High society

Much of the financial strength of Kuwait is in the fact that it is home to 10% of the world's oil reserves.

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By  Julian Pletts Published  February 20, 2008

When it comes to ranking the Middle East IT market, Kuwait appears to comfortably occupy third step on the podium, a long way behind the might of the UAE and burgeoning Saudi market. But as Channel Middle East found out, the Kuwait market remains firmly out in front as far as IT adoption's concerned, creating a wealth of opportunities for the local channel.

The most common observation from the Kuwaiti IT channel is that the market always leans towards the high-end, top-of-the range products, be it the latest consumable gadgets or the most sophisticated enterprise solutions. This is possibly down to the fact that, despite a population of just 2.5 million people, GDP is estimated at more than US$24,000 per capita.

A great deal of the financial strength of Kuwait lies in the fact that it is home to 10% of the world's oil reserves, with oil accounting for nearly half of the country's domestic product. Along with the construction industry, oil and gas companies are heavy investors in IT infrastructure and services, but it is the government - which has spent huge sums on IT and communications - that has facilitated the strength of the local market.

Seras Al Oqlah, managing director of Future Technology Systems, a Kuwaiti-based reseller working with vendors such as Symantec, Juniper Networks and Sun Microsystems, is positive about the prospects of the Kuwait IT market. "It's a booming country compared to others today and what we see now is that most international vendors are focusing on Kuwait in this region.

The market is growing and there is a very high demand for IT solutions." Market research house Business Monitor International extols Kuwait's place as one of the top IT markets in the Middle East. "Kuwait is the third largest computer market in the region, and the total size of the market is expected to increase from US$406m to around US$875m in 2011," stated BMI in an executive summary for one of its forecast reports.

Given the IT market compound annual growth rate forecast at 17% for 2006 to 2011, Kuwait is set to be one of the fastest-growing countries in the region. This is due partly to its relatively small but tech-literate and wealthy population, which allows faster trend adoption," it concluded.

Bruno Haubertin, partner and alliances sales organisation manager at Sun Microsystems Middle East, believes Kuwait also has a more important role to play in the region rather than just third fiddle to the UAE and neighbouring Saudi. "Kuwait seems to be a development house for the region, you don't see that in many other countries in the region," opined Haubertin.

In Kuwait the identity of the companies who have ambitions across the region are increasing, perhaps due to the size of the market and the education." He also explained that some of the company's partners in Kuwait are looking to the development of re-export channels into countries such as Egypt and other African nations, where demand for IT products are increasing, as a way of maximising their revenue and expansion.

Toshiba's country manager John Maliakal echoes the tendency for Kuwaiti consumers to head for the high-end of the market. "This has been the case across all kind of products, it is not just IT; I have spoken to retailers across electronics products such as mobiles and telephones and buyers typically go for the high-end products," he said.

We are also seeing an increase in the market itself, Kuwait is growing and has grown at around 40%." Maliakal also suggests that small Kuwaiti dealers are beginning to really feel under threat as the Carrefours and Lulus move in, mirroring developments in its two larger regional siblings, Saudi Arabia and UAE.

The fact that Kuwaiti consumers and commercial buyers have more money in their pockets to purchase the best kit still benefits the resellers on the ground, including Future Technology's Oqlah.

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