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OCTOBER 2008 Vol. 06 Issue. 10

BUILDING AND DELIVERING IT SOLUTIONS FOR THE MIDDLE EAST

TIP PIN Re G 20 veal T 09 ed H Ch : Th E a e Su nne res SC rve l C ult y ( onďŹ s o AL 34 d f th ) enc e ES e

Ame merr Khre Khre r inoo, CEO, EO O Em Emita ita t c Disttrib ta rir uti u on; n Ya Yaser aser Sh S an, an Ch C annell Mar M ket Ma k ingg Maanag ke ager ager, er,r Ac A er; e Ra er R mi m Al A Sa Sal a eh, e C Chann n ell Sa nn Sal a es Man Manage age geerr,, AM AMD M

SYMANTEC SIGNS ASBIS SERVER MARKET SLUMPS TECH ACCESS UNVEILS NEW UNIT EX-VIEWSONIC CHIEF RETURNS TO CHANNEL

Building and delivering IT solutions for the Middle East Vol. 07 Issue. 10

www.itp.net OCTOBER 2009

CHANNEL MIDDLE EAST An ITP Technology Publication

INSIDE TRACK FRAYED RELATIONS HIGHER EDUCATION

Exclusive interviews with Microsoft & Almasa (24) Bond between distributors and insurers comes under strain (70) Vendors send partners to the classroom in quest for sales (74)

TIME TO SHINE

Our rundown of 50 Middle East executives tivess with a majorr role to play in bringing the good times back to the regional IT cchannel


_www.itp.net_

DATA LIST (1) // HEADLINE NEWS FROM THE MIDDLE EAST IT CHANNEL

::

PAYMENT AGONY FOR CHANNEL Middle East IT providers afraid of financial problems due to concern over ability of customers to meet payments and maintain projects in the current economic climate

MICROSOFT ALLAYS FEARS

M

icrosoft has assured its Middle East retail partners

that it currently has no plans

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IT providers in the Middle East admit they are more fearful of losing money as a result of customers struggling to honour payment terms than at any time before. The regional channel has seen a number of resellers encounter serious financial

difficulties this year. Many of the problems suffered by the channel have been blamed on end-user customers defaulting on payments or failing to secure finance for projects. The pain has been felt right the way through the market to distribution and vendor level, as

VARs have subsequently faced difficulty paying their own suppliers. 51% of respondents to this year’s Channel Middle East Confidence Survey confessed they had ‘more concerns than usual’ about the ability of their customers to meet payments. A further 7% said they were ‘extremely concerned’ about the current situation. Although the Middle East IT channel is accustomed to payment and credit terms that often stretch way beyond the typical 30 to 45 days common in other markets, keeping on top of accounts receivables has become essential

in recent months. The general slowdown in business, coupled with pronounced cash flow pressure, has made it more complicated for companies to atone for customers that fail to meet payments. TN Rajan, division manager for enterprise computing systems at systems integrator Alpha Data, says the severity of the issue varies from sector to sector, but suggests it has been more acute in markets such as construction and hospitality. “Some companies are defaulting on payments and we have had some order cancellations, which has left - - - > (4)

to begin competing with them by opening its own range of branded retail showrooms. The vendor is in the process of launching its own retail network in the US as it looks to emulate the kind of success that rival Apple has had in the consumer market, where it now operates more than 200 stores. Partners anxious that the move could be repeated over here have nothing to fear, according to Zaid Abunuwar, who oversees Microsoft’s partner activities in the Gulf. He insists Microsoft has no intention to alter its current partner-led retail model at this point in time. “We have very good partnerships with mega retailers like Carrefour, Virgin and Plug-ins and I think we are

I-MATE FLOORED BY FRAUD

VENDOR RETREAT SPARKS CONCERN In-country investment under scrutiny The credit crisis is forcing IT vendors and

>> distributors to centralise their activities,

but in-country presence is still a pre-requisite for Middle East success in the long-term. That’s the resounding verdict of senior industry figures in the Gulf, who fear that some of the region’s smaller markets will suffer if investment in local channels does not pick up again soon. SM Hussaini, general manager at Almoayyed Computers, believes that establishing some

- - - > (6)

able to meet the demand of our customers and demo our

Vendor closes Dubai operation after uncovering evidence of foul play

technology very well for our

The CEO of smart phone maker i-mate has >> revealed that the closure of the company’s Dubai

There is nothing that is planned

operations was linked to a “major fraud” committed by a former senior employee within the organisation. Jim Morrison, who founded the device maker eight years ago, said the fraud was discovered at the end of August and the case is now with the police. Efforts were made to rescue the Dubai business but the severity of the situation made it impossible. “This all happened just before we were launching [a new device range]. We produced all the paperwork, we have the devices and so we have to sort this problem first,” explained Morrison. He said the company was still committed to launching its new range of smart phone products and - - - > (9)

market with those partners. for the Gulf,” he said. Abunuwar insists that even if there was a U-turn in strategy at a later date, partners would always be part of the equation. “If we were to do something like this then it would actually be done through or with our existing retail partners. We would not want them to develop a market and then have no stake in it. That wouldn’t be right.”


