Secret services

Channel Middle East sat down with a mixture of services oriented-resellers from across the region to assess what opportunities and obstacles they face when operating this challenging business model.

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By  Administrator Published  June 30, 2007

Resellers in the Middle East are fast gaining recognition for the specialised services they are able to offer. By providing more than just a product - and investing in a solutions model that completely redefines their go-to-market approach - resellers are building stronger relationships with their customer base. Channel Middle East sat down with a mixture of services oriented-resellers from across the region to assess what opportunities and obstacles they face when operating this challenging business model.

They include: Antoine Kareh, general manager at CIS Group, Lebanon (AK); Narendra Talreja, general manager IT infrastructure and service at UAE reseller Seven Seas (NT); Mazen Boushi, regional manager MENA at Triview in Syria (MB); Saeed Madhoun, marketing manager at Saudi outfit Jeraisy Computer and Communication Services, (SM), Hani Harik, president at Emirates Computers (HH) and Andy Barr, services manager at Universe Computers in Kuwait (AB).

What percentage of your overall revenue comes from selling services? And how many staff work within your services business?

MB: About 25% - because we do full networking solutions for printers, PC and programming software. We did three or four big projects in Syria and there was a lot of emphasis on networking in these projects. Networks require a lot of service so that makes it 25% of our business. In PCs alone, it's not more than 10%, but overall it's 25%. We have around 25 staff dedicated to services out of 100 people in the company.

AK: Around 20% to 25%. We have 200 across around 15 different countries in Africa, North Africa and the Middle East. Overall we have 520 staff, and out of that 200 are focused specifically on services.

SM: Around 27% of our business is in the field of services and we have around 500 staff dedicated to services. Our business has approximately 1,300 staff in total.

AB: 20% to 25% of our revenue can be considered as coming from selling services. We are a team of six dedicated to providing services. In addition to that we have 60 engineers who - to varying degrees - are also involved in various support with resellers.

Which specific services do you see the most demand for?

HH: Consultancy and implementation - everything from IT project management to knowledge transfer. Maintenance is also a key service because the client begins to rely on technology; it becomes an enabler and it is vital to the running of an operation. A company may have 30 to 40 stores across the region, with thousands of cash transactions everyday, and it needs to understand buying behaviour and exercise control. You can't tell them their connection to their 40 stores is down - they won't be able to manage. You can't implement a project that is 80% good, it has to be perfect at least 99.999% of the time.

NT: During the last three years, services were about product implementations and installations. Now it's more about providing managed services, value added services, facilities management, hosting and disaster recovery. Outsourcing itself is a huge requirement now - three years ago we had to go and sell the concept of outsourcing.

Today, I keep getting calls and requests for it. Dubai's growing for everyone - a lot of new entrants are choosing not to recruit specialised IT staff, instead they are taking their IT ecosystem to people like us and we are providing them with IT services.

SM: I think demand mainly comes from maintenance on networking and infrastructure in general. The maintenance of things like routers and switches is mainly what we do.

AB: We see a lot of demand for network maintenance, IP telephony, outsourcing, consultancy services regarding design, security and reconfiguration. We also provide IT consultancy services. That's quite popular.

AK: Since we're operating in emerging markets, we provide a whole range of services from the most basic ones like warrantees and installations to integration and implementation of hardware and software infrastructure. And after that we do outsourcing.

Which services provide resellers with the highest profit margins in this region?

MB: I think network services give a big profit because just a few engineers can programme networks in Syria. About 20 people in Syria have the knowledge to do this engineering, and we have two of them - that's 10% of the country's engineers who have this knowledge. It takes about five or six years to get this knowledge, and five years ago people weren't aware of what benefits could come from networking so they weren't prepared to invest their time in something that would take five years to benefit from.

AB: Our core business is IP networking and therefore our highest percentage of profit comes from providing support services in IP networking related areas.

What kind of investments do you have to make in your staff to become a services-focused reseller? And how easy is it to find staff with services skills?

AK: It's not easy to find staff but we take them almost out of school and send them into one of our operations for maybe a couple of years. Then we start training them. Usually after four or five years they become operational in high level services. They start with warrantees and then they go up. Every person costs around US$40,000 to US$50,000 per year in training.

SM: It takes a lot of investment - especially in networking. You have to carry out continuous training on new products and technologies, and the configuration and implementation of the new products. So it takes a lot of investment - no less than US$500,000 per year. It's not easy to find staff with the skills. Unfortunately a lot of skilled IT professionals don't like to relocate to Saudi Arabia and the rules and regulations in Saudi Arabia are making it difficult for us to find the right staff.

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