The Power List

Channel Middle East’s recent Power List profiling the diamond dozen Dubai-based distributors by sales has already generated a wealth of feedback.

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By  Stuart Wilson Published  March 9, 2005

Channel Middle East’s recent Power List profiling the diamond dozen Dubai-based distributors by sales has already generated a wealth of feedback.

First off there were the very predictable accusations flying back and forth that some companies had massaged their figures, double counted intra-company sales and also included revenues derived from business divisions that had nothing to do with IT.

Secondly, there were the companies that believed they deserved to be included on the list. Once again, they are urged to get in contact and provide the relevant figures so that they can be incorporated into future features.

The mission now is to take this list to the next level of sophistication. In fairness, several of the distributors on the list have already offered to hand over their audited accounts for inspection to verify the figures quoted. In a region not renowned for financial transparency this is a big step.

The Power List ranked distributors by sales, when in reality the true measure of a company’s success is its profitability. That’s the next step: getting regional distributors to talk about margins and take financial transparency to the next level.

And it looks like it could be happening. Almasa IT Distribution topped the inaugural Dubai-based Power List and the company has just announced its intention to hold a press conference to unveil its audited results.

Almasa Group is poised to reveal record earnings, highlight an increase in profitability and provide details of its EMEA market share in the PC storage market. The event should also offer an insight into how much Almasa Group’s various business units contribute to its overall financial picture.

Channel maturity

The growth of in-country distribution and the rollout of structured partner programmes for second tier resellers shows that the Middle East channel is maturing rapidly. These two trends are evidence of a drive towards segmentation in the market that encourages resellers to focus their business on specific customer segments and solution areas.

Samsung is one of the latest vendors to formalise its second tier reseller channel engagement with the launch of its partner relationship management system in the UAE. As more and more vendors go down this road and build web-based sales and marketing tools to assist resellers, it encourages competitors to follow suit.

Looking at more mature markets around the globe, it is clear that there is still some way to go before the availability of partner programmes is on a par with Europe or the US. Take BenQ as a prime example. In the US, BenQ’s Qreseller programme is widely respected by dealers and resellers. Surely it is now only a matter of time before more and more of these vendor schemes are transferred and adapted specifically for the Middle East market.

For such schemes to work effectively, vendors need to have a clear-cut two-tier channel structure with genuine resellers purchasing from authorised distributors. And this is happening more and more now in the region. Resellers see the value-add offered to them through partner programmes and will pay an authorised distributor slightly more for product in order to be eligible for these schemes.

Talking to distributors in Saudi Arabia recently, it is clear that they are seeing more and more resellers looking to buy from them as opposed to sub-distributors and traders buying outside the Kingdom (most likely at Jebel Ali) and moving the kit into Saudi Arabia.

This change in reseller behaviour encourages distributors to invest even more on the ground in terms of sales, marketing, support and stocking points — all good news for local resellers.

The potential exists for the Middle East IT channel to develop rapidly during 2005 but it requires buy-in from vendors, distributors and resellers.

Fixing flaws

And finally, keen followers of the security software space will no doubt have spotted the advisory put out by Internet Security Systems (ISS) pointing out a flaw in Trend Micro’s AntiVirus Library. The flaw affected a total of 30 products from Trend Micro.

The advisory, published on 24th February, pointed out that by crafting an ARJ file, an attacker could trigger a heap overflow. For non-techies out there, this basically means that a virus code could be hidden within an archive file and not be spotted.

Trend Micro is not the first security software vendor to come under ISS’ gaze. The researchers over at ISS pointed out a similar flaw in Symantec anti-virus products just weeks before they fingered Trend Micro, and F-Secure has also had to deal with a similar situation.

Anyhow, the point is, what steps do these vendors then take to fix the vulnerability and make sure that everyone affected is notified as quickly as possible?

The answer is quite a lot. As a matter of course, ISS releases the findings of its research to the vendor concerned before putting out the advisory. This gives the vendor time to fix the problem and ensure that its customers are protected.

Justin Doo, regional manager at Trend Micro, explained: “We upgrade all the scan engines. If we put scan engines or pattern files up on our active update sites, there are downloaded and deployed within our products as a matter of course. All the customers I talked to on the back of the announcement had upgraded several days before thanks to the active update component that exists in our technology.”

When companies such as ISS announce these flaws they tend to receive a sizeable chunk of media coverage. However, the fact remains that those using licensed and up-to-date products are protected as a matter of course before the advisory is circulated.

“It was a superb bit of PR for ISS and I have to take my hat off to them,” added Doo. “They knew full well that our customers were patched. There was no issue there. The real situation is they took an opportunity, they pushed it really hard, hyped it and had us paying them compliments in the press.”

“Trend decided not to have media outreach — no physical statement going out to the market,” continued Doo. “I don’t think we expected the announcement to get as much attention as it did because we had already patched it. There is no way we would leave it unpatched. Were we naïve? Possibly so.”

With security software always being touted as mission critical to an organisation’s overall IT infrastructure, the opportunity to raise concerns about rival products has become commonplace in a highly competitive vendor landscape. With some vendors keen to exploit flaws in rival products, any customer concerns that do arise need to be nipped in the bud quickly and efficiently.

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