eChannel 3rd June 2007

“Neighbours, everybody needs good neighbours, with a little understanding…” Admittedly not the classiest introduction, but nonetheless a timely one given the first official organisation uniting computer resellers on Dubai’s Khalid Bin Al Waleed Road is close to being launched.

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By  Andrew Seymour Published  June 3, 2007

Editorial Leader|~||~||~|

Good Neighbours

“Neighbours, everybody needs good neighbours, with a little understanding you can find the perfect blend…” Admittedly not the classiest introduction, but nonetheless a timely one given the first official organisation uniting computer resellers on Dubai’s Khalid Bin Al Waleed Road is close to being launched. You’re probably wondering what kind of parallels can be drawn between the reseller channel and an aging Australian television soap popular among European audiences. The answer is there aren’t any, except, perhaps, for a lingering belief that both have left their best days behind them. It’s for this very reason that the imminent formation of the Dubai Computer Traders Group (DCTG) — made up of resellers and retailers committed to weekly meetings that address all manner of issues concerning them — will prove to be a symbolic turning point for residents of Khalid Bin Al Waleed Road. Curiously, in an environment where IT dealers have traded side by side for the past 25 years — both as competitors and neighbours, friends and foes — there has not been a formal association to coalesce resellers and promote their cause. It is thought that more than 2,000 computer dealers operate in Dubai when you include the swathes of resellers and retailers trading in and around locations such as the Al Ain Center, Al Khaleej Centre and the WiFi Computer Zone. These resellers play a highly influential role in the dynamics of the wider Middle East and African market, not just Dubai. They are an essential ingredient of the re-export and sub-distribution chain that provides such a vital channel into some of Africa’s most challenging markets, not to mention South East Asia, the Gulf and even Europe. There are many manufacturers whose position in the Middle East would be weakened considerably were this conduit eliminated. So why then is it imperative for resellers on Computer Street to join arms and pledge their commitment to an affiliation now? After all, the companies that will become members of the DCTG are long-term fixtures in the market and have proved they are more than capable of surviving in cutthroat conditions. There are multiple answers to this question, but none as significant as the fact that Dubai resellers belong to a dramatically different landscape these days. Make no mistake about it, the emergence of a slick and sophisticated consumer electronics channel has made life awkward for traditional consumer-focused dealers and retailers. Customers are increasingly making these new-age digital stores their first port of call when they want to source IT equipment. Few conventional resellers competing in this space possess the marketing power, product range or financial mechanisms to persuade them otherwise. It is clear that a ‘them and us’ situation has formed, which just five or six years ago would have been inconceivable. The consequences have been far-reaching, even if not immediately obvious. Sources on Computer Street say some dealers have become more ruthless, using price as the principal weapon in an attempt to steal back their thunder. One of the DCTG’s objectives is to drive transparency in terms of pricing structures, thus protecting profitability and ensuring members’ skills are appropriately rewarded. Resellers have been undercutting each other in areas such as basic PC repair and maintenance services to the extent that it is starting to undervalue the profession. As one Computer Street reseller moaned: “People have been charging US$14 for the assembly of computers. Do you think it is worth it? Today, if you go to a cobbler he will charge you US$7 to cut your shoes. So where does that leave the standard of our industry? We are an educated class of people. And if you are going to charge US$14 for computer assembly it is ridiculous — one day we will collapse.” It isn’t only resellers with a consumer string to their bow that will earn support from the DCTG. B-to-B resellers also face myriad challenges, making it an opportune time to unite and establish the steps that must be taken to safeguard the future of Computer Street. Being able to exchange information on customers, address financial issues and belong to a group that promotes the value of its members can only enhance the interests of those concerned. The DCTG is also an opportunity for resellers to put on a united front and proactively strengthen relations with vendors. Members of the group have already discussed the possibility of working alongside vendors such as Microsoft to establish a code of ethic beneficial to both parties — a timely measure given the two UAE resellers recently reprimanded by Microsoft for selling pirated software hail from malls on Khalid Bin Al Waleed Road. Although the DCTG hasn’t disclosed membership rates I understand that a joining fee of around US$275 has been mooted, with a much lower renewal fee then levied each year. I’d say that’s quite a small price to pay for some much-needed security and direction. In a market becoming more — not less — competitive, resellers in Computer Street are united by the obstacles and challenges they face. And that’s why it is vital for good neighbours to become good friends. ||**||

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