// INSIDE THIS ISSUE >>

FRONTLINE

CHANNEL MIDDLE EAST_OCTOBER 2009

04 _Tripp Lite sparks up new initiative

11_Asbis lands Symantec rights

04 _DCGforms working group

11_Aptec gains Dell Saudi contract

06_M isery for server channel

13_Tech Access launches new unit

06_CG C boosts Nokia aQtar support

13_Sphere Networks sells up

09_Comstor handed autonomy

13_R eseller inks Canon LFPdeal

09_Alcatel-Lucent shuns channel

15 _Change of heads at Fujitsu

11_Former ViewSonic chief returns

15 ebates for retail channel _R

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INSIDE INFORMATION

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STEAMY WINDOWS

PEOPLE

23_UNATRAC TAKES AIM

93_CISCO CHIEF’S NEW POST Mzen aJ bri installed as managing a director of lGobal K nowledge’s iddle E M ast and Africa business

32_REVVING UP THE CHANNEL

93_PARAMOUNT NAMES COO

Former iM crosoft and P Hveteranturned-consultant Samer aKrawi calls for change in the iM ddle aEst channel

Industry veteran .GR amaswamy appointed to run security reseller’s day-to-day operational affairs

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95_WAN PROJECT COMPLETE

Demand for laptops and netbooks spurs hopes of a recovery in sales

Blue Coat resellers install rPoxySG appliances for investment company

89_APPLE UPDATES PRODUCTS

95_STS LANDS ACER DEAL

M ultimedia vendor bids to continue retail success with new line-up

Rseller set to furnish oJ rdanian tax e office with latest Acer hardware

BUSINESS INSIGHT

97_LASTING THE DISTANCE

oMre misery predicted to come after first-half printer sales decline 24 %

Logitech unveils latest portable speakers with extended battery life

91_VAR TOUTS ‘PAY AS YOU GO’

97_LOSING WEIGHT

iM crosoft Navision ace gets set to test region’s appetite for utility computing

Fujitsu thin client offers a“ffordable” entry to server-based computing

91_EXTREME TARGETS CHANNEL

97_HANG TOUGH

Networking vendor strikes formal agreements with 10 E A M partners

Pnasonic introduces major updates a to its business-rugged mobile C P line

>>

Almasa CE OM ehdi Amjad clarifies company’s strategy

TIPPING THE SCALES The results of the 2009 Channel Confidence Survey provide an insight into when the iM ddle aEst channel expects the tide to turn.

(50) TIME TO SHINE oHld on tight as we bring you a rundown of 0 5 key executives with a role to play in making sure the channel has a bright future.

PRODUCTS

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91_PRINTER SECTOR JAMMED

(29) RATIONAL THINKING

(34)

SOLUTIONS

89_TFT-LCD MARKET PICKS UP

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(24) iM crosoft channel chief aZid Abunuwar talks market opportunities and explains the company’s local channel strategy for Windows .7

iM ddle aEst chief Ismail Abdel Aziz reveals how the gEypt-based Dell distributor plans to conquer the u Glf

CONSUMER ELECTRONICS

// CONTENTS

(64)

EXPERT’S VIEW

Why cash flow management

>>is the key to market survival

(70) FRAYED RELATIONS A rise in insolvencies and turbulent conditions have driven distributors and credit insurers to take a close look at their priorities.

(18) EDITOR’S NOTE >>

The dreaded question

(87)

(103) GET TO KNOW {}

Shabu Sultan eneral aMnager, T G MC

FACT FILE

Apple takes a bite out of E A smart phone M market as handset .... .. spending continues ...

(15 )) 115 COVER IMAGE BY NEMANJA SESLIJA

_www.itp.net_


// CHANNEL MIDDLE EAST_OCTOBER 2009

_www.itp.net_

FRONT LINE (4)

< - - - (1) us struggling to clear out stock because it has been bought for a specific project. I would say close to 20% or 30% of my time is spent solving this problem and collecting money.” Rajan insists cases of customers failing to meet payments have become more isolated since the beginning of the year, but admits it has contributed to general credit availability being squeezed. The results of the Confidence Survey reveal that the channel currently rates delayed payments from customers as the greatest threat to the health of the overall market, with the exception of ongoing margin pressure. Serjios El-Hage, regional VP for the Middle East and North Africa at networking integrator EMW,

believes Middle East resellers need to show more diligence when it comes to weighing up the risk of taking on new projects that they might not get paid for. “I would say our payment terms are pretty stringent, but you still need to pick and choose your customers,” said El-Hage. “You can’t go after each and every opportunity, and if it is too good to be true then it probably is. That is how we have been able to manage our receivables.” Alpha Data’s Rajan agrees, saying every deal must be scrutinised. “The customer might want a good solution, but we need some assurances of money because there is a cost that we have to make. We have to assess the probability of default and

actually securing at least the cost, if not the profit,” he insisted. Resellers acknowledge that cash and early payment discounts — as well as extended credit terms — offered by some vendors have provided added financial flexibility, but there are still calls for more support to be offered by suppliers. Shahood Khan, sales and marketing director at IT distributor Empa, believes vendors are in the best position to help the channel in spite of the proximity of distributors to the VAR community. “If you look at the big vendors then a lot of the leads come directly from them and the major accounts are managed,” observed Khan. “The end-user will listen more to them because the vendor is in a powerful situation.”

