Sunny outlook

As Oracle and Sun devise their go-to-market strategies as a joint company, the channel remains awash with speculation about how much is set to change locally. One outfit with more reason to be interested than most is Tech Access, Sun's pre-eminent distributor in the region.

Tags: Hitachi Data Systems CorporationOracle Middle EastSun Microsystems IncorporationSymantec CorporationTech AccessUnited Arab Emirates
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Sunny outlook Tech Access chairman Sardar Ghalib is heralding a new dawn in value added distribution for the company. (ITP Images)
By  Andrew Seymour Published  May 30, 2010

When Oracle supremo Larry Ellison revealed earlier this year that a big chunk of Sun Microsystems' largest accounts would be managed directly post-acquisition, the trepidation among channel partners could be felt all the way from here to the software giant's Redwood City headquarters.

But if the man who founded and continues to head one of the most prominent Sun allies in the Middle East is troubled by such a prospect then he certainly doesn't show it.

"I have heard Larry Ellison and his staff speak about it," remarks Sardar Ghalib, chairman of value added distributor Tech Access. "Basically what they have said is that they would want to deal with the top 4,000 accounts directly - that was the case anyway - and the rest will be left to the partners."

As the only enterprise-level Sun Channel Development Partner operating in the region today, any attempt by Oracle to move more of Sun's business direct potentially threatens to harm its own interests by leaving less on the table for the dozens of resellers that purchase Sun products and related services from it each month.

Ghalib understands the fears that exist in the channel about possible direct-indirect conflict, but he is adamant it will all work out just fine.

"I think as yet at this level nobody really knows what is going to happen, but I am sure sanity will prevail. Sun-Oracle won't want to disrupt or destroy business; they will want to do better business. After all, that is the idea," he reasons.

That said, between now and June 1st - when the new Sun contracts come into force - Tech Access, like other partners in the Sun-Oracle ecosystem, will be feverishly evaluating how its role will pan out once the two entities go to market as a combined operation.

Ghalib is resolute that the merger of two of the IT industry's genuine heavyweights will work in its favour, mainly because the truss endorses the solutions-led philosophy that Tech Access first claims to have subscribed to more than five years ago.

Indeed, while its regional association with Sun is arguably what it remains best known for, the distributor also has long-standing ties with Hitachi Data Systems, NetApp and Symantec.

Ghalib also says it is approached by "three or four reasonably large vendors" every month, but has so far refrained from exploring any further alliances until the Sun-Oracle situation is clearer.

One thing it will not do, however, is reduce its focus on Sun. Although the company has previously expressed plans to make the non-Sun brands a larger part of its sales, Ghalib stresses that growing the Sun portion of the business is central to its ambition of becoming a US$350m-plus distributor within the next three years.

"Don't forget, the majority of our business should remain Sun-Oracle because contractually we are bound to that, so my way of thinking - and maybe I am a bit too loyal - is that if we grow our Sun-Oracle business to, say US$200m, only then will we be able to achieve US$350m in total. That is the way I look at it. If we put the right amount of time, money and effort into it we can achieve that."

For now though, talk of lofty revenue growth remains just that. Market conditions have been extremely difficult for enterprise-focused suppliers during the past year, with many potential orders delayed or even cancelled - a situation Ghalib believes was made worse by corporations over-reacting to the economic crisis.

Yet while the company's revenues remained flat in 2009, the last 12 months or so have turned out to be some of the most defining in its history. The main reason for that, explains Ghalib, is that vendors' expectations of it have grown enormously, particularly when it comes to the subject of providing services on their behalf.

"Even if we wanted to tighten our belts, we couldn't," says Ghalib. "We actually had to hire more people because we are talking about value add and the value add that we give to Sun. So when vendors were throwing more at us to keep up to that level of value add, we had to hire more people. And then they wanted us to do more over and beyond what we were doing."

Evidence of that comes in the shape of both a dedicated services division - launched last year - and expanded pre-sales support. Additional investments in 24-hour call centre support and product architects to reinforce its technical capabilities have also helped swell the company's headcount to almost 160 people across the UAE, Saudi Arabia, North Africa and Pakistan.

Ghalib admits that if the company hadn't incurred initial losses from the investments it made to expand its services portfolio, it would have posted a healthy profit last year. But as an advocate of looking at the bigger picture, he insists there was simply no other option than to support its vendors and the channel irrespective of the cost.

"It had to be done and we said [to the vendors], ‘okay guys, we will go ahead and do this.' Hopefully they will remember what we are doing and in the long run I think intentions count more than the result. I know right now we'll hurt for a while, but long term I think it will pay."

There are plenty of Sun - and Oracle - resellers out there that will be hoping that proves to be the case too.

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