Bahrain enhances IT prospects

Bahrain is often assumed to be a land of limited opportunity for the IT masses, but rapid growth in a number of key sectors is beginning to explode this perception in dramatic fashion. It is also leading to a level of self-sufficiency among locally based entities that can only bode well for the enduring health of the domestic market.

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By  Andrew Seymour Published  August 18, 2008

Some vendors do value distribution relationships with domestic players, however. Printing vendor Epson uses Computerland, Fujitsu Siemens works through Bin Hendi Informatics and Microsoft employs Kanoo IT to distribute its OEM licences.

While the ascent of the retail channel continues to capture the imagination of the market, the Bahraini commercial sector also appears to be in rude health. Investments from verticals such as government and oil and gas are buoying the enterprise segment, although the heart of the market lies firmly in the SMB arena.

Bahrain has a population of around 800,000 people and so it is predominantly an SMB market," pointed out Avaya's Khan. "It is not a market dominated by large enterprises, but rather small businesses which we consider as up to 100 people and to an extent midmarket companies with up to 500 people."

The major issue with the Bahrain market is expenditure — everyone is now very cautious about their capital expenditure and operating expenses. They are carefully studying different options.

Badea Esbai, country manager at Microsoft Bahrain, believes the economic and political reforms that have taken place during recent years have put the market in good stead. "The e-government strategy for the Kingdom is focused on ensuring effective delivery of government services to citizens, residents and businesses in the region," he commented. "Bahrain also has a very progressive banking sector and a rapidly growing telecommunications industry."

Local players may complain that vendors don't afford Bahrain as much of their attention as they insist it deserves, but that doesn't necessarily mean it is hindering the expansion of the market.

There is strong demand from the financial sector, whether it's in the form of new banks or investment companies, and then we are also seeing a lot of real estate projects where ICT forms the backbone," enthused Abdalla Ishaq, general manager at systems integrator GBM Bahrain.

"The e-government initiative is also taking direction. The government has formed an ICT committee and this already has a strategy for 2010 so there is a lot of commitment in that respect."

Infrastructure is the area that most organisations are investing in, according to Neil Desai, operations manager at Zayani Computer Systems, one of the market's largest integrators with 60 staff and two offices. The company recently achieved Microsoft Gold certification, while it claims that a series of customer wins in the networking space offers proof that the Bahrain market is as technically advanced as anywhere else.

"We have also got into unified communications, which is an area everybody is talking about," explained Desai. "Since last year we have already done four projects, which is a big number for this market, and we are also doing some software projects based on network management that HP OpenView offers."

Unified communications is a subject close to the heart of Nortel as well. The networking vendor has a dedicated team of sales, engineering and marketing support staff managing the business in Bahrain, and claims the UC phenomenon is taking off. "Unified communications is becoming a requirement for many customers, especially those that need to be extremely responsive to their customer needs," said Mamdoh Ismail, country manager for Bahrain at Nortel.

Although the size of the channel community in Bahrain is fairly modest, there are some formidable names synonymous with the reseller market, such as the Almoayed Group, which works with the likes of HP, Sun Microsystems and IBM, and boasts a number of specialist subsidiaries providing services in different parts of the ICT market.

Storage integrator STME has a Bahraini subsidiary too, while Computer World, which is held in high regard as a large Microsoft reseller, and GBM Bahrain are also influential names operating in the market.

"We are primarily focused around IBM knowledge and the networking business through our relationship with Cisco, but we have also expanded into services," explained GBM boss Ishaq. "The set-up is that by the end of the year we hope to have around 45 people, whereas we were 32 last year so you can see the kind of growth we are facing," he said.

Commentators estimate that more than 200 IT resellers operate in Bahrain. As well as the large enterprise integrators there are a number of strong IT trading and reseller companies such as Advanced PC, Microplus Computers and data networking specialist Microtech Computers - all of them based in the capital Manama, which remains the hub for the entire market.

Bahrain's traditional IT trading community has its own characteristics, according to Khan at Mars IT Distribution. "Bahrain's version of Computer Street is very different to Dubai's where you see a lot of branded PCs and accessories being sold," he said. "You won't be able to sell high-end PC brands here - there is far more emphasis on Chinese products and Chinese-assembled systems."

Local market knowledge looks poised to remain an asset that Bahraini resellers will need to exploit as they attempt to enhance their relationships with customers in the face of heightened competition.

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