Making hay while the sun shines

‘Making hay while the sun shines’ is a phrase software vendors that don't hail from the US, and can operate freely in Iran, know and love. These vendors can take advantage of the massive opportunity that the market represents in the wider regional context while some of their US counterparts are forced to sit on the sidelines wondering if they will ever get a game.

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By  Stuart Wilson Published  August 3, 2005

‘Making hay while the sun shines’ is a phrase software vendors that don't hail from the US, and can operate freely in Iran, know and love. These vendors can take advantage of the massive opportunity that the market represents in the wider regional context, while some of their US counterparts are forced to sit on the sidelines wondering if they will ever get a game.

Taking advantage of current favourable conditions because they may not last forever, software vendors originating from outside the US are making the most of the situation.

Those software vendors that are still subject to export controls — especially those focused at the enterprise level — are looking on jealously as the barriers to entry that they will face, should embargoes and trade restrictions ever be lifted, move inexorably higher.

What we have now is a situation whereby certain software vendors are able to operate freely in Iran, selling complex software, solutions and services, simply because their country of origin means no trade restrictions are in place.

When you take a step back, you really start to see the futility of the existing restrictions that remain in place for US software vendors. Is anything actually achieved by preventing them from selling into Iran? No is the simple answer. It merely drives Iranian customers into the arms of alternative vendors from different countries.

The sophistication level of the technology that Iranian customers can purchase from these companies is on a par with anything that the US software vendors could offer if they were allowed to. So what is really being achieved by embargoes other than giving a specific set of vendors a free run in a market where IT spending is already on a par with Saudi Arabia in terms of scale? Not much in my opinion.

I’m talking specifically about enterprise software here because I think that is the one area where vendors under embargo really suffer.

It is not too difficult for US hardware vendors facing trade restrictions to make sure that the necessary boxes that they can sell into other markets eventually find their way into Iran. They can turn a blind eye, blame it all on downstream channel partners and claim that they had no knowledge that it was happening if anyone should ever question exactly how their kit ended up in Iran.

It happens and we all know it happens, even though some vendors and even distributors prefer to pretend that it is does not. That’s fine and I can understand the reasons why it is happening.

However, for enterprise software vendors it is a different story. It is pretty difficult for an enterprise software vendor to plead ignorance if a large software installation occurs in Iran. This needs to be done by a highly skilled team of implementation experts, consultants and service professionals.

It is not the sort of project that can be sneaked through on the quiet. You can’t fly in a team of crack software engineers under cover of darkness to do the project and get them out again before anyone notices. And you can’t train up a team of locals without drawing attention to the fact.

Then there is the issue of getting paid for a project. The great advantage that the hardware vendors have is the fact that they are selling a physical box. If you sell it into the market at another location you get the money and leave it to the channel to move it along the chain to reach the end-user wherever that may be.

It is just not that simple when it comes to the enterprise software space and this means that those vendors not subject to export restrictions are currently pushing hard to make hay while the sun shines for them in the Iranian IT market.

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