Preparing for growth

The inaugural Channel Middle East Conference 2012 held in Dubai recently examined growth prospects in the regional channel and the future of IT channels in MEA

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Preparing for growth Dr. Baghdadi says the Middle East IT industry is not selling enough services
By  Manda Banda Published  September 9, 2012

The Middle East and North Africa (MENA) channel has faced difficult circumstances over the past three years. Product margins have continued to be squeezed, while lethargic sales and commoditisation of IT products, protracted sales cycles and increased rivalry in the cut-throat IT solutions selling game are some of the difficulties that partners have had to endure.

In addition as end customers’ IT budgets have shrunk, so there has been less room for the channel to make good profits, meaning less resources and necessary investment to spur growth. Today, however, there are signs of an upturn on the horizon and that companies in the region have retrenched and restructures, and are now looking to new growth opportunities.

It is against this backdrop that the Channel Middle East Conference, the first ever was held in the United Arab Emirates with the aim of informing all parts of the channel on key opportunities and strategies for delivering improved business in 2012 and beyond.

Keynote

With the inaugural Channel Middle East (CME) Channel Conference 2012 having been held at the Emirates Towers in Dubai, the ‘movers and shakers’ in the local channel attended the event in numbers.

The summit aimed to bring together IT leaders and executives from the Dubai channel to discuss the current market and business trends in the IT industry and how these new advancements in the IT sector are shaping the future of the channel in Dubai and the Middle East region. In addition, this high-level channel event helped channel partners to further their competitive edge and discuss how they can differentiate themselves in a market where product margins have continued to decline.

The summit, which was held under the theme: ‘Preparing for Growth in the Middle East Channel’, saw Dr Ali Baghdadi, president and CEO, Aptec Holdings Group, deliver the opening keynote address to over 150 delegates.

Baghdadi shared insights about the future of IT channels in the Middle East and Africa. He urged channel partners to embrace IT services if they are to seize the opportunities in the Middle East and Africa (MEA) market. “Distribution will forever be involved in the commodity side of IT for as long as they is a need to deliver a PC, server or printer,” he told delegates. “Where you can have an impact is in the services and value-adding space, as these areas offer the opportunity to earn recurring revenues.”

Aside from the services and value-adding opportunity, Baghdadi, pointed out that Microsoft’s Windows 8 OS will not only help spur sales of notebooks and tablets, but will also encourage firms to upgrade as most are still on XP. “PC refresh cycles will pick once Windows 8 hits the Middle East regional channel. Together with the services that you are bringing to market, there will be a whole host of business opportunities in Q4 and beyond.

Baghdadi said that along with cloud computing, virtualisation, unified communications, and social media platforms, the channel has more avenues to tailor make services and solutions that help small and enterprise organisations to take advantage of these innovations. “The channel is still in a trade mentality and this has to change as the Middle East market matures. My view of the PC business is that it is changing and has become more commoditised,” he said.

Social enterprise is the new approach to how organisations are engaging with their various audiences, Baghdadi said. “Social media marketing has become an essential part of how organisations are going to promote their offerings as well interact with their clients and employees,” he said.

Baghdadi said where the channel needs to be focusing more is not the commodity hardware space but IT services, consulting, deployment, certification and training. “The Middle East IT industry in general is not selling enough services and is still not geared-up to embrace services.

He said with enterprises adopting the bring-you-own-device (BYOD) and bring-your-own-application (BYOA) to work, cloud-based business will become more pronounced and this is an area that resellers need to get involved in.

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