A steadier 2014

Inspite of the uncertainty about the regional economy following the continued political instability in Egypt, Iraq and Syria, the channel’s major stakeholders are optimistic about the next 12 months in the MENA region.

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A steadier 2014
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By  Piers Ford Published  January 27, 2014

Inspite of the uncertainty about the regional economy following the continued political instability in Egypt, Iraq and Syria, the channel’s major stakeholders are optimistic about the next 12 months in the MENA region.

Many channel players found 2013 something of a rollercoaster, with dwindling hardware margins and regional political difficulties helping to give the year a stop-start feel and making it difficult for resellers to plan for the longer term with confidence.

Despite this, the advance of new technologies, a business community that has become increasingly consumerised in its use and expectations of devices and apps, and the impact of cloud and virtualisation on corporate computing models, are leading most commentators to predict steadier conditions and greater investment in innovative IT strategies across the public and private sectors for 2014.

“Comparatively, the year 2013 has been tough for the channel in terms of the bottom line,” said Shailendra Rughwani, CEO at Experts Computer, a Dubai-based solution provider company. “We saw a lot of pressure on margins even though the top line grew, depending on the focus of each company. Regionally, some countries were either closed for business or were slow. We saw a slowdown in countries like Saudi Arabia due to summer, and then immigration issues. We also saw slowdown in shipments to other Middle East countries mid-year.”

Broadly, however, SMB spend on IT held up throughout the year and resellers who have started responding to global trends such as cloud, big data and BYOD with tailored bundles of services are starting to reap considerable benefits. Understanding fundamental shifts in the market is crucial.

“The UAE has seen a marked growth in the SMB/SME sector,” said Ali Baghdadi, president of Ingram Micro - Middle East, Africa and Turkey. “Dubai in particular displayed growth emanating from many new start-ups and expanding businesses. Some free zones like TECOM can no longer accommodate new companies.

“Saudi Arabia continued its solid growth mainly due to the government’s investment in the public sector, education and infrastructure. Qatar’s growth seemed to be in specific verticals and mainly government funded.

“The highest growth we have seen from the channel is from partners specialising in storage, virtualisation and unified communications. Smart handhelds and mobility solutions also drove growth but with the constant decline in ASPs, some partners have been caught with devalued inventories.”

While there is widespread agreement that UAE and Saudi Arabia will continue to spearhead channel success in 2014, other countries are stirring with considerable promise.

Ashish Bharti, president, Redington Gulf- Volume Division, said the channel outlook for 2014 seems different for each country in the region. Bharti said while stability has returned in some markets of the South Gulf region such as UAE, the scenario is opposite in Egypt where the market is still volatile.

Bharti noted that Qatar offers a lot of promise while in Kuwait projects seem to take more time in closing. “Saudi Arabia has initiated lots of projects while on the consumer side there is a rapid adoption of mobility products. Overall the sentiments are positive with two major world events to be held in this region (FIFA World Cup 2022 in Doha and World Expo 2020 in Dubai), the Middle East will remain bullish for some time to come,” he said.

Bharti added that Qatar, Saudi Arabia and UAE offer the strongest opportunity for the channel in 2014. “The growth will be driven by large projects and investments including initiatives by the government. These investments would be mainly towards the adoption of cloud, emphasis on security and shifting towards mobility products,” he said. “With Dubai Winning the Expo 2020, both government and private investments will boost most segments of the economy in the UAE.”

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