TRIPP LITE AIMS TO STRIKE GOLD WITH NEW INITIATIVE UPS and connectivity solutions outfit launches reseller scheme to increase Middle East sales

T

ripp Lite has rolled out its Golden Reseller Power Partner (GRPP) Programme in the region. The scheme is designed to equip partners with the tools they need to conquer new markets. Tripp Lite works with a number of VARs, including ATN Solutions and GE Solar. Tripp Lite says the perks of belonging to the programme vary between membership levels. Business Partners receive staff certification for one technical and two sales personnel, as well as monthly product up-dates, promotional materials and lead generation tools. Enterprise

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Partners, meanwhile, are entitled to special pricing consideration, exclusive promotions and dedicated service support. They are also eligible to have two technical and four sales personnel certified. “Through the GRPP programme, we are hoping to provide exemplary assistance to our regional resellers, which will motivate them to continue expanding their markets and grow their businesses further, amidst the evergrowing demand for power protection and connectivity equipment in the Middle East,” commented Vipin Sharma, VP EEMEA and India sales at Tripp Lite.

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In addition to its levelspecific advantages, the GRPP programme also provides association benefits for resellers, including invitations to community networks and online user groups. “We are anticipating the most interest in the discounted demo units and the special pricing consideration we are giving for large volume bids and business, as well as the lead generation programme and the frequent promotion and support we are making available to all our resellers,” added Sharma.

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Vipin Sharma cites discounted demo units and special pricing as key features of Tripp Lite’s new programme

DCG FORMS WORKING COMMITTEE IT group names six-man team to handle affairs

T

he Dubai Computer Group (DCG) has confirmed the formation of a new working committee following the conclusion of its recent AGM. The committee was due to gather for its first official meeting as we were going to press. The committee is being headed by AOC Middle East sales chief and former DCG general secretary, Suchit Kumar, and currently consists of five other members. They are: Bhavesh Trivedi from Croma Trading, Hiren Vadodaria of Compunics Technologies, Ashish Daftary at Keydata, Idrish Chaatariya from CompuAge and Sha Computers boss Sha Mohamed. “The committee will be active at grassroots level so they will be in direct co-ordination with most of the members,” said DCG president Shailendra Rughwani (below left) about their role. “What we will eventually be doing is assigning roles for things like financial issues or grievance issues and then form sub-committees from those.” Rughwani insists there is scope to increase the size of the committee as the DCG looks to establish itself. “We don’t mind more people joining — we probably want to have 10 or 12 people in total, who in future can take over from the present managing board. They will be able to get trained and used to the way things work with a view to then taking over,” he said.


// CHANNEL MIDDLE EAST_OCTOBER 2009

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FRONT LINE (6)

< - - - (1) form of in-country presence demonstrates a “commitment” to local customers, but claims many vendors which were lining up fully-fledged subsidiaries in Bahrain before the recession struck have been quick to shelve those plans. “In reality, what we have seen is that the companies which committed to in-country operations did come to Bahrain, but only with the bare minimum resources,” said Hussaini. “Some of the partners here are just sharing offices; they have got their presence through business centres.” Vendors and distributors that don’t have offices in multiple countries are invariably making do with serving the region from Dubai, particularly as they can easily supply adjacent markets from Jebel Ali.

Faisal Jamal, COO at supplies distributor Despec, says it is inevitable that the crisis has slowed down some companies’ expansion plans because it is difficult to justify investments when you consider the high cost of local operations and unpredictable conditions. “Telling an investor you need to spend US$300,000 or US$400,000 on setting up a local office is a difficult pill to swallow,” insisted Jamal. “But if you are looking at it from a long-term perspective then it is absolutely critical to be in-country in markets such as KSA, the Levant and Egypt. Short term, however, I think all the distributors just need to manage it in a way where they are not taking too high a risk.” HP is one of the few vendors to be present in almost every Middle East

::

CGC BOOSTS NOKIA SUPPORT IN QATAR

S

olutions provider Consolidated Gulf Co.

(CGC) has opened the first ‘Signature’ Nokia Care Centre in Qatar following the recent market. KV Narayanan, distribution manager at HP, can understand why the present climate might provoke cautiousness but he believes suppliers should think carefully before they alter any in-country plans. “The level of importance still remains the same today” he said. “Possibly the bandwidth and the capability to invest, or the appetite to invest, has reduced given the current situation, but it has not changed the importance of focus in this market.”

overhaul of the handset HP’s KV Narayanan says the crisis has not changed the importance of in-country presence

vendor’s after-sales support model in the region. CGC claims the facility will transform the way that users receive after-sales support for their products. The Doha-based centre is equipped with trained technical and front office staff, 12 dedicated service counters and increased waiting capacity. In addition to the support centre, an adjacent showroom gives customers the opportunity to sample the vendor’s current range of mobility products. “The new CGC Nokia Care Centre will be able to meet

MISERY FOR SERVER CHANNEL Middle East and Africa server market feels the full impact of the downturn as quarterly sales decline by 25,000 units

M

iddle East server vendors are licking their wounds after volumes crashed 30% during the second quarter of the year. Confirmation of the slump is a further indication of just how dramatically end-users have cut back on hardware spending since the credit crisis struck the region. Sales of servers in the Middle East and Africa region totalled 58,000 units during Q2 — almost 25,000 fewer shipments than the same period a year before, according to latest data from IDC. The slump in sales meant the value of the MEA server market declined 28% to US$316m.

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Stefania Lorenz, systems research director at IDC, said the drop in shipments was a sign that the Middle East had “yet to recover” from the economic crisis. Amazingly, despite the dire performance, the MEA market actually performed better than other regions in the EMEA theatre. Server sales in Central and Eastern Europe nose-dived 46% as every country in the geography failed to achieve growth. Overall, the EMEA region suffered the ignominy of registering its lowest-ever revenues for a second quarter — down 36% year-on-year to US$2.9 billion.

