Ten minutes with… Jan Zadak

At HP's Software Universe Conference in Barcelona, Brid-Aine Conway talks to the company's EMEA senior vice president of sales and software about the Middle East market and how HP is growing its software side.

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By  Brid-Aine Conway Published  February 23, 2008

At HP's Software Universe Conference in Barcelona, Brid-Aine Conway talks to the company's EMEA senior vice president of sales and software about the Middle East market and how HP is growing its software side.

What was the driver behind HP's acquisition of Atos Origin ME?

If you look at the Middle East today, it's a consumer-oriented marketplace - the consumer drives a lot of GDP growth - I don't think it will slow down.

If you go back, what we did was, the first company we acquired in the Middle East was in Saudi Arabia where we fully acquired the Compaq computer services and integrated the joint venture into our HP SA operation; we then established our direct presence in Oman, last year we acquired NCS in Kuwait and part of NCS in Kuwait and Bahrain creating the joint venture which is now HP Services Kuwait and Bahrain.

At the same time as acquiring Atos, we were strengthening our position in Dubai as our centre of operations in the Middle East.

But we were also heavily investing in Saudi and overall in the Gulf countries. Meanwhile, we have significantly strengthened our presence in Egypt's Cyber City.

We are very happy about the substantial business growth over the last 12 months and over the last five years, significantly strengthening the number one position that we have in the Middle East IT marketplace.

Our focus on expanding services, which was done through Atos's acquisition, was in the core of what we actually want to do going forward.

We wanted to strengthen our capabilities in services to be able to bring the technology, implement the technology and get the business benefit extracted without changing our Middle East partner strategy.

What kind of spending do firms in the Middle East do on software and services as opposed to pure hardware devices?

If you look at the maturity of the market, the Middle East market is still undergoing a development and it will mature more over the next couple of years.

If you look at the proportion of software and services it's still in the lower range, but I am a very strong believer that the market will accelerate with maturation.

We also do extremely well in hardware - if you look at the market share in servers we have a market share of over 50% across all of the server categories and over 60% - 70% in some of the industry standard servers in some Middle East countries.

So we do exceptionally there, and also when it comes to printers or PCs in the Middle East.

We're now focusing on accelerating software growth. Without giving you Middle East numbers, the whole of Europe is now hiring 500 people into the software organisation.

We want to accelerate our capabilities to grow software substantially. And finally, we have the services growth, which partially is a growth through organic means, but a big part for us in the Middle East is really an M & A play.

We displayed that in Bahrain, in Kuwait, we have now displayed that in Saudi Arabia and for us this is really an area to catch up in terms of the overall market share that we can potentially win.

What is HP doing to promote the software side of its company?

Number one, we are focused on developing the capabilities of our customers, our channel partners and our internal organisations. We are looking at capabilities to be able to bring the value, implement the value and get the stuff done.

Secondly, we are very focused on making sure customers understand the business cases behind implementing certain software technologies, so there is a clear business benefit or outcome on whatever you plan to do in IT, when it pertains to hardware, software or services technologies.

Is there more growth through acquisitions in the Middle East for HP than in Europe or Africa?

The acquisitions strategy for the Middle East(ME) for services is stronger than it is for some of the other parts of Europe. First of all our market share is lower than what it could be or what it proportionally is in some of the other places.

We see that through inorganic means we can achieve our objective faster.

Secondly we see a growth opportunity because we believe the market will mature quite soon.

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