Vendors to put more emphasis on Middle East channel, says report

IT firms will turn to their Middle East operations for growth as worldwide technology spend continues to slow down, but there could be plenty of disruption along the way

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By  Administrator Published  January 1, 2007

Vendors across the IT sector will turn to their operations in emerging markets such as the Middle East to stimulate growth this year, according to a report from IDC.

The market intelligence provider expects worldwide spend on IT to grow by a modest 6.6% in 2007, and claims that this will spur industry leaders to take chances and explore new areas for growth.

Although the emerging BRIC (Brazil, Russia, India and China) countries will play a key part in the growth, the Middle East will show its early potential as the new hot market in 2007 along with emerging Asian countries, Africa and areas of Latin America.

As larger companies begin to shift their focus towards more of these emerging markets, this globalisation will result in ‘hyperdisruption', reckons IDC. Vendors will adopt new approaches in order to maximise their market share in these countries and increase their emphasis on the SMB sector.

IDC has warned that this trend could have an unsettling effect on the channel. Frank Gens, senior VP research at IDC, claims that as IT market leaders step up the hunt for growth, there will be a series of shifts that alter the shape of the market. "We will see channel oriented players going more direct and direct players developing radically new channel strategies," he said.

Gens claims that with the SMB sector growing in significance, there will be less distinction between business and consumer players and technologies. And as the search for market opportunities brings SMBs further into the equation, the ability to scale down offerings will become vital for many IT vendors.

Further disruption will come from online and offshore services players pushing into the SMB market with innovative new offerings, becoming prime targets for acquisitions in the process.

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