Looking back, but moving forward

Gitex Technology Week is drawing close so it is a good time to reflect

Tags: EMC CorporationNetwork Middle East Innovation AwardsNetwork sharingNortel Networks CorporationOracle CorporationRoads and Transport AuthoritySun Microsystems IncorporationUnited Arab Emirates
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By  Julian Pletts Published  October 7, 2009

Gitex Technology Week is drawing close so it is a good time to reflect over what has been one of the most challenging years in the history of the Middle East networking market. You would have had to have been in suspended animation not to have heard or, for that matter been profoundly affected by, the goings-on in the market, and indeed around the globe since the industry converged on Gitex last year.

It was around this time a year ago that the financial crisis was rearing its ugly head over the Middle East market after having significant impacts on the US, European and other global markets. There were hopes that the Middle East - enjoying sustained growth as it had been - would be immune, or at least buffered, from the worst of the financial crisis. Well to a certain extent buffered might have been the case, but the region has certainly not been immune.

There have been cases of projects that fell by the wayside, as bills could not be paid and companies went out of business. Unfortunately, there were inevitable job losses throughout the Middle East networking sector with vendors dropping staff in some of their satellite offices, channel players having to cut sales managers not able to meet increasingly tougher targets and end-users looking to hosted or managed services to maintain the integrity and efficiency of their network as budgets were cut.

The last 12 months have seen some seismic shifts at the manufacturing level of the global networking scene.  A beleaguered Nortel faced ruin and was forced to sell off assets to Avaya and Ericsson. EMC added to its data backup and archiving credentials with the purchase of deduplication specialist Data Domain, and HP and IBM both underlined their aggressive M&A strategy to cement their respective market positions with the former boosting its storage lineup by buying file serving software firm Ibrix and adding to its IT service capabilities with the purchase of EDS late last year.

But the biggest news of the year was the buyout of networking hardware vendor Sun Microsystems by fellow Silicon Valley occupant Oracle.  It was an interesting deal to say the least, and one that was widely questioned by the industry as to whether it truly made sense for Sun and its customers and if a deal between IBM and Sun would have made a much better matchup. The long term success of the purchase, and of Larry Ellison's tactics, remain to be seen as it is still too soon since the paperwork has gone through.

In the Middle East, not too much has emerged on a local scale as the Sun and Oracle merger has bedded-down, but it is likely to play a big part in the development of the market over the next 12 months and also a big role in the Oracle presence at Gitex 2009.

Despite all the turmoil and upset both locally and globally, if the recent Network Middle East Awards were anything to go by, CIOs have kept their heads and although they have been much more careful about releasing the purse strings, there have been solid investments and innovations that have taken place over the last year.

For instance, and without wanting to go into too much detail, a tightly fought contest came in the implementation with the best ROI, an award that almost formed a microcosm of the industry trend for cost savings and careful spending. The eventual winner, Zain Iraq, says that an investment in WAN optimisation solutions has saved it an estimated US$144,000 per month. This is just one of the success stories to have emerged this year despite the fear and uncertainty that the financial crisis has created in its wake.

It has seemed that investment, though slow in some verticals, has been picked up by other sectors. To point out a few examples, the government sector has seen an upsurge in infrastructure investment - Dubai's RTA as a great case in point - whereas the financial industry has slowed its adoption. Education has also picked up the mantel of IT spend where others have dropped it with some notable investments, one being the American University in Dubai's spend on increased security services that made the cover of NME September issue.

The climate has certainly led to overly cautious investment which can only pay off in the long run as current investments become a strong foundation for future IT development. It has also meant that only the strong and most process and money efficient solutions have endured. Having said that a great deal of the projects that have been undertaken this year have been towards internal IT processes such as WAN optimisation and the consolidation of existing infrastructure through virtualisation and management rather than spending money on servers. This has been coupled with the inevitable investment into hosted and outsourced IT, which many predicted would be the side effect of finite resources and economic difficulties.

There are conflicting impressions and messages about how the market will fare over the next 12 months and if job cuts and mammoth revenue losses will return to the headlines. But it is likely that although the Middle East is not out of the woods, the foliage in the networking arena is not nearly as suffocating as it has been.

It is likely that when next year's IT budgets are apportioned, although they will be nowhere near as liberal as they were running up to previous Gitex events, they are going be progressive and focused on more ambitious projects than just streamlining current infrastructure. Whilst consolidation might continue to be a buzzword about these parts for some time, fingers are quietly being crossed that development can become the undercurrent. 

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