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In vendor terms, Fujitsu came off worst as its EMEA sales fell 43% against the same quarter last year. Sun and HP also had quarters they will want to quickly forget after volumes dropped 38% and 37% respectively. IDC analyst Beatriz Valle said recent acquisitions made by IT vendors had compounded the overall market uncertainty about changes in the server landscape, but she forecasted greater stabilisation in the current quarter. “Virtualisation on x86 is seen as the growth engine by server vendors hoping that business will pick up in the traditionally strong fourth quarter,” she added. “But it will take much longer than that for server revenue in EMEA to go back to the peak of US$5.4 billion seen in Q4 2007,” she commented.

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consumer satisfaction with a superior blend of value, cost-effectiveness and ecofriendliness,” stated Anil Mahajan, COO at CGC. CGC claims it intends to expand the number of Care Centres it operates in Qatar to make it easier for customers to get their handsets repaired. It already offers services through several of its existing Nokia stores and more than 300 partner outlets in the country.


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// CHANNEL MIDDLE EAST_OCTOBER 2009

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<- - -

(1) would offer new contracts to existing retail partners if required. Morrison said the situation had made it difficult for i-mate to pay staff on time and led to around 30 of its 40-strong workforce being laid off. The Dubai operation is now being shut down with the assistance of Dubai Internet City, where it was based. It is understood that some former employees plan to raise their dispute with local authorities, but no details had emerged as we went to press. Despite the closure of the Dubai operation, Morrison insisted that “everything about i-mate will continue”. He said: “We are keeping the brand, we are putting out products, and we will be looking for more funding of course. There is a lot of good stuff happening.”

In a statement put out by the company following news of the fraud, i-mate said that its brand and assets had been acquired by a new company called Hillfoot Limited in a bid to safeguard them. Hillfoot will trade as i-mate with operations in Australia, Taiwan, the UK and the US. The new company will led by Morrison, who has committed to stay until normal trading is resumed and the financial infrastructure is created to take the business forward. Other remaining senior management figures include engineering director John Bassachi, sales chief Michael Cavey and product development director Majeed Salman. i-mate also said in the statement that it will continue to offer smart

::

ALCATEL-LUCENT SHUNS CHANNEL

A

lcatel-Lucent has confirmed that a high-

profile contract it has just won with an Iraqi mobile phone provider will be delivered phones on the Microsoft Mobile platform and is planning the launch of its 810F rugged smart phone within the next few weeks. Morrison, who is normally based in the US, said that it was still too early to say if the office in Dubai would eventually re-open. However, he said the company still continues to operate in other markets around the world and would seek to maintain customer relationships in the region even if it meant serving the market from elsewhere.

Jim Morrison is leading a new company that will trade as i-mate after acquiring its brand and assets

without the involvement of channel partners. The deal will see AlcatelLucent deploy a greenfield wireless broadband network in Western Iraq for Hi Link Telecom, the winner of an Iraqi CDMA fixed wireless licence. Vincenzo Nesci, president of Alcatel-Lucent (below), hailed the contract as “significant” due to the scope of solutions that will be involved. However, despite the scale of the project, the vendor has decided that it will not call on the skills of reseller partners, but instead deliver it directly.

COMSTOR HANDED AUTONOMY Westcon creates new Comstor division that will operate with its own corporate structure and profit and loss centre

N

etworking distributor Westcon is unifying its Cisco-focused business into a single organisation with its own management structure and P&L responsibilities. The creation of ‘Comstor Worldwide’ is designed to build on the multi-regional brand that has been established through Westcon’s existing Comstor business during the last decade. Until now, there have been several countries where the company has only gone to market as Westcon. Cisco remains Westcon’s largest vendor partner, accounting for around 50% of the US$2.9 billion global revenues it made last year.

Westcon hopes the new Comstor Worldwide structure will enable local Comstor operations to benefit from global inventory and logistics capabilities, as well as shared services and financial support. As Westcon has always operated a Comstor unit in the Middle East it is not expected that the change will have a massive impact on the MENA region, although regional managing director Steve Lockie said it would reinforce the global brand and global distribution contract that it has in place. “We have been utuilising many of the global Comstor tools for some time now — such as ‘how

>>

“We are carrying out the

to sell’ guides and dedicated web and micro-sites — and these are now being taken to market in other regions,” explained Lockie. “We have leveraged global inventory for some time, our systems continue to be enhanced and we now have full visibility of not just our regional warehouse, but truly global inventory, and Cisco’s blessing to move it around if we have to,” he commented. Lockie added that the company’s Middle East operation has recently taken responsibility for channel development in Morocco, Algeria, Tunisia, Libya and Egypt as it looks to build out Comstor’s regional presence. The formation of Comstor Worldwide follows last year’s signing of a global distribution deal between Westcon and Cisco.

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project directly without partners,” confirmed a spokesperson for the company. “Commercially, the deal was finalised through our representative office based in Jordan and operationally the project will be carried out through our resources based in Iraq as we currently have 26 Iraqi employees in our office located in Baghdad.”

