The road to recovery

It's easy to forget that not every Mideast market has been afforded the privilege of unremitting expansion.

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By  Andrew Seymour Published  August 26, 2007

Amidst the general rapture that accompanies the growth of the Middle East IT arena, it's easy to forget that not every market has been afforded the privilege of unremitting expansion. The ongoing challenge facing Lebanese IT providers in battling back from adversity highlights the importance of a committed and resilient channel community that sees vendors, distributors and partners working towards the same goals.

Prior to last summer, Lebanon had been the dominant force in the Levant sub-region in terms of IT spend. These days it no longer holds that title having been overtaken by a Jordanian market that is worth almost US$20m a year more, according to data from IDC.

The sense of disappointment from those in the Lebanese IT channel is palpable, not necessarily because Lebanon has lost its status as the Levant's biggest market, but because the general development of the sector has been set back considerably. With people's priorities quite understandably elsewhere, the implications for the IT and broader business environment have been severe.

It comes as little surprise to hear channel players complaining that the consistency which has evaded them during the past year has had a debilitating effect on their business. Volumes have fluctuated from one month to the next, rendering it impossible to comfortably forecast or look beyond the short term. That has forced many resellers on the back foot, doing what they can to survive, and adapting their policies in an effort to eliminate risk. Several admit they have revised their stockholding policies to counteract the instability, opting to carry nothing more than fast-moving mainstream products they know they can move.

It is clear that many IT companies are still under enormous pressure as they continue to navigate through difficult circumstances. Indeed, some vendors have only recently begun to restore regular shipping and logistics processes again having pulled back from the country entirely during the height of last year's conflict. The consequences for the channel still remain evident. "A certain big IT distributor I know currently doesn't have a single item in their stock," claimed a source at one Lebanese reseller just recently. "I won't say their name, but it's a very well-known brand."

Yet for all the distress it has faced, the Lebanese channel can't be accused of lacking vigour when it comes to attempting a recovery. While the degree of caution being taken by customers still weighs heavily on the market's prospects, resellers insist there are signs that the Lebanese channel is slowly beginning to taste more of the consistency and predictability it craves, especially as larger vendors have started to dedicate time and resources to local market development again. Strong SMB demand also continues to provide a welcome boost in the wake of slow enterprise buying activity.

Even the accusation that economic and security concerns are preventing companies from embarking on the IT infrastructure upgrades they desperately require is no longer the burden it once seemed. The reality is that these organisations will need to make that investment sooner rather than later, opening the door to more opportunities for the channel when it happens.

The Lebanese market remains at a fragile stage of its development and that requires vendors in particular to stand up and be counted when it comes to supporting the local resellers they depend upon. There is no quick and easy solution for returning the channel to more plentiful climes, but it does call on the unwavering commitment of vendors and their partners to unanimously pull in the right direction. Teamwork, understanding and trust are the very essence of what life in the channel is all about and those qualities must be demonstrated in abundance if Lebanese IT providers are to truly make a full recovery.

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