Show business

With the region’s largest trade show over for another year, it’s time to assess the winners and losers from Gitex 2004 and identify business issues that will inform channel development in the year ahead. From hardware to IT services, Gitex positioned the Middle East IT market on the global business stage

  • E-Mail
By  Alex Malouf Published  October 27, 2004

Asian invasion|~|siemensgirls-side.gif|~|Siemens inspired the throngs of onlookers with its product line-up|~|Gitex 2004 has come and gone and all in the channel are taking a well earned rest after another hectic week (or weeks) of madness and mayhem that takes place annually in Dubai. The big names vied with each other and attempted to trump their rivals with the most impressive stand. Dell did a deal to advertise inside Gitex and outside, and full marks go to the American colossus for what many considered a marketing coup. Smaller Dubai-based players spent their time meeting channel partners from around the region and making new acquaintances. Despite the claims from the World Trade Centre organisers that numbers were up on 2003, estimated at 100,000 visitors, more than a few attendees were heard to mutter about lack of numbers compared to last year’s event. “There are fewer people [at Gitex] but the quality of attendees is high,” commented Christoph Schell, SPO manager International Sales Europe (ISE) at HP. “I am seeing a different type of visitor here now — very high level with excellent IT knowledge and concrete ideas about technology patterns for the next few years. This is completely different to a few years ago. It is an interesting development and good for the industry.” The major difference between this year’s event and last year was the number of Asian companies in attendance. Gitex 2004 was a veritable Asian invasion with traders from Taiwan, manufacturers from Shenzhen and technology companies from the East coast of China. It seems somebody has spread the word to Far East channel players that there is still growth in the IT business, and that growth is eminating from the Middle East. One delegation headed to Dubai from that other regional trade hub, Hong Kong, to sample a taste of the Middle East. “We have really been beating the drum and telling our IT companies about this place,” explained Jeff Ambjorn, Middle East director for the Hong Kong Trade Development Council. “They have always put their kudos in America, Europe and South East Asia before but we have been telling them that the Middle East is a new untouched market that you guys haven’t visited before and whatever the situation in Iraq or Afghanistan, Dubai is a safe place to do business, come and have a look at it for yourself. We are hoping to break the ice in the Middle East for our companies during Gitex and they have seen for themselves the business they can do here.” The Asian delegation braved Dubai’s curries, its hot and sticky climate, as well as its comparative proximity to Iraq (which many were actually worried about), to make an appearance at Gitex in the hunt for distributor and reseller partners. Fighting through all the multimedia cards and assorted gadgets, there were some products on display that caught the eye and more than a few vendors and local distributors were taken by the IT offerings. Expect a flurry of announcements in the coming months with tie-ups between regional distributors and components vendors based in Taiwan and Hong Kong. ||**||Plenty of noise|~|DICmusicians-side.gif|~|Playing the tunes: DIC's sweet music attracted the crowds|~|Onto the event itself and the new layout. Having identical product segments grouped together in certain areas won plaudits among both vendors and visitors even if the decibel levels did not. “It was a great idea for networking to be separated from software companies and with each division having its own hall,” enthused Wael Fakharany, regional general manager Middle East and North Africa at 3Com. “It is if a couple of multiple shows are running at the same time. But the drums proved very annoying and I was thinking of filing a complaint.” On the technology side anyone arriving at Gitex and planning to find any technological breakthroughs was sorely disappointed. Networking, wireless and consumer products proved to be the mainstay of innovation but there were a host of new vendor faces, most noticeably Computer Associates (CA). Participating in their very first Gitex, the team at CA were hungry for action. “CA is now truly in the Middle East and we are here to really lend the most support we can to our end customers as well as our channel,” said Ned Jaroudi, regional marketing director at CA. “In this market the pie is getting bigger and there is room for everyone. At this year’s Gitex we are out to prove that we provide the full enchilada, the whole solution. We are not just here to be in a trade show and do a lot of hype for nothing. We are going to roll up our sleeves, go down to the trenches and work with the end-customers and the channel and get dirty.” The nooks and crannies of Gitex proved the most exciting places to be, with the new faces telling the most interesting stories. Iranian software consortium Sanaray was at Gitex talking up the opportunities for the channel in Iran, an ICT market it estimates will be worth over US$17bn by 2007, and plans to be back new year with a