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Visit Kaspersky stand (ZQ15) located in Zabeel Hall â&#x20AC;&#x201C; Gitex Exhibition 2009

Sales Department: sales@ae.kaspersky.com


// CHANNEL MIDDLE EAST_OCTOBER 2009

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FORMER VIEWSONIC CHIEF TAKES ON CHANNEL ASSIGNMENT AT GLOBAL WHITEBOARD MAKER

APTEC GAINS DELL SAUDI CONTRACT

Aaron Fright steps back into the breach with mission to develop SMART Technologies’ go-tomarket structure in the Middle East five months after resigning from audio-visual manufacturer

F

ormer ViewSonic Middle East boss Aaron Fright has returned to the channel scene with whiteboard maker SMART Technologies. Fright, who resigned from his post at the display vendor back in April, is SMART’s first ever Middle East official and will be responsible for developing the company’s operations as regional director. The vendor had been managing the Middle East from its Canadian HQ up until Fright’s appointment, although its brand is well-established in the region due to its long-term partnership with Jebel Alibased iMark Distribution. Fright’s initial task will be to finalise SMART’s regional strategy and tighten up various working processes. He will also be reviewing the vendor’s channel

policies. “My priority is to ensure that we retain our leadership position, but also to make sure we build the necessary channel structures and processes that will help us improve the way we do business,” he explained. “It is important that we provide increased levels of support for our existing business partners and identify what we need to do to achieve that.” SMART already has a solid base of Middle East partners selling its range of whiteboards, software and accessories into key vertical sectors such as education, corporate and military. Fright admits it is likely that the vendor could introduce a partner programme to reward reseller loyalty next year, but for now his main objective is to ensure the

A

ptec has started carrying Dell commercial products

in Saudi Arabia, just a month after inking a deal with the PC and storage hardware vendor for the Egyptian market. The agreement means that Aptec is now authorised to distribute Dell’s corporate range in all of the Gulf countries, the only distribution house to be afforded that privilege. Aptec will offer Dell’s full channel business is running as smoothly as possible. “There is a requirement to make sure we have a robust channel, both in terms of getting a good level of information flow from SMART into distribution, but also from distribution into what I would call the tier-two reseller parts of the channel,” he said. The global whiteboard market was worth180,000 units during Q2, according to Futuresource Consulting.

Aaron Fright will manage SMART’s Middle East strategy

commercial line-up, including PowerEdge servers, EqualLogic storage, Latitude laptops, Precision workstations and OptiPlex desktops. “The addition of a large market like Saudi will further strengthen our reach,” insisted Bahaa Salah, managing director at Aptec Distribution (pictured below). “There is significant potential for Dell’s product line in Saudi Arabia and with the right partners and an aggressive strategy we

ASBIS LANDS SYMANTEC RIGHTS Distributor expands its portfolio after agreeing deal with Symantec to serve a number of North African markets

A

sbis has begun selling Symantec licences to resellers in North Africa and Iraq after revealing that it recently struck a distribution agreement with the security software giant. The alliance gives Asbis distribution rights for six markets: Egypt, Tunisia, Algeria, Morocco, Libya and Iraq. Warsaw-listed Asbis disclosed details of the partnership last month in accordance with

corporate governance rules that require it to declare new distribution agreements. It also announced tie-ups with manufacturers ASUSTek, MSI, Kaspersky, Kerio and Apple in various European markets. “[The] signing of these new agreements is a part of the company’s strategy of broadening its product portfolio, faster development of finished products and software portfolio and sales,

>>

and improvement of customer reach,” stated the distributor. Asbis also confirmed further contracts were “in the pipeline”. It did not give specific details, but said they were likely to be finalised by the end of Q4. Asbis remains committed to building out its portfolio as it looks to expand beyond its traditional components niche. In the Middle East it has signed Dell for Bahrain and Lenovo for Saudi Arabia during recent months, as well as a slew of new vendors in Europe. Last quarter it suffered a 33% slump in revenues, however, as the downturn hit European sales.

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expect a high success rate.” Up until now, Dell has relied on Mindware and BDL as its commercial distributors for the Saudi market. It also has in-country relationships for home and home office products with Asbis, Metra and Jarir.

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// CHANNEL MIDDLE EAST_OCTOBER 2009

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TECH ACCESS INSISTS LAUNCH OF NEW UNIT WILL LEAD TO SERVICES SALES FOR DEALERS

RESELLER INKS CANON LFP DEAL

Storage and security distributor creates a new media-focused business division that it claims is likely to give resellers a prime opportunity to ramp up their product and services revenues

T

ech Access has formed a new business unit targeting opportunities around content delivery in the digital media space. The division, which is called Tech Access eMdia Solutions T ( AM S,) will also develop content portals for telcos and media groups. Tech Access, best known as a Sun and Symantec distributor, expects the division to benefit its core business as it claims most media groups are in the process of digitalisation, which would typically necessitate heavy investments in hardware and software marketed by the vendors it represents. It is also hoping resellers will see the fruits of its diversification as there will be opportunities to explore and service new opportunities in media.

iG “ven the convergence of media and telcos we feel that we are in a great position to drive this value proposition through our channel,”said company president Shomail h Galib. W “ e are investing for our partners to drive more business through their existing relationships, helping them realise new lines of business through traditional sales accounts and leading them into new opportunities. In terms of future positioning, this is a perfect enhancement to our traditional VAD business as we start to invest in industry practices,”he added. TAM S will be headed by Adrian Wood, who recently worked for Showtime and has a background working for regional cable operators. h Galib insists the new unit is not being viewed as

H

ybrid Imaging rPoducts has landed a contract

with Canon that will see it distribute the vendor’s large format printers in the A U.E Canon expects the partnership to extend its reach in the market and increase the visibility of its printer line-up. Vishal oGhel, product manager at Canon iM ddle aEst b ( elow), says the printer vendor’s carefully-crafted an independent operation and will in fact function alongside its traditional distribution business. T “ hese are completely integrated as we now introduce industry focus within Tech Access,”he said. W “ e are investing in people from within the industry who can lead our channel into new opportunities in existing accounts and green field opportunities, adding more value in driving solutions.”

