Caught in catch-22

Meta Group suggests services players are unwilling to invest in the region while local companies remain reluctant to employ third party providers.

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By  Matthew Southwell Published  June 2, 2004

The Middle East’s services market is caught in a catch-22 situation, according to Meta Group. It suggests that large services players such as IBM Global Services, EDS, HP and Unisys are unwilling to invest in the region as outsourcing remains minimal, while local companies remain reluctant to employ third party providers due to their lack of commitment to the Middle East. “The large names are not investing in this market, but then why should they if the demand is not there?” asks Stratos Sarissamlis, vice president of technology research services at Meta Group. “Currently, the market is fragmented. This means that each deal is small. At the minute it is the egg and the chicken when it comes to services,” he says. One of the key factors holding back the outsourced services market, according to Meta Group, is the short-term tenure of local IT managers as it means outsourcing deals have a shorter period in which to deliver value. “The Middle East has many expatriate CIOs with a three to four year lifecycle, which means the focus is on short-term benefits,” says Sarissamlis. “Fulfilling something over a three year period rather than ten years is short-term [thinking] and reaping the benefits in a piecemeal fashion. This does not work,” he explains.

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