The new model army

Innokat has a unique business model for providing IT services — form distinct firms for each sector. Mohammed Kateeb, CEO of Innokat, explains how it works

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By  Caroline Denslow Published  January 15, 2006

|~|kateebbody1.jpg|~|Innokat is always looking for companies to bring to the Middle East as partners, emphasises Mohammed Kateeb. |~|Innokat is a new entrant to the region’s IT service provisioning space. In a market where specialisation is a valuable selling point, Innokat takes that feature one level higher by following a distinctly unique approach to the market. Instead of defining divisions within the Innokat umbrella to serve the various vertical markets it serves, the company has decided to create standalone companies, each one focusing only on one industry. At present, it has created three start-ups catering to the banking, telecommunications, and education sectors — Fusion, CreInno and Mazik International, respectively — with plans underway for a fourth company. It makes this possible by partnering with other specialists: Arab Bank and Intracom for Fusion, Creat for Creinno, and Mazik USA for Mazik International. Mohammed Kateeb, chief executive officer of Innokat, talks to IT Weekly to discuss the merits of its business model and the kind of response the new approach gets from companies in the region. Do you see Innokat more as an incubator or a systems solutions provider? We are actually a combination.I wouldn’t want to say incubator because that’s a loaded question — that we believe that we have the ability to address different industries — but we need focused companies to go after these industries. What we are offering is, Innokat is the platform that allows the creation of these different companies. I don’t know if you’ve heard but around six months ago we formed with Arab Bank and with Intracom Fusion, which is another company that addresses the financial sector, specifically the banking sector and we are offering full solutions to innovative solutions for our banking sector. So, we are having the banking sector Fusion, we have CreInno in the telecom and value-added service providers, and we have also Mazek International, which is with Mazek USA, to bring educational software and solutions to the Middle East. As you can see, we are actually creating those companies that address different industries. How many companies are you planning to form? We actually, right now, try to focus on what we build and try to get them up and running, but we believe that each sector that we are interested in we’ll probably end up building a company that addresses that sector. For the first two years we said four would be the actual four sectors that we are focused on, but we are always looking for great companies to bring to the Middle East and to partner with. What are the four sectors you are looking at? Our objective is to create four companies. We have created th-ree so far, and we are still trying to identify the fourth company. Are you not worried that, by creating a new company for each industry you serve, you will run the risk of diluting the Innokat brand? That is why each company we create has its own team and they are running on their own, and Innokat is a systems integrator. What we offer is full teams to do integration and consulting. Each company will create a totally separate company and each has its own management and own people. We do not integrate all those companies together. Are all three companies also into service provisioning? They are service providers but they are focused providers on what we call vertical industries. Innokat is a horizontal company. We focus on horizontal technologies — technologies that are offered across the board for enterprises. But when we want to address a vertical or an industry that we feel we have to develop specific skills to go after that industry, those companies actually do service provisioning. Are these companies under the Innokat umbrella in terms of management and overall organisational structure? No, they are actually completely separate, and they have their own management team, their own CEO, and they are running on their own. What we do is we are like sister companies with Innokat, and we coordinate and work together on opportunities but they definitely have their own business plans to execute on. How do you present Innokat and the other three companies to clients? When we talk about horizontal companies we usually go with Innokat. When we talk about business continuity, security, application integration, even ILM, all these, any company or any industry can actually use that. That’s what’s Innokat’s strength is. When we are talking about value-added services for our telco, we talk about CreInno. When we are talking about educational software or educational solutions we talk about Mazik International, and when we talk about banking solutions we talk about Fusion. And usually those other companies have other partners into them, so we are really very clear on when to position each company and when to position Innokat. In the telecoms industry, you have partnered with Creat to form CreInno. What particular strenghts do Innokat and Creat bring to this alliance? Basically, Innokat is the company that understands the market. We have great relationships with our customers, even our telco operators, and we feel that we have top-notch technologists who understand the technology and the market. But we need intellectual products and we need technology that addresses the needs of our customers. And that’s why we need another provider who has that technology, and between our technical people, and our skills and our understanding of the market, and top-notch technologies, we can actually form a complete solution that operates for our customers to address their needs. ||**|||~|kateebbody2.jpg|~|When the customer is educated in the benefits of best-of-breed solutions, he likes it better than any solution from a specific vendor, believes Kateeb.