Shomail Ghalib says Tech Access’ new division will help resellers expand their businesses

channel model gives the tie-up added significance. u O “ r selective partner programme allows only accredited partners to sell and service our range of business solution products,”he explained. IH “Pwas selected as a Canon LFPpartner based on its proven expertise, strong market knowledge and commitment to the highest standards of sales, service and customer satisfaction.” IH ,Pwhich is a member of Al

SPHERE NETWORKS SELLS UP Founder and CEO of UAE-based networking vendor confirms takeover plans after deal with manufacturer

A

s we were going to print, Sphere Networks was preparing to announce further details of a deal that will see the majority of the company — including the intellectual property rights to its network management software — taken over by a major Taiwanese manufacturer. oMhamed aHmedi, CE Oand founder of Sphere, confirmed that the suitor assembles switches, routers and access points for third-

party vendors, but has acquired Sphere to fulfil its ambitions of moving into the production of own-brand products. Sphere’s technology is expected to help the firm complete the software and functionality side of its portfolio. After the official announcement, Sphere Networks will be enveloped into the purchasing company, including its IPand technology and supporting technical resources, which amount to almost

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20 employees. oHwever, aHmedi said that staff which work in the sales and human resources side of the business will be sacrificed as a result of the merger. Sphere was launched four years ago and has since received investments from Dubai Silicon aOsis Authority and Intel Capital. A “ ny start up company is going to have two exits,”said aHmedi. T “ hey are going to get acquired, or they are going to IP ,Oand right now is not exactly a very good IP Oclimate, so a merger or an acquisition is perfect and it is something that was selected by DSO A, myself and Intel.”

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Abbas rGoup — the firm that also owns Fujitsu distributor Distributech — is one of the longest-serving office automation suppliers in the A U.EIt will have a dedicated team of specialised engineers trained directly by Canon.

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Attractive promotional Discount up to 25%*


// CHANNEL MIDDLE EAST_OCTOBER 2009

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FRONT LINE (15)

FUJITSU BOSS BEGINS “STREAMLINING” TASK AFTER SUCCEEDING AFRICA-FOCUSED REJASSE

ABU DHABI GEARS UP FOR ICT SHOW

Channel sales director given the job of sorting out PC vendor’s partner strategy as he settles into the hotseat following Stephane Rejasse’s transition to new role handling African markets

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ujitsu Technology Solutions’ Middle East boss Stephane Rejasse has taken on a new role that has seen him gain responsibility for developing the PC vendor’s business in Africa. The move has led to the company promoting Farid Al Sabbagh to the role of Middle East managing director in his place. Rejasse’s task will be to grow the vendor’s sales in Africa with a particular focus on channel development and empowerment, according to the company. His new assignment leaves Al Sabbagh in charge of the vendor’s Dubai-based Middle East operation. Al Sabbagh initially joined Fujitsu nine years ago as Middle East distribution sales manager before departing for a MEA-wide

SMB and channel role at Cisco back in 2006 . He subsequently returned to Fujitsu and has since been working as channel sales director for MEA and India. While Rejasse’s objectives look likely to involve the widening of Fujitsu’s partner base, Al Sabbagh appears to have the opposite exercise on his hands. According to Fujitsu, he will be responsible for “streamlining” the company’s channel network as part of its plans to grow the business in the region. Al Sabbagh says he intends to improve partner profitability. “Fujitsu is fully committed to its customers and channel partners in the region, and my primary focus will be to ensure profitability for the company and our partners, and develop opportunities in

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est practices, trends and techniques to support

Abu Dhabi’s quest to develop its ICT infrastructure are set to be debated at a new show scheduled for next year. The Future ICT Summit (FICTS), which will take place between March 15 th and 17th 2010 at the Abu Dhabi National Exhibition Centre, will see some of the world’s top ICT experts share their thoughts on the areas of enterprise and services,” he stated. “The company will continue to be actively involved with the business trajectory of our partners and the role they play in growing the company’s market share. Fujitsu will focus on providing support through new initiatives that will enable our partners to provide superlative levels of service to customers throughout the region,” added Al Sabbagh.

Farid Al Sabbagh has vowed to improve partner profitability

ICT strategy and development. “IT is at the heart of economic development and the Summit will support Abu Dhabi’s leadership vision through this rare gathering of government leaders and industry experts,” stated Chris Fountain, managing director at Turret Middle East, which is organising the event. Held in conjunction with Injazat and the Abu Dhabi Systems and Information Centre, FICTS will host several

REBATES FOR RETAIL CHANNEL Components and finished goods vendor devises sales incentive programme for retailers and PC assemblers

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raphics cards maker Manli Technology is promising to supplement its drive into the Middle East market with a dedicated channel sales campaign aimed at the region’s retailers and systems builders. The company will offer “defined rebates” for retail owners, as well as spiff programmes for front-end sales staff. It says the value of the rebates is not fixed and will be decided on a deal basis.

