Alpha Data sticks to its principles

Accomplished UAE corporate reseller and systems integration specialist Alpha Data now employs 650 people and expects sales that already top US$160m to increase by 30% this year. Yet despite its ongoing escalation, managing director Fayez Ibbini explains why the company refuses to overstretch itself in the quest for growth.

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By  Andrew Seymour Published  December 4, 2007

Accomplished UAE corporate reseller and systems integration specialist Alpha Data now employs 650 people and expects sales that already top US$160m to increase by 30% this year. Yet despite its ongoing escalation, managing director Fayez Ibbini explains why the company refuses to overstretch itself in the quest for growth.


Many vendors have raised concerns that it is becoming more difficult to recruit qualified staff. Are you facing the same problem in the systems integration arena?

Definitely. It is a UAE-wide issue, but quite honestly we have a quality policy based on winning customer trust by delivering on the agreed expectations, first time, every time. To do that, we can only afford to grow in a certain way by a certain amount - we cannot go for exponential growth, nor is that our mission in life. So we tend to take on what we are comfortable we can handle and have the bandwidth for, and obviously what we think we could recruit for in the given time we promised the customer. The pressure is on for all of us and unfortunately it becomes more challenging because some of the companies in the market find it a lot easier to poach than recruiting worldwide and adding to the pool of skills in this country. That tends to disrupt everybody and just escalates the cost of skills rather than making it easier for anybody to fulfil the projects in the pipeline.

Do you foresee that situation becoming more intense?

I can't help but think a lot of people who didn't plan well will have to resort to that otherwise they start facing penalties. They start paying whatever they have to pay to get the people to do the job. Unfortunately it is bad news, even for the employees because there is no long-term stability for them.

Do you think scale is still important in the systems integration business?

Yes, to some degree. When you take on a customer that is a hotel with 2,000 rooms you can't be a small player and cope with that sort of project. Scale is important - but only up to a point. That's why if you ask me what our growth strategy is I will still go back to my quality policy. I am really not interested in doubling our size next year. In fact, we try to restrict that to something like 30%. We have had opportunities to grow in Qatar, Saudi, Libya and so on, but with the tight skills market, and the number of projects in the pipeline here, that is way down on my priorities quite honestly.

Does Alpha Data generate any business from outside the UAE?

We do execute some projects outside, but strictly where we think we can fulfil, deliver and there is a partner out there who will continue the mission. Until we have offices in those countries we will not take something that needs full-time or long-term support.

Does Alpha Data harbour any plans to eventually establish offices outside the UAE?

Yes, if we could have the capacity today then there are opportunities to do exactly that in Qatar, Saudi and a number of places. Our principals are really encouraging us and saying they would love to have us there. But what's happening in the UAE is just so demanding that for now that remains our priority.

So there is currently enough business in the UAE for you to not have to worry about expanding into new markets at the moment?

It's a question of getting enough resources. I've seen many firms just open right, left and centre, and then fold. The more you go remotely the more you need to have quality people. And I can't afford any of my key people leaving base to relocate somewhere else at a time when everything is obviously under pressure.

In other markets, global IT services firms have aggressively acquired large local integrators. Do you see that trend happening here?

The current laws don't make it easy for a foreign buyer to come and take a controlling interest in a local company. We are still governed by a 51%-49% relationship and many of those international players think of an acquisition as going into a market and buying a subsidiary. That is still not possible here so it will just end up being a joint venture.

Would Alpha Data ever entertain the idea of an IPO?

Only if we could see true value. We are fairly solid financially and expansion, at least in the IT industry, does not require a lot of funding. IT is all about knowledge, not the huge need for capital. Just to float for the sake of floating does not yet fulfil any need for us. The only justification would be if it became attractive to become a public company because it would open markets for us. So for us it is not really on the cards right now.

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