A promising year

The third Channel Middle East conference held at the Oberoi Centre in Dubai’s Business Bay examined how to ignite growth in the Middle East IT industry as regional channel players look to 2014 as the year that will see business improve drastically.

Tags: EMT Distribution (www.emt.ae)Emirates Integrated Telecommunications Company IDC Middle East and AfricaSAPSystems integrator
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A promising year More than 100 channel executives from the UAE attended the third Channel Middle East conference.
By  Manda Banda Published  January 27, 2014

While the PC is still alive and well in the enterprise space, consumerisation of IT has given birth to the by-now-familiar BYOD (bring your own device) movement, leading to additional competition for the traditional desktop in a battleground where it once had no rival. When it comes to the enterprise market, Microsoft’s Banerjee believes the channel can profit from adding value in a key area that is of interest to business customers: security.

“BYOD is here to stay,” he cautioned. “Factors like security and productivity are going to be very important. Our channel partners need to develop skill sets that allow them to provide these value-added services.”

Volume distribution

The role of value-added distribution (VAD) was also a topic of debate at the conference. An expert panel argued that while volume broadline distributors will not exit from the IT distribution landscape in the region, they must adapt to the changing business environment if they are to develop sustainable business models and stay relevant to the vendors and reseller partners they serve.

Samer Karawi, managing partner, Gala & Karawi Consulting and moderator of the panel discussion, suggested that unless volume distributors can embrace change and innovate in a market where margins and profits on traditional PC hardware have continued to be eroded, they will find surviving in the broadline distribution sector extremely hard.

Mohammad Mobasseri, CEO at EMT Distribution, agreed and said it’s no secret that volume distributors are going through a tough time as profits and margins on traditional IT kit have continued to be squeezed. Mobasseri said it’s for this reason that broadline distributors need to adapt and come up with new innovative ways of doing business or they risk exiting the market. “With the role of a distributor constantly evolving, it is imperative that all those involved in the supply chain do more to help bridge the vendors with the solution providers,” he said.

Mobasseri explained that being a VAD is not easy as it encompasses offering a range of services and solutions in addition to the vendor products that a distributor takes to market. “Is the VAD sector under threat from broadline distributors,” he asked? “Absolutely not, because VAD is about identifying an opportunity where a distributor can make a difference to the partner at every stage of the sales cycle. In turn, this aids channel partners to deliver and implement solutions at end-user level with confidence.”

Mobasseri pointed out that being a VAD requires a distributor to have the right products and technology, services and solutions offerings complemented with proof of concept (PoC) and training programmes for reseller partners. “Our experience as a VAD is that the business model delves deeper into understanding the projects that reseller partners are involved in and helping them with all the necessary skills to integrate and deliver holistic solutions and support to their end-user clients,” he remarked.

Nehul Goradia, vice president, Channel and Alliances, Optimus Technology and Telecom, told delegates that VADs should enable channel partners for the future by helping them to identify emerging opportunities and preparing them on how to harvest those prospects. “For as long as there is a need for a hardware box (server, router or desktop PC) volume distributors will still have a role to play. “What distinguishes VADs from broadline distributors is the level of expertise and skills the former need to have in order for them to deliver end-to-end enterprise solutions,” he said.

Goradia said volume distributors are more concerned with the top line with low profits. “Sales in the VAD space are longer but the profits and margins are much higher with opportunities for reseller partners to earn recurring revenues broadened,” he noted.

He pointed out that as the channel continues to evolve with various routes to market appealing to the vendor community, it’s imperative for broadline distributors to focus on their strengths and continue to bridge that gap between the vendor and reseller. “Failing to embrace change will have dire consequences for some volume players as the IT market will continue to be highly commoditised going forward,” he said.

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