Hong Kong-based Manli, which announced plans to expand into the region earlier this year, says the campaign will be supported by after-sales support initiatives across the Gulf as it bids to build a brand that consumers can trust. In addition to graphics cards, Manli produces motherboards, netbooks and multimedia devices. Michael Chu, sales director at Manli Technology, insists the programme it is rolling out

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emphasises the company’s channel-centric business model. “Manli is not a company that is interested in short-term sales, in spot selling to meet targets,” he commented. “We are focused on back-to-back support for our partners to ensure that they can profit from our products, and to develop a brand and name in the Middle East that customers know is of high quality.” According to Chu, Manli is in the process of finalising distribution deals with potential Gulf partners after recently undertaking a visit to the region to explore regional alliances.

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conference sessions on topics including new technologies for the public sector, open source in government and business continuity strategies. An exhibition of products from more than 100 companies will run alongside the show.

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Visit us during Gitex 18-22 October 2009 Fairmont Hotel Dubai, Sh.Zayed Rd. 33rd Floor Palm Salon 6

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// CHANNEL MIDDLE EAST_OCTOBER 2009

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NEWS ANALYSIS (17) // EXTENDED COVERAGE OF THE TOP STORIES

BIG GUNS SET SIGHTS ON CHANNEL AT GITEX 2009 There will be an affluence of announcements aimed at catching the channel’s attention during this year’s GITEX Technology Week, with a host of leading ICT names set to unveil compelling new offerings for Middle East partners.

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GITEX returns on the 18th to 22nd of this month, once again bringing with it a number of key sections to encompass the entire ICT community, including Business Solutions, GulfComms and Shopper, as well the Global Conference Programme. A major adaption to this year’s show is the relocation of the consumer electronics section to new halls at the front of the Dubai International Convention and Exhibition Centre. “The expansion of the venue will allow the show to implement new features such as Smart Office and Smart Home, which will showcase the latest technology in the environment it is designed for,” said Helal Saeed Al Marri, director general of the Dubai World Trade Centre, organisers of the show. “Also new this year are the Vendor Theatres on the show floor where new solutions can be presented to the market.” One of the most eagerly-awaited announcements this year is the launch of Windows 7. Visitors to Microsoft’s booth will be able to gain a sneak preview of the new operating system before it is officially rolled out in the region on the fifth day of the show. Not to be outdone, software rival Oracle is gearing up for the Middle East debut of its Fusion Middleware 11g application family, which is designed to

improve IT efficiency and enhance investments in CRM, ERP and other applications. Fellow industry bellwether HP will also be giving the channel a glimpse of the latest products that it believes will provide partners with tasty margins. Its new TouchSmart PC series, which runs on internally-developed software for touchscreen machines, is poised to be one of its major technology highlights. Elsewhere, brands such as Epson, Adobe, Symantec and Sonicwall will be updating partners on the latest solutions and initiatives available to the Middle East market. A strong distribution contingent is expected once again, with leading names from the broadline and enterprise space looking to target new trade customers by touting their product portfolios. Mindware claims its participation will focus on educating the channel about value added distribution, while Logicom plans to use its appearance as an opportunity to meet with major vendors and expand its customer base. “We also plan to discuss strategic initiatives pertaining to inventory management, product management, marketing and training,” explained general manager Nicholas Argyrides. “We have 12 separate booths within our 200-metre square stand for our partners at this event.”

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Other distributors that are set to feature prominently at GITEX include Aptec, Computerlinks, Adaox and TopNet, a Jebel Alibased supplier of networking and telecom products. “We are a fouryear-old company and many of our vendor partners have entered the market through us,” revealed managing director Kandasamy Ganesan. “We want to promote the awareness of these products and solutions in the region.” Another company that is looking to use GITEX as a way to further its regional aspirations is Arabian Business Machine (ABM), the Middle East sales agency for Apple. Its objectives remain simple, according to marketing manager Nathalie Khouri. “We are exhibiting during GITEX to bring product knowledge and awareness of Apple products,” she said. “We also plan to meet with our existing channel partners over the course of the week.” While financial issues are likely to feature at the heart of many conversations taking place this year, Al Marri insists the downturn has at least highlighted the importance of securing face-to-face engagement with regional clients. “We are therefore experiencing many new companies coming to the show, and former exhibitors returning including Aastra, Dell, Integrated Telecoms Company (ITC), ITIDA, Kaspersky and McAfee,” he said.

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GITEX 2009 is set to be the venue for a host of key software launches from major vendors such as Microsoft, Adobe and Oracle.

In addition to the usual scenes at GITEX, visitors will see the use of ‘vendor theatres’ this year — giving firms the chance to show off their wares in special presentation areas.

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EDITOR’S NOTE (18) // by Andrew Seymour

WILL Q4 REALLY COME TO THE CHANNEL’S RESCUE? For most of this year, the assumption in the Middle East channel has been that the fourth quarter will provide the respite the market has been desperately craving. But what if it doesn’t actually turn out to be that good?

