Building bridges

Industry executives and technology users were again out in force at this year’s Gitex Saudi Arabia, illustrating the growing buzz that surrounds the Kingdom’s IT market. Building relationships and getting to grip with the channel dynamics was a clear priority for many of those in Riyadh.

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By  Andrew Seymour Published  April 18, 2007

Industry executives and technology users were again out in force at this year’s Gitex Saudi Arabia, illustrating the growing buzz that surrounds the Kingdom’s IT market. Building relationships and getting to grip with the channel dynamics was a clear priority for many of those who rode into Riyadh.

News that Gitex Saudi Arabia is poised to be relocated to the newly constructed King Abdul Aziz International Conference Centre in 2008 is looking like an increasingly shrewd move by the exhibition’s organisers following another jam-packed affair at this year’s event.

With the exhibition hall resembling a building site just seven hours before the show was due to open, some might have wondered how the country’s principal IT event was ever going to get into its stride.

Yet floor space in the Riyadh Exhibition Centre proved to be at a premium as manufacturers, distributors, franchise partners and service providers demonstrated their appetite for a market that proudly accounts for more than 40% of IT spending in the Gulf region.

In excess of 600 companies spread across 300-plus stands showcased their offerings and met with visitors from inside the region and beyond. The prospect of appearing at a new state-of-the-art exhibition centre is likely to leave those who have come to regard Gitex Saudi Arabia as a sound investment salivating in anticipation.

And as well as satisfying the demand of would-be exhibitors unable to secure floorspace at this year’s show, the promise of a larger venue will hopefully persuade the long list of stay-away firms to dig deep in their pockets. On the evidence of this year’s event, A-brand vendors who prefer the easy option of exhibiting through partners remain very much in the majority.

It is unfortunate that so many leading lights shun the opportunity to invest in a booth that exclusively highlights their brand when the market is worth US$2 billion a year and the Saudi Arabian General Investment Authority claims the government has earmarked a further US$10.6 billion to drive the future development of the ICT sector.

At the moment there are too many reasons for absentees to make their excuses, not least the fact that the exhibition fails to enjoy the international recognition and allure of the Gitex show hosted in the UAE.

A dearth of international hotels and burdensome visa requirements are cited by some sources as additional factors that prevent the region’s largest IT market from putting on an even more emphatic spectacle.

An executive at one foreign exhibitor conceded: “Gitex Saudi Arabia is a good show, but we have faced some problems compared to Gitex in Dubai. The main issue is getting visas. Some of our exhibition team couldn’t obtain visas and we have had to use another third party company to assemble our stand instead, which is not an ideal situation.”

Big name vendors such as Cisco, HP and Microsoft again chose to make their presence at Gitex KSA known through partners. The latter may regret not sending a stronger internal contingent given one happy opportunist was doing a roaring trade selling pirated software disks in the exhibition car park!

Several A-brands decided it was worth making a dent in their marketing budgets to illustrate their commitment to the fast-growing Saudi market, however.

Notebook vendor Acer, mobile and IT giant Samsung and electronics manufacturer Sharp all took up prominent positions to display their product repertoires in full view of the 90,000-plus visitors that the show organisers claimed would attend the five-day extravaganza.

Organisations such as Dubai Internet City and Egypt’s Information Technology Industry Development Agency (ITIDA) also made the trip to Riyadh. “We are seeking to expand relationships in Saudi and focus on building Egypt’s image as a potential outsourcing market for IT,” revealed Wael Morgan at the ITIDA, which part-funded the appearance of 19 Egyptian technology firms.

One consequence of having few A-brands exhibit directly was that it reinforced the rising status of the Saudi distribution channel.

A number of major wholesalers — some of whom boast blanket coverage of the Saudi market — grabbed the opportunity to strengthen their reputation with both hands. Local giant BDL, which carries technology from suppliers such as Creative and FSC, increased the size of its booth by 30% this year in a bid to underscore its ambition.

The company, which vies alongside the Saudi operation of Redington Gulf for market leadership in the Kingdom, is aiming to surpass the US$200m barrier after registering sales of US$133m last year.

“The show is not a selling season as much as it is a marketing opportunity that can be used to increase awareness of new products and introduce new pricing and offers to customers,” asserted Tamer Ismail, general manager at BDL Distribution. “The Saudi market is the largest in the region excluding Iran, and due to the fact that this market is very much affected by neighbouring markets — especially Dubai — Gitex KSA remains a very important show.”

Other exhibitors also placed a high value on the opportunity to build brand pedigree at both Gitex and its consumer-focused sister event Computer Shopper, which ran simultaneously.

“Our participation at Gitex Saudi Arabia is to maintain our presence and leadership in the IT retail market — not only in terms of sales, but also in terms of image and perception,” explained Dennis Datu, marketing manager at Jarir Bookstore, a leading retail and corporate outlet for names such as Dell and Toshiba. “The premier IT event in KSA is therefore an invaluable tool towards the achievement of our goals and objectives,” he added.

Using the show to inform consumers about the latest technologies and price points remained an important task for many of the volume and value distributors present in Riyadh.

Al Rammah displayed a wide array of connectivity solutions from Taiwanese networking firm Planet and US-based Netgear, while Nahil marketed HP’s latest PC hardware and Western Digital’s storage portfolio.

Nahil’s appointment as an FSC distributor also led a slew of new partnerships announced at the show, including a landmark deal between 43,000-strong Indian IT services provider HCL and Saudi systems assembler AEC. The agreement sees the pair jointly implementing integrated IT solutions in the Kingdom.

“This alliance is indeed an important milestone for the Saudi IT space as it merges HCL’s global thought leadership in IT with AEC’s rich experience and business leadership in the local market,” commented Kiran Bhagwanani, country manager for India and Middle East at HCL.

ICC, meanwhile, emphasised the extent of its business model by promoting its solutions division alongside its flagship PC assembly and distribution units for the first time at Gitex KSA. Elsewhere, distributor Mishaal Al Sudairy (MSO) showcased products from a number of leading brands including AMD, Logitech and Microsoft.

The company also fronted the launch of Norton 360 — an all-in-one home software package that Symantec claims eliminates the need for users to buy multiple security products.

The appearance of so many renowned local distributors at Gitex Saudi Arabia merely served to accentuate the integral role that indigenous providers play in the market, especially as most of the Dubai-based distributors known for professing their commitment to Saudi were conspicuous by their absence.

With research houses adamant that the Saudi market is poised for further double-digit growth during the next 12 months, a compelling annual exhibition that reaches out to both consumers and commercial enterprises is vital to the IT channel’s progress.

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