Vendors to increase Middle East focus in 2007?

IDC expects vendors to turn to their operations in emerging markets such as the Middle East to stimulate growth over the forthcoming year. The market intelligence provider expects worldwide spend on IT to grow by a modest 6.6% in 2007, and claims that this will spur industry leaders to take chances and explore new areas for growth.

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By  Dawinderpal Sahota Published  December 12, 2006

IDC expects vendors to turn to their operations in emerging markets such as the Middle East to stimulate growth over the forthcoming year. The market intelligence provider expects worldwide spend on IT to grow by a modest 6.6% in 2007, and claims that this will spur industry leaders to take chances and explore new areas for growth. Although the emerging BRIC (Brazil, Russia, India and China) countries will continue to contribute to growth, the Middle East market will show its early potential as the new hot market in 2007 along with emerging Asian countries, North, East, and West Africa and Latin America’s ‘Southern Cone’. As larger companies begin to shift their focus towards such emerging markets, this globalisation will result in a ‘hyperdisruption’, according to IDC. Vendors will adopt new approaches in order to maximise their market share in these countries and will begin to shift their focus towards SMBs. IDC anticipates this is likely to have an unsettling effect on the channel. Frank Gens, senior vice president of research at IDC, said while overall IT market growth will appear almost “boringly moderate”, its impact will be the opposite. He reckons that as IT market leaders step up their relentless hunt for growth, there will be many disruptive shifts. “We will see channel-oriented players going more direct and direct players developing radically new channel strategies,” he said. Gens claims that with the importance of small businesses growing vastly, he expects lines between software and services to continue to blur. “There will be less distinction between business and consumer players and technologies,” he added. As the search for market opportunities brings SMBs further into the forefront, the ability to scale-down offerings will become critically important for many IT vendors and software vendors will have to step up their ‘software-as-a-service’ initiatives. Further disruption will come from online and offshore services players pushing into the SMB market with innovative new offerings, becoming prime targets for acquisitions in the process. “These disruptions will force many market leaders out of their comfort zones, and open up new opportunities to those that choose to surf with the disruptive tide, rather than stand against it,” concluded Gens.

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