A Changeable Feature

In spite of the uncertainty about the global economy following the European Union’s Eurozone crisis and the impact the shortage of hard disk drives is having on the regional IT market, the channel’s major stakeholders are optimistic about the next 12 months.

Tags: 3DAl Jammaz DistributionAptec DistributionCloud computingComguardToshiba Corporation
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A Changeable Feature Shailendra Rughwani, president, Dubai Computer Group
By  Manda Banda Published  March 1, 2012

In spite of the uncertainty about the global economy following the European Union’s Eurozone crisis and the impact the shortage of hard disk drives is having on the regional IT market, the channel’s major stakeholders are optimistic about the next 12 months. Whether it’s embracing new emerging technologies or pushing cloud computing, managed services or virtualisation to the next level, industry pundits share optimism that the Middle East channel will hold strong.

After yet another unpredictable 12 months for the Middle East IT channel in 2011, there is emerging optimism that 2012 may well be the turning point for the industry that is still on the road to recovery following the global financial meltdown from three years ago.

And while the channel has rallied back to fend off the effects of the worst global recession, problems in the European Union’s Eurozone countries and the effects of three months of flooding in Thailand that forced hard disk drive manufacturers to shut production, have cast doubt on whether the regional IT channel will shake off these fresh challenges that it faces before it.

Not surprisingly, key channel pundits argue success or failure in 2012 will largely depend on the ability of all stakeholders (vendors, distributors, resellers and retailers) to embrace new ways of doing business, drive innovation, solutions selling, offer value-add services to clients and prop up the adoption of emerging technologies in a bid to drive growth, profitability and boost the industry going forward.

Interestingly, while cloud computing and cloud-based managed services was a catchphrase in the channel marketplace last year, 2012 is shaping up as a period that will see a much more forward thinking approach especially from channel players that want to stake a claim in the cloud space and all the services opportunities that this brings.

In the enterprise segment, cloud computing, software as a service (SaaS), infrastructure as a service (IaaS) and platform as a service (PaaS) will all present new opportunities for the industry although the adoption or move to embrace these technologies may be a relatively small percentage.

At SMB level, cloud-based computing has become more relevant than in the large enterprise space and this presents the Middle East regional channel’s great hopes even though a lot will depend on the type of applications or services rendered to SMBs in the region.

“I am optimistic about 2012 despite concerns about the crisis that has engulfed countries in the European Union’s Eurozone. The GDP in the GCC region is forecast to grow in-spite of unpredictable economies in Europe and the USA for 2012.

Government spend and budgets for 2012 in the UAE, Saudi Arabia, Qatar and other key regional countries show healthy increases in many sectors not just IT. This is a healthy outlook which will create major opportunities for the regional IT channel. We are also optimistic for the longer term prospects of countries that are undergoing change following the Arab Spring,” said Dr Ali Baghdadi, president and CEO, Aptec Holdings.

Baghdadi said with all the political instability that characterised most parts of the region in 2011, the industry has not seen significant decline in Egypt or Yemen. On the contrary, Baghdadi said the market has also seen new opportunities emerging from a more stable Iraq and Libya.

Shailendra Rughwani, president of the Dubai Computer Group (DCG), said the changes in the political landscape in the Middle East and North Africa (MENA) region are going to be the key to business in the next 12 months. “We are hoping that some markets in some countries in this region will open up to business. This will boost the business of companies focusing on exports from Dubai. Technology wise, we saw a lot of new products being launched in 2011 and the focus of major IT manufacturers was towards tablet PCs. We are expecting more new technologies to be introduced in 2012 and the focus will be more on mobility, social networking and of course cloud computing,” Rughwani noted.

Asim Saud AlJammaz, vice president at Saudi Arabia-based value-added distributor (VAD) Al-Jammaz Distribution, said that while business was generally good in 2011, the crisis that is brewing in Europe will have an impact on the Saudi economy especially if oil prices go down. AlJammaz said despite all these concerns about an uncertain future, there is belief that there will be more opportunities for shrewd channel partners in 2012.

“We see opportunities opening up in storage, advanced technologies such as IP telephony, broadband connectivity solutions and the technologies around it, next generation data centres, which will be the base for offering cloud computing technologies and other cloud services in the Middle East region,” he said.

Santosh Varghese, general manager, Computer Systems Division, Toshiba Gulf FZE, agreed and said markets in the region will continue to see reasonable growth fuelled by the success of ultrabooks, tablets and 3D technology. Varghese explained that these new technologies will further boost consumer demand towards the PC segment and play a major role in driving growth for the mobile PC market.  “The channel witnessed solid trading in 2011 and with the falling average selling price (ASP) of PCs and slow growth rate, resellers must focus on providing value-added solutions and services to their customers,” he said.

Varghese added that 2012 will continue to see the industry embrace cloud computing technology and other service offerings related to this sector. He said cloud computing has changed the way businesses use IT solutions and has given organisations particularly SMBs access to latest the tools like remote infrastructure and SaaS at a minimal cost. “Resellers will need to prepare as cloud computing garners more impetus and widespread industry adoption in 2012,” he said.

Mohammad Mobasseri, senior vice president at regional security solutions VAD Comguard is upbeat about business prospects in 2012 and believes all security solutions and technologies will be in high demand even this year like in 2011. “It is common knowledge that business in 2010 and 2011 has been financially unhealthy because of the many disturbances in the region. However, we remain positive and hope that the next 12 months open opportunities for the channel to thrive,” he said.

Mobasseri argued that despite all the talk about cloud computing in the Middle East region last year, the penetration and adoption at regional level remains just a trickle. “We need to build the trust for enterprises and SMBs to accept cloud-based solution offerings. In the past couple of years, enterprises have invested substantially on the on-premises solutions, so it is not financially and economically viable for them to make an instant switch over to cloud-based technology offerings,” he said.

Mobasseri believes that SMBs in the region will be the first ones to widely accept or adopt cloud computing and other cloud-based services and solutions.

AlJammaz concurred and said although the managed services business model is still immature in Saudi Arabia and the Middle East as a whole, the company has decided to start with trials. He said this should lead the company to coming up with a comprehensive business model that will benefit the channel ecosystem in the region.

While there is no doubt that the focus on emerging technologies and wide adoption of cloud-based offerings will be key to driving margins and increasing revenues for the partners, industry maturity and financial growth will be a key element for businesses in 2012.

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