Year in review

Channel Middle East takes a look at the major events that dictated, shaped and characterised the region’s IT channel in 2011.

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Year in review
By  Manda Banda Published  February 22, 2012

Channel Middle East takes a look at the major events that dictated, shaped and characterised the region’s IT channel in 2011.

The year 2011 has come and gone. Although the year started with pundits expressing a lot of optimism about increased IT spending this year, it’s events that unfolded midway through the first half and were exacerbated by reseller ‘runaways’ at the start of the second half of 2011, that have dampened the gains that the industry made in 2010. The past 12 months have been action packed as ever in the Middle East channel, with headlines being dominated by just about everything from, the Arab Spring to reseller runaways in the Dubai channel and hard disk shortages as a direct result of flooding in Thailand which has forced Seagate, Toshiba and Western Digital to close their hard drive manufacturing plants and in the process cutting off 40% of the global hard drive supply to the market.

And while reseller exits are not a new phenomenon in the Dubai channel, it is the continued dependence of operating IT solution provider businesses as trading entities that has been a cause for concern among players involved in the regional channel ecosystem. Most resellers have been reluctant to heed advice on the need to embrace solutions selling. Many have opted to go after the export market and only earn margins based on hardware or software solutions they sell.

While the channel has seen a number of vendors come into the region this year, for most companies, 2011 has been a year of continued consolidation and stabilsation of their businesses as the market continues to slowly come out of the economic slumber.
There is no doubt that the Middle East channel today is more agile, fragmented and capable of transforming quickly to the market conditions and needs than the vendor community whose products and solutions it takes to the market.

But like every other business, remaining profitable and healthy requires stability, focus, adjustment and continuous redefinition of strategy. As part of the ongoing channel agenda, channel stakeholders(vendors, distributors and resellers) are constantly monitoring, measuring and predicting the trends which they themselves will be impacted by. Traditionally, channel partners in the Middle East have delivered products that have been sold in a resell type transaction. But that model is changing as organisations continue to look for ways to drive down their capital expenditure on IT infrastructure and look to use technology in different ways.

Channel partners that have continued to invest and develop their businesses into true ‘value-adding’ businesses despite the challenges that they have been grappling with, can look forward to 2012 with optimism and take the stance that things will get better in the year ahead.

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