|~|Are you competing directly with the likes of Cisco in the telco space? We do not compete with Thuraya and Cisco. What we do is we go to innovative solutions that are not available in the Middle East and these are usually niche solutions. We bring those solutions that are not already available in the Middle East and that’s what differentiates us. We believe that the telco has a lot of players, and big players, and we know telco operators prefer to work — when they are talking about the network — with large providers. What we do is we bring innovative solutions that are not provided in the market and that’s what gives us the edge, in that we usually have something that they don’t provide. Do you see being a new entrant in the market as a problem to establishing your name in the fiercely competitive telco space? It’s not a problem, it’s always a challenge to get your story heard. And it’s a costly proposition, but I believe that the Middle East is going through an amazing phase right now. In IT the opportunity is there and available, and I believe this is the place for creative and innovative players in the region. Is the region ready to accept your approach of promoting best-of-breed solutions and not partnering exclusively with any specific IT vendor? This is the challenge. This region has always been focused on product-focused companies. They go and look at the advertisement, they want the product and they call the resellers. To do it the other way, and educate them — to say ‘look at your problem and your requirements and define a solution that may actually have multiple players’ — this is a challenge that takes a lot of education. But I think when the customer gets it, he loves it and he likes it much more than the other approach where, basically, they run out of disk space and say ‘let’s just buy another hard drive’. This is a very tough thing because data continues to grow. You have to have data policies and standards and procedures. When do you delete the data? What are the policies to delete the data? These are the questions you should consider. Defining that is much more important than buying another hard drive. When it comes to implementing projects, does the best- of-breed approach take lon- ger to deploy than having to work solely on products from one vendor? My approach could be multiple projects, it doesn’t have to be a single project. For example, def- ining the policies for a customer can be a project, defining standards and procedures can be a project, or it can be a full project. For example, if I really don’t know what to do with my data, and my data keeps growing or I have documents and I don’t know how to manage it. So, we engage in consultation to define for them what to do with the data, and then they have a project that defines a request for proposal (RFP) for a technology implementation. We may participate in the technology implementation, or we may not participate in the technology implementation. The most important thing for us is to educate the customers in not to do the other way around, which is basically start with buying technology and then figuring out what you are doing with that. If a company puts you in charge of choosing what pro-ducts and which vendors to work with, what kind of selection process do you consider? It depends on how we are working with them. If the customer releases an RFP, then basically we look at the RFP and we look at the requirements and we talk to the customers and then in the end bring the best of breed that we think or our consultants think for this solution. If the customer doesn’t have an RFP and he wants our help selecting technology, then basically we provide them with the pros and cons of technology that fits into that and allow the company to make its own decision. So it depends where we are in the cycle and the project; the most important thing is understanding customers’ requirements before we jump the gun and recommend a technology. Seeing that you don’t have any exclusive agreements with most IT vendors, does it affect the pricing of the solutions you offer to your clients? We have very good relationships with the technology vendors. The technology vendors like our approach because they feel that it’s a good approach for the customers, and they understand how much the customers respect us to allow us to do this so they usually give us great prices. I have not had a problem where price was an issue. When we get into the project it’s not a ‘price war’ kind of project because you are not buying one single product and saying ‘he’s going to give me the cheapest product’. It’s a complete solution and the solution usually has a lot of soft skills and consultation, so we have not been faced with a situation where we are being ruled out because of the price of the technology. We can always go back to the technology provider and tell them the story and they usually like our story. Given that you deal with multiple vendors and solutions, do you have enough manpower to support your customers? We do not believe that any company can do everything on their own. Some technologies that we repeat and we do a lot of we usually have a great staff to support it. Some technologies we usually have to work with some companies that have developed the skills on that technology. It depends on how it fits in the solution. We look at it strategically that this component will keep happening in our solutions, such as WiMax for example, where we already have groups that understand the technology, so I think it’s not one size fits all. It depends on the technology. Of course, we will never be able to satisfy every single technology.||**||

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