bigger and bolder strategy. “Many companies would like to come to Gitex,” stated Parviz Nasseri, CEO at Sanaray. “We could not bring as many firms as planned but I do hope that next year we can have a much larger booth. Whereas this year all you saw were software companies, next year we plan to bring all sorts of information and communication technology companies.” Several big distribution names decided to stay away and preferred to either meet in the plush confines of Dubai’s five-star hotels or wine and dine clients at events. Almasa took a floor at Emirates Towers and Empa did the same in the Fairmont, while Tech Data’s crew meandered round the halls of Gitex. “We didn’t have a stand this year, as we find that there is more value in having scheduled meetings and greeting people face-to-face,” explained Armagan Demir, sales and marketing VP at Empa. “You get so many interruptions when you are in a booth. We did try to book a meeting room at the show but they said you can only book a room if you are an exhibitor.” ||**||On the Street|~|woman-talk,men-listen-side.gif|~|Standing to attention: security was beefed up for the visit of official dignitaries|~|Away from the rush of Gitex and to the pandemonium of Shopper. Anybody lucky enough to arrive at the Exposition hall after being backed up on the airport flyover for a couple of hours had to fight through the crowds before they would even get a glimpse of a laptop or digital camera. Gitex Computer Shopper in Dubai witnessed a sales bonanza as more than 100,000 eager punters flocked through the doors in what was pure chaos. The visitor tally passed the 100,000 mark and the official count was 108,000 visitors over the week-long event, up 35% on last year’s numbers. The shock of Shopper was the success of Emirates Computers and the numbers they claimed to be doing in hardware. “We did US$8.5m of Dell,” exaplined Hani Harik, president of Emirates Computers. “Sales were split among Shopper, retail outlets, online sales and through Technoworld, our distribution subsidiary.” Other clever retailers also spread their bets and counted on the Gitex frenzy to shift sales and make monster figures. “We committed to significantly more inventory and set up costs to really capture the market,” explained Scott McKay, GM at Plug-Ins. “While we had unbelievable sales at the shopper, we also achieved earth shaking sales increases at all our stores. In Dubai, we had stores with sales up to three times higher than last year’s event.” There were a few instances of Shopper capers involving retailers and vendors. “Some resellers were selling notebooks and mislabeling specifications — something we were afraid would happen,” admitted Braum, business development manager for mobile products at Acer Middle East. But almost immediately after it was spotted the channel culprits were put to rights. Two well-known processor vendors squabbled over the size of their stickers in Shopper with one dolloping out MDF funds and the other responding in kind. All’s fair in love and retail. Down on Dubai’s Computer Street business picked up for traders suffering from credit woes. “We have seen big numbers especially on laptops and monitors,” said a gleeful Gaurav Brahmwar, director of Dubai retailer Computer Depot. “At the start of Gitex we had stocks touching the ceiling and now the boxes are only piled a few feet high. It’s been a good event for sales.” Vendors confirmed the sales bonanza on the Street. “We had a reality check after Gitex and I am pleased to say that the channel is hungry and thirsty for more products,” explained Philip Ashkar, sales and marketing director at Acer Middle East. “We did our homework on Gitex, studied the competition, and got the numbers right.” On a sour note, some second-tier resellers are up to the same old tricks and no sooner had Gitex finished than there were reports of selling below cost. “I’ve already seen some in the Street undercutting distributor prices,” explained an exasperated Sunil Dandawate, managing director at Kobian Distribution. “To see this so soon after what has been happening here is very sad with the amount of money that has left the market.” One reseller has allegedly done a runner with US$1.8m and credit issues still plague Dubai’s channel. With CeBIT in decline and Comdex at the end of its life, Gitex may be the last bastion of trade show culture on the global map. But far from going into a tailspin, all agreed that Gitex was getting bigger and would continue to grow into the future. “A lot of vendors won’t even go to CeBIT any more and I haven’t been myself for two years now,” said Jeremy Butt, EMEA head of channels at Symbol Technologies. “I always hated that event but Gitex is different. It has a buzz because there is real business going on. I’ve been involved in a number of meetings during the time I have been here and people are talking trade. If you go to other shows all you see is people collecting freebies.” Whether there for actual business or as a journalist, Gitex proved to be a classic show once again. Who can forget one senior vendor manager throwing his laptop on the floor to prove its strength, or how one local channel player could have such a lavish stand despite allegedly owing huge amounts on credit to distributors? An unforgettable experience. ||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code