Supplying Saudi Arabia

The Kingdom of Saudi Arabia’s status as the largest IT channel market remains uncontested.

Tags: Belkin International IncorporationCommScope IncorporationCommVault Systems IncorporatedInteractive Intelligence Inc ( ArabiaXerox Corporation
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Supplying Saudi Arabia Dan Smith, head of integrated marketing, Xerox MEA
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By  Piers Ford Published  November 14, 2011

“Most vendors supply from outside the region. This brings logistical challenges such as lead times and managing distribution within authorised channels. Having the latest products available on time is crucial but according to Youssef El-Arif, national account manager MEA at Belkin, importing products entails a lot of pre-shipping work and documentation, which can delay the arrival of stock in the country.

“We are proud to have a local presence,” says Qahwash. “Through our Logistics Business Unit we are able to meet the needs of our channel partners and are able to offer third party services to vendors with or without presence in the Kingdom.”

Abdul Nasser Bangcola, country manager for Saudi Arabia at unified IP communications specialist Interactive Intelligence agrees that bureaucracy continues to be a major business challenge. But he would also like to see local channel players stepping up to the plate in more dynamic ways.

“They need to understand that they must also invest in upgrading skills, marketing and resources if they are to grow their business and support their vendor’s objectives,” he says. “They also need to learn to respect their commitments. The channel still relies on the old school way of doing business, with practically no strategy, plans or objectives.”

The skills challenge

But even with the extensive training and development programmes that all vendors place at the core of their channel strategies in KSA, this is an area that channel partners are finding an increasingly vital investment. New technology skills are at a premium in the country, for vendors and resellers alike.

“Staff recruitment, retention and talent development is an important challenge, across the market,” says Colin Summers, regional director at data management specialist Commvault Middle East.

“This results partly from the continued reliance on expatriate labour. There are still too few Saudi nationals working in the IT industry. It’s changing, but not fast enough. So with relatively short tenures of employment, it is difficult and costly to invest in long-term training and development.

“Equally, it is still far from straightforward to change employment – hence many talented individuals are unable to develop their careers and move on within an existing organisation. Their only route for development is a move outside of Saudi Arabia. So there is a talent drain and a constant churn of staff. The average tenure of channel pre-sales and sales in the Kingdom of Saudi Arabia is 18 months, so it’s a massive problem to invest in your team with such high turnovers.”

Addressing the channel’s training and skills development needs is a priority for all vendors. Red Hat, for example, is about to embark on a revised channel enablement programme.

“On the skills development front, this is key,” says George DeBono, general manager for the Middle East and Africa at Red Hat. “If the skills and knowledge are not in the market, then you have a struggle trying to deliver successful projects. As such, we constantly review our market skills development programmes to ensure that we are delivering the best possible outcome for the market.”

DeBono suggests that the enterprise channel could also be tested by a local reliance on community-maintained software, which will throw up all kinds of warranty issues as systems integrators and resellers try to encourage their customers to standardise.

“The continued use of community maintained software at an enterprise level will pose a challenge, especially as Saudi organisations continue their global expansion,” he says. “Most, if not all major vendors (hardware and software) will only certify their offerings on commercial grade, enterprise-ready platforms. ”

But perhaps the most significant hindrance to the channel’s ambitions continues to be payment cycles.

“One of the key challenges is credit and cash flow,” says Commvault’s Summers. “The channel is working on an average of up to 90 days in the private sector, and in the public sector the payment situation is extended – 180-plus days is unfortunately ‘normal’. This puts intense pressure on profitability and the entire supply chain.”

Frustrating as this is, any changes in business culture are likely to come far more slowly than the speed at which technology and implementation are advancing in KSA. Some players are optimistic that the regulatory environment is improving but in the mean time, and regardless of the intricacies of doing business in the country, at least vendors and their channel partners know that the market shows no signs of a reduced appetite for cutting-edge solutions.

“The key technologies that are starting to gain presence in the Kingdom are things like virtualisation and cloud, as they are everywhere else,” says DeBono. “This is a good thing, as we are seeing Saudi firms learn from foreign firms that have gone down these paths.”

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