Kuwait’s technology tapestry

When most people discuss the spool of threads that make up the fabric of Kuwait, the nation’s significant oil reserves and not the qualities of the IT industry are usually the first to enter the conversation. Nathan Statz digs deeper into the Emirate’s technology layer

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Kuwait’s technology tapestry MERANDA: We wanted to open a satellite office where our customers are, not open an office and hope they come.
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By  Nathan Statz Published  July 11, 2009 Arabian Computer News Logo

The year was 1991. Allied military hardware was rolling through burning oilfields and the biggest names in news broadcasting were chirping reports of the first Gulf War from the shadows of the Kuwait Towers. Much has changed in the time since the Iraq invasion, and the country’s resource-based economy is thriving as is the IT industry that provides the lifeblood for enterprises to flourish within it.

In the implementation [consultants] failed us a couple of times, the big organisations, because of their lack of presence here in Kuwait or even in the region. Kuwait or Dubai that’s fine, but the best practice is not a symbolic presence, it should be a real presence.

Given the turbulent patch the country was subjected to a couple of decades ago, it’s surprising to think that the technology tapestry which has woven Kuwait together is not all that dissimilar to the other countries which hug the Arabian Gulf. One of the most qualified to make the comparison is Akram Mokdad, chief enterprise architect at the National Bank of Kuwait, who has worked all throughout the region as well as in Canada and the US in the financial and telecommunications industry as a consultant.

Mokdad explains that when it comes to the IT market, Kuwait’s is quite similar to other countries in the GCC, particularly Qatar and Bahrain which share many of the same characteristics. The interesting thing is that the maturity of Kuwait’s IT market is on par with many of its neighbours, though Mokdad claims that the Middle Eastern IT industry is at a different stage to the Americas: “Compared to Canada and the USA it is not a mature industry here. But it is getting more and more mature.”

Once you scratch the surface of any IT market in the Middle East, an interconnected system that is teeming with life greets you and Kuwait is no different. The vast range of technology available in the emirate is on par with other GCC nations and so is the presence of large multinational IT players, often through a sophisticated partner network.

This is not to say the country’s technology market is not without room for improvement. The progress in the realm of IT marches on faster than a sandcastle gets swallowed up by the ocean. Keeping up with that steadfast wave of innovation is a tough ask and one where adversary has to be overcome. Mokdad identifies expert advice as one of the big challenges in the country, particularly the availability of specialists, which often forces organisations to look abroad.

“From the development side you can find good developers, but you don’t have the sort of people who know the product. Sometimes you count on people outside Kuwait and that could be anything in Dubai as it’s very close. But what’s really missing here is the people who understand the business and IT,” he says.

The National Bank of Kuwait deals with a large number of vendors in the IT space, and Mokdad explains that it is not necessary for them to have a presence in Kuwait, though the availability of consultants and support at short notice is very important to his organisation.

“In the implementation [consultants] failed us a couple of times, the big organisations, because of their lack of presence here in Kuwait or even in the region,” he continues. “Kuwait or Dubai that’s fine, but the best practice is not a symbolic presence, it should be a real presence.”

“Some people just drop something in Internet City in Dubai [like] a small office. I went and visited a couple of these really small offices; I don’t really believe it’s operational. It’s symbolic rather than a real physical presence and what’s needed is a real presence,” says Mokdad.

According to Mokdad, what the Kuwaiti IT industry needs is to mature and create a better level of competition: “Maybe a new company that can really compete and bring in higher-level resources than other companies in these stages, so creating the market for it. We have small outsourcing companies, they don’t follow processes or standards so if there was a new company with a really high level of commitment from services, from the service level, and they have the followers, so we [just] don’t have the maturity here in the market yet.”

Some people just drop something in Internet City in Dubai a small office. I went and visited a couple of these really small offices; I don’t really believe it’s operational. It’s symbolic rather than a real physical presence and what’s needed is a real presence.

Axis Communications is a prime example of a company operating through a partner network in Kuwait, with the IP-surveillance provider being in the region for six years.

“The infrastructure in the region is quite new and that’s why their acceptance of IP surveillance was even at a higher percentage rate than if you look at other regions worldwide,” says Baraa Al Akkad, regional manager for the Middle East at Axis Communications.

Al Akkad explains that Axis is seeing a similar level of demand in Kuwait as other countries in the GCC, which he believes is quite a good indication about the economic situation in the country: “We have been working for the last couple of years, We have been preparing the market, not just us of course but all the partners involved in the IT surveillance solutions have been working hard to be able to prepare this market for this time, to be able to have it ready to also accept IP surveillance in an easy way.”

The country that’s nestled between Saudi Arabia and Iraq is familiar to Mike Meranda, CEO of the RFID systems integrator, Tagstone, as he has just established the company’s first satellite office in the region – which is in Kuwait.

“Part of our strategy is that we are not going to go open satellite offices everywhere that we would like to have customers and then hope the customers come,” explains Meranda.

“Once we identify customers – and we’ve got customers in Egypt, Jordan, Bahrain, Qatar, Saudi Arabia, all over the place – but we’ve got a couple of very good customers in Kuwait and the first piece of the decision was that we wanted to be where our customers are,” he says.

According to Meranda, establishing a base of operations in Kuwait has been important because as much as everyone would like to believe technology is perfect, there are times that it does not work and by having somebody in the country, you can have a technician on-site in the customer’s office in 20 minutes.

One of the interesting facets of the IT space in Kuwait is the level of government support for initiatives. Meranda explains that Tagstone has had very productive conversations with a number of government, military and defence offices as well as with the oil and gas industry.

“Everyone is interested in what a new technology can provide, and I think like every other technology company, probably the first six months of this year people have continued to ask questions. I think people are still a little bit pensive about what’s going on in the economy but we have a number of products that are chewed up and are simply waiting to have funds released. It’s really a reflection of uncertainty in the economy rather than anything else,” he adds.

“It is certainly very reasonable, I think Kuwait with its financial system has been hit particularly hard by what is going on. I think it would be reasonable to expect that they were more cautious right now than some of the other markets, but we find it to be a very good market,” he adds.

Guru Prasad, general manager of networking distribution company, FVC, believes that one of the differentiators with Kuwait is actually in the composition of organisations: “Kuwait has a lot of small-to-medium enterprises (SMEs) and more SME business opportunities as compared to anywhere else in the Gulf States. At one time there were as many as 20,000 SMEs in the Kuwait market alone.”

“Whatever strategy your products will have, one can’t ignore this big opportunity in Kuwait. Our strategy is clearly also working with partners who address the SME business in Kuwait, other than the usual suspects in terms of the government, the oil industry and the financial industry in Kuwait,” says Prasad.

The country may be more famous for the Kuwait Towers than it is for its IT industry, but the circuits and servers that power the nation’s data networks make a genuine contribution to its success. Much like the threads of technology that are tangled up in almost every organisation in the Gulf, those in Kuwait represent a significant opportunity for success. While notoriety broke upon the Emirate’s shores through war and one of the largest reserves of oil, the IT market is not one that should be overlooked.

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