not tell the complete story — we wanted to give a guide to the most important technology companies in the region. We wanted to look at such factors as what companies have made the biggest contribution to developing the IT sector here — not just who is making the most money from it.

Methods
Therefore, as last year, we have used a variety of methods to calculate the Top 100 Technology Companies for the Middle East.

Where figures are available, we have analysed the data. For those companies that we do not have complete figures for, we have attempted to judge their value by comparing them to similar sized organisations.

Above all, as a news title examining the Middle East’s IT market, we have looked at news sources: who has had the most eye-catching project wins in the region; how many customers do firms have; how big are these customers and so on.

IT Weekly is in a unique position to do this because we have the resources of the largest publishing house in the Middle East to draw on — ITP and the other editorial teams for our sister magazines, as well as ITP.net, the region’s leading technology news website.

For instance, as last year, we used data from Channel Middle East’s own ranking of the region’s leading distributors to compile our distributor section.

With Network Middle East and Comms Middle East having recently held awards for their own sectors, the editorial teams of those titles were also able to help us assess the leading players in those sectors, giving us an even better insight this year into those industries.

From Itp.net we were also able to get accurate reader data about the stories that have appeared on the web site.

We were able to consider not just how many stories have been written about a particular company, but also how many hits those stories have received and how many e-mails were sent by readers, giving an indicator of how much interest there is in particular firms. Of course, this tends to be weighted towards firms with strong consumer presences — hence perhaps why a hugely respected industry name like Cisco should have decided this year to raise its profile in the consumer space.

In addition, we have used analyst figures for the region where they are available and looked at reports from the leading analyst firms such as Gartner Group and IDC.

We canvassed firms to provide us with information about their own operations and also about some of their partners. A number of people who spoke to us did so on an off the record basis; we did of course respect their confidentiality.

As well as all these data sources, we have also used a wide range of other resources: local news websites and international news publications, including (but not limited to) the Financial Times and the Economist in the UK, the Forbes Rich List, the Fortune 500, the Wall Street Journal and Reuters.

International resources allow us to get a better idea of a company’s overall importance to the industry — Microsoft’s impact on the region will be determined as much by when it releases Vista globally as by how many partners it has here in the Middle East.

Finally, we would acknowledge that no such list can please everybody or cover every firm.

While we accept that there are many more than 100 technology companies in the region that could also have been concluded, we are fully confident that each company that is in the IT Weekly Top 100 deserves to have its place.
“While global rankings of companies can rely on large levels of data to help the decision making process that information is simply not available in the Middle East.”


Sadly missed:Some firms that are not around to make the Top 100

The IT industry, like any other walk of life, seems subject to fashion. Along with inflated prices for dot.com-type firms (think Google, YouTube, MySpace), in the past couple of years we have also seen the return of the big-money technology merger (think Oracle-PeopleSoft, Oracle-Siebel, Oracle-Retek, well maybe just think Oracle).

2006 was no exception, with Oracle (again) continuing to buy firms, but a number of other companies also had serious acquisition drives this year, notably some well-established names such as IBM and EMC.

Both of these companies may well be traditionally thought of as hardware players, but both did most of their buying in the software sector; definitely the area of the industry that we have witnessed most consolidation in.

It is important to note that mergers and acquisitions are very far from being automatically a bad thing: often a company that is acquired is able to invest a lot more in developing its technology and extending its customer base.

Nor does an acquisition mean that a company disappears without trace — often a firm will continue operating as normal, albeit with a change of owner. Or it may be moved into a separate division within the new company.

Sometimes, however, firms will use a merger as an opportunity to clean out some of their product lines; therefore every big merger will leave some users wondering if that product they have just committed a large part of next year’s budget to is going to be around by the time it has been implemented.

Three we missed

Symbol Technologies: We debated including Symbol in the Top 100 list anyway, as a firm with some very interesting technology, and one which is in theory is still not yet acquired: its US$3.9bn deal with Motorola has yet to be completed.

However, since the deal is expected to go through without any hiccups, we decided to look at the benefits Symbol will bring to Motorola’s enterprise efforts in the region; Motorola was one of the biggest gainers in this year’s list.

Maxtor: Seagate’s decision at the end of last year to buy rival vendor Maxtor in a US$1.9bn deal has created a global hard drive powerhouse. The deal was completed earlier this year and Seagate has since moved to consolidate its channel strategy here in the region. While a total of six distributors are now selling Seagate and Maxtor branded products, the Maxtor office in Dubai was closed this year.

Siebel Systems: Any such list has to include an Oracle buy. Oracle’s US$5.85billion capture of its arch-rival Siebel in the customer relationship management (CRM) space was completed earlier this year. Siebel had never established a strong presence here in the region but its reputation as the leading player in the CRM space meant those who wanted it enough could get it: Saudi Aramco is understood to use Siebel technology, for instance. Oracle will use Siebel’s CRM and business intelligence apps in Fusion.

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