Qatar on target

If the Qatari channel sustains its current level of development then it is poised to pass a notable milestone by the close of 2007. Anything constituting low double-digit growth or higher will propel the value of the Qatar market to in excess of US$350m a year. It's little wonder, then, that vendors are taking careful aim at this riveting landscape.

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By  Andrew Seymour Published  August 15, 2007

Qatar might only rank as the Gulf's fourth largest market, but it is showing more than enough potential to keep the technology hordes interested. As vendors rapidly step up their investments in line with the soaring growth being recorded in certain vertical sectors, the net worth of the Qatari market continues to swell.

Qatar already boasts a larger IT industry than Middle East neighbours Bahrain, Oman and Jordan, and has its sights set on emulating the Kuwaiti market, which is now worth more than US$600m a year. Having grown accustomed to GDP growth rates north of 8% a year, and with revenues from the non-oil sector making an even greater contribution to the economy, Qatar has quickly become one of the Gulf's most alluring markets.

Like many growing markets, investment tends to be made on front line offerings. For example, financial services will invest in front office systems and customer marketing to gain market share.

Last summer's Asian Games - hosted in the capital city Doha - catapulted Qatar into the limelight and more importantly led to an unprecedented level of investment in technology infrastructure. A wealth of IT projects were gobbled up by local and international companies eager to make the most of such a glorious opportunity.

"The highlight of the year was the Doha Asian Games and as we got closer that's when we saw a large number of systems on the client side - meaning desktops and notebooks - being deployed across events relating to the games," reflected Omar Shihab, research manager PC programme for the Middle East and Africa at analyst firm IDC. "This, plus a number of projects that we saw within the main sectors such as oil and gas, definitely drove part of the desktop market," he said.

Even markets renowned for consuming much larger volumes, such as the UAE and Saudi Arabia, couldn't match the level of PC growth registered in Qatar last year. Desktop PC shipments bounded an impressive 25% year-on-year to almost 56,000 units while notebook growth of 81% outstripped every other territory in the GCC, according to data from IDC. This rapacious demand for laptops has dramatically changed the composition of the Qatari PC space. A staggering 58% of the market now consists of mobile PCs compared with just 33% the previous year.

The Qatari market has undoubtedly reached a vital stage of its evolution as SMB companies join larger enterprises in demonstrating a healthy appetite for technology. Products in the VoIP and security categories, for example, remain popular as organisations seek technology that will both enhance and safeguard their business.

The challenge facing many vendors operating in this market is how to educate customers on making the right long-term decisions when it comes to investing in technology. "Like many growing markets, investment tends to be made on front line offerings," said Derek Morrison, regional manager at performance management software vendor Cognos Middle East. "For example, financial services will invest in front office systems and customer marketing to gain market share. Our role as a domain expert is to illustrate and demonstrate that proper investment in performance management will ensure that growth objectives, and most importantly balance sheet and profitability objectives, can be more strategically managed to provide a clear platform for growth."

Software counterpart Microsoft also expects the market to develop considerably in the coming years and claims it is promoting ways for the local channel to be more self-sufficient. "In the UAE channel, partners also have certain intellectual property whereas here in Qatar most of the channel are solution brokers with limited IP,' said Mohammad Hamoudi, Qatar country manager at software giant Microsoft. "There is a strong trading mentality, but that is evolving. One of the key joint activities we are looking to start is about creating a local software economy. This economy will create companies that develop intellectual property that they can implement here in the country, but also take elsewhere."

At close to US$350m a year, the Qatari market isn't yet large enough for some vendors to commit anything more than a token presence. 3Com, for instance, has a country manager in place to look after channel activities on the ground, but doesn't yet feel the need to open a fully-staffed office.

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