Emerging from the shadows

We look at the developments taking place in the Sultanate to discover if the Omani market can escape the shadows.

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By  Dawinderpal Sahota Published  November 12, 2007

However, the market still has a long way to go yet. The retail segment is one area in particular that lacks the presence of the many big names synonymous with the region. Toshiba is calling on power retailers to enter Oman and drive growth in the retail segment in a similar way to Dubai. "We are waiting for the market to grow and have the key retailers move in," confessed Varghese. "Currently there is an Emax and the only other major retailer there is Carrefour. We will always be striving to educate the market and bring the market out from being one that is focused on entry-level products," he said.

According to the vendor, one way retailers can nurture the market is simply by making a more sophisticated range of products available on their shelves. "Once customers see the products live - demonstrated with all the features and capabilities - buying behaviour will reach the next step," said Maliakal. "Right now it's only Carrefour that is doing this. You can't really appreciate these products when you just see them in a catalogue," he added.

Omani companies cannot offer the high salaries for the highly skilled people serving the very rare domains in IT. They’re hiring them on project-based contracts or through firms in Dubai.

Although Al Madinah's Marashdeh agrees that the presence of more power retailers would be a much-needed boost for the market, he doesn't envisage the likes of Sharaf DG, Jumbo or Jarir Bookstore setting up shop in the Sultanate just yet. He argues that the investment required to open outlets there would not warrant the price tag in the market's current state. "The major place to buy IT products in the store is either Carrefour or Emax. I think that given the initial investment required, the current demand doesn't justify the investment," he said.

Another challenge is the sheer size of the country - combined with the lack of channel players actively distributing product across the country - which leaves vast parts of the market underserved. According to McAfee's Malak, only the central areas of the Sultanate are afforded adequate attention. "It is still an issue that all major business is concentrated in one area of the country," he admitted.

Toshiba also harbours reservations about the extent to which the far corners of the country are being served. "Geographically, Oman is a big place and we're not sure if the population is equally distributed within the geography," revealed Maliakal. "If that is the case, then these guys need to be moving into those places - not necessarily with fully-fledged shops - but they need to find a model whereby they can serve those areas."

A shortage of skilled IT staff in the Sultanate represents another major hurdle as the industry strives to develop itself. According to Mansoor, vendors are failing to give the country's graduates enough support and attention, which is consequently leading to a vacuum of technology professionals.

"The challenges here in Oman are that the highly-skilled technical people are not always available, it's project-based most of the time," he said. "Omani companies cannot offer the high salaries for the highly skilled people serving the very rare domains in IT. They're hiring them on project-based contracts or through companies in Dubai or somewhere else in the world - this is the thing that is hindering the market here. There should be some training directly from the vendors to the society or university students or the newly graduated staff to help them find a job and in the end create more users for their technologies," he suggested.

Oman's status as one of the region's smaller markets has led to many vendors serving the local channel on a remote basis. However, this lack of intimacy has opened doors for resellers. ABS reckons that with the lack of vendor presence in the country, end-users have no choice but to approach resellers for support and consultancy. "We hope we will cover most of the niche markets which are neglected by most of the vendors such as consultancy on security, business continuity and business infrastructure," said Mansoor.

McAfee argues that in-country presence isn't necessary in Oman, and that the close proximity it has to the country from its office in Dubai is sufficient given the current climate. "McAfee does not have an official representative office in Oman, however our presence is felt through our sales and technical team who are always present when needed," assured Malak. "The decision on whether to have a local presence is mostly based upon the amount of revenue derived from a specific region. As of now, McAfee believes that the Oman market is best handled through Dubai office resources."

However, Sun Microsystems admits that - although it doesn't have an Omani representative office of its own either - the market is being neglected by vendors and is in need of closer attention if it is to realise its potential. "I think a lot of people focus more on the larger markets and don't see the potential and are not giving enough attention to the Oman market," said Heger. "The Yemen market is very similar, it hasn't had the necessary attention," he added.

Marashdeh also reckons vendors aren't doing an adequate job of serving the Omani market. "I think vendors need to work on how to tackle the market because they're not really focused on the market and at the moment they don't know how to address it," he said.

Bahwan IT's Kumar concurs that vendors need to pull their weight if the market is to overcome the challenges at hand. "Logistics support from vendors has to improve to ensure the market is sufficiently served," he said. "Manpower retention is another challenge. The global vendors must continue aligning with local vendors to make the market mature and to be seen as a great contributor of IT in the region," he added.

In this instance, vendors are actually holding their hands up and admitting they haven't given Oman the attention it deserves in the past, but are taking steps to rectify that. Sun is appointing a new territory manager to address Oman. The vendor claims it has made a conscious decision to separate Oman from Dubai in its strategy to give the market a specific focus, and is also in discussions to extend its presence in Oman over the next three months. "Sun didn't address this market sufficiently, but this is something that we recognise and the fact that we've got plans in place is a signal of our intentions," said Heger. "I'm expecting big things from Oman and I'd like to commend the work the Oman government has been doing to further the IT industry," he added.

Toshiba too admits it is looking to strengthen its ties with resellers in the region. "We're not really focusing on the distributor, but are going to be talking to the channel to think about the market and shop displays," said Varghese. "We're going to expand the scope to reach the corporate through VARs in Oman as well," added Maliakal.

And McAfee is also pledging to deliver a better proposition to partners in the Omani channel with more dedicated resources. "We plan to increase the number of staff handling and helping in the Oman market," said Malak. "Most importantly, it is key to further developing the channel in order to have the correct coverage in terms of verticals and product messaging," he concluded.

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