All Systems Go

Armagan Demir, group manager for small business and transactional partners at Microsoft Gulf talks through the efforts that the software giant is making to engage with the regional system builder community

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By  Stuart Wilson Published  May 1, 2006

|~|ademir200.jpg|~|Armagan Demir, group manager for small business and transactional partners at Microsoft Gulf|~|Armagan Demir, group manager for small business and transactional partners at Microsoft Gulf talks through the efforts that the software giant is making to engage with the regional system builder community

CME: What exactly does your role at Microsoft Gulf now involve?

ARMAGAN DEMIR: I am handling the small business and transactional partner group. That means that my area of responsibility is in the partner and channel space. Microsoft splits partners into three types: solution partners, transactional partners and business solution partners, and these are consolidated within the SMS&P group. In the transactional partner group you have system builders, resellers, retailers and wholesalers — the partners dealing mainly with Microsoft OEM and retail product lines. This is what I handle and in addition we also look after the small business customer base and have involvement in marketing activities to expand business in that area.

CME: Does your group also handle the sale of OEM product to distributors within the region?

AD: The distribution account managers are part of the team. We do have two types of distributors: OEM distributors and finished goods distributors. Finished goods is mainly the volume licence and retail products. At the moment all of our distributors in the Gulf carry both contracts; they are simultaneously buying OEM and finished goods.

CME: There were recent changes to the OEM purchasing terms. Was this welcomed by distributors?

AD: It started on the 1st March; that is when we switched to type one billing. There were some concerns from the distribution channel at first but they are not there any more. The main concern was the financial impact on their operations but Microsoft’s credit and finance team made the necessary adjustments to help them through this. It is important to point out that it is not an upfront payment — it is still a payment with credit terms but it is based on when they buy from Microsoft, not when they sell out to a customer. That is the difference.

CME: How vibrant is the system builder channel in the region? How does it vary country-by-country?

AD: Our territory covers the Gulf with the exception of Saudi and also includes Pakistan. When you look at each individual market the dynamics do vary significantly. Pakistan for instance is a very big systems builder market. A significant part of the business for many partners in Pakistan is system building. In the Gulf the trend is slightly different. Most partners do some system building but also sell some branded systems and offer some IT services as well in areas such as networking.

CME: So are there now some major local assemblers in Pakistan?

AD: You now have major players such as Inbox, Raffles and Softwise in Pakistan. It is a large market for system builders but there are also many partners working in this area. We have local system builder teams based in Karachi and Lahore and they interact on a daily basis with the tier one accounts. It is important for us to do marketing programmes, promotions and activities with the system builder community. We now do a regular channel guide explaining all of the products that we have available and the different programme benefits available to system builders. There are regular updates for the channel and licensing guides are also available.

CME: Is the strength of local assemblers in a given market related to the spending power of buyers?

AD: I believe so — although that is a personal comment. When you look at markets worldwide there is definitely a correlation.

CME: How much have you been able to do in markets such as Yemen?

AD: We do not have a local office there yet but we plan to get closer to the system builder community in Yemen this year. Right now we rely on our distributors operating out of Dubai to engage with Yemen’s system builder community but we are planning to attend some events alongside other vendors. Our difficulty in Yemen is that the intellectual property laws are not in place so it is difficult for us to develop the market the same way as we do elsewhere in the region.

CME: Are you making progress against piracy in the region? Is that also related to spending power on a country-by-country basis?

AD: Piracy is not only related to spending power — it is also related to availability and local enforcement. Actually, when we talk to our system builders they want to promote PCs with genuine software because they know the value that they can add. It is an opportunity for them to make more margin as the average selling price increases. They also have the opportunity to provide more after-sales services and the customer sees more value in the relationship.
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