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With the summer months labelled a write-off before they’d even begun, a postSeptember upturn in fortunes has been eagerly anticipated by both the vendor and distribution camps. In fact, rarely has there been such onus on a single quarter to compensate for the mess that has occurred before it. Yet I’m sure I’m not the only one now wondering if some firms have put too much emphasis on a Q4 recovery taking place. As we enter the period when business activity is tipped to pick up, doubts over the likelihood of a sufficient-enough recovery to breathe fresh life into the market are starting to creep in. I’m sure many vendors and channel companies will record an improvement in their numbers once the fourth quarter comes around, but whether that will be due to a bona fide correction in the market or simply an indication of just how weak volumes have been in previous months is something that will need to be distinguished. Most analysts seem to be predicting that a genuine recovery will now take much longer to occur than originally expected — and it is difficult to disagree with them. Unfortunately, that is not good news for those companies that have been financially struggling of late. Experts have long cited

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consolidation as a natural consequence of the financial downturn and yet it hasn’t really happened. But the screw would be tightened considerably if Q4 fails to provide adequate relief, potentially signalling the end for traders and resellers that have been encountering severe cash flow problems all year. After all, if you delve beyond the ever-optimistic sound bites that emanate from the vendor community, tales of difficulty and disharmony continue to expose the fragile position that the channel finds itself in. From the stories of resellers failing to generate enough cash to pay their staff for two or three months at a time to distributors that can no longer obtain credit insurance for customers with unblemished payment records, it is clear that those who base their argument for recovery on the fact that the Middle East market hasn’t declined as rapidly as other regions are completely missing the point. At the end of the day, the prospects of an improvement in the channel’s health are closely tied to the availability of credit through borrowing and the ability to recover accounts receivables. The first factor is welldocumented, but it is the second point which has really squeezed the channel in recent months. The ramifications of resellers

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failing to secure money they are owed can soon escalate, especially in the present climate. Firstly, and most obviously, they can’t pay their suppliers. That can then lead insurers to pull credit cover, causing suppliers to freeze a reseller’s account because its payments can no longer be guaranteed. Suddenly, that reseller, which in all probability will eventually get paid, can’t source stock anymore because it’s on hold. Before you know it, one link in the channel chain has been entirely broken. It goes without saying that the ability of end-users to make payments is closely linked to the level of credit in the market, but that should not be used as an excuse to ignore the matter. In recent weeks I’ve heard growing calls for increased vendor intervention when it comes to this subject. Critics argue that greater vendor assistance with facilitating end-user payments would be far more helpful to the channel than simply knocking US$20 off a product’s RRP to make it more attractive Whatever happens in the coming months, the Middle East channel has more deep-rooted problems to address than can ever be corrected by an impromptu spike in sales. And if that’s the case then the question of whether Q4 will fail to live up to expectations won’t really matter at all.

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Companies are looking to the fourth quarter to save their annual numbers, but is it too soon to expect a full-on market recovery?

The twin factors of low credit availability and payment collection difficulties have made the Middle East market an unpredictable place to operate in recent months.


// CHANNEL MIDDLE EAST_OCTOBER 2009

_www.itp.net_

INSIDE INFORMATION (23) // EXPERTS IN THEIR OWN WORDS

UNATRAC BIDS TO CONQUER MIDDLE EAST MARKET After starting Egyptbased Mantrac’s IT distribution business more than a decade ago, business development director Ismail Abdel Aziz is now in charge of building up the company’s threeyear-old Middle East operation, Unatrac. We sat down with him to find out more about the Dell distributor’s regional plans.

CHANNEL MIDDLE EAST: Tell us about n Uatrac — you’re mainly known for being an authorised Dell distributor. ISMAIL ABDEL AZIZ: eYs, we have had a partnership with Dell for five years and we are the biggest distributor for Dell in gEypt. Last year we decided to go regionally with Dell and we are now their biggest distributor in the iM ddle aEst for the commercial business. CME: So how big is that business? IA: We do almost S Um 7 $ of Dell commercial business per quarter, but we plan to reach S U0 4 $m per year. oYu can then add S U1 $2m a year from gEypt to that number. CME: oHw does your A U-Ebased operation compare with your distribution business in gEypt? IA: We decided to go regionally by opening a branch in eJbel Ali in 2005and since then we have added Dell, iM crosoft and 3Com. The gEyptian operation is definitely bigger, but we are still building our branches in the u Glf. The gEyptian branch is our Q Hand it carries 12 brands so we hope to build a company like that here in the iM ddle aEst. At the moment we have around 18 0 active resellers in the C GC and we are trying to develop that further. CME: oHw many people do you have working for the u Glf operation? IA: We have 20 here, including logistics and finance, and three in u Kwait where we have a small branch. We are now on our way to opening a branch in Saudi Arabia because it is a market that we are trying to focus on. We will open in iRyadh and then we will expand our sales force and the second phase

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will involve eJddah and Dammam. At the moment we are serving the Saudi market remotely from eJbel Ali so this will give us an in-country existence that is much faster and more dynamic. We will use our resources to open new branches, but we will always make our decision based on whether we think the business is safe. CME: oYur contracts with iM crosoft and 3Com cover the Iraq market, which has opened up considerably in the last year. Is it now viable for distributors to begin building an in-country presence in Iraq? IA: It is still too early for that. oMst of the Iraqi people and the IT companies are based in the A UE and they bring the products in from the A U,Eso there is no need to open a branch. We have almost 20 Iraqi resellers that are based in Dubai and do their full operation from here. The Iraqi market definitely has potential but it is not secure. The government doesn’t have a clear vision about the IT infrastructure that needs to be developed in Iraq. CME: Does the fact that n Uatrac is known as a very Dell-focused brand go against you when talking with prospective vendor partners? IA: I’ll tell you something very important, vendors are seeking stable and financially-powerful distributors regardless of whether they are doing a business in Dell or another brand name. If Dell is a focus product then we will try to get market share through being a focused Dell distributor, but we will do that fairly. As we build Dell, we build all the other vendors.

CME: What is your perception of the iM ddle aEst distribution channel at the moment?The market still seems to be very competitive. IA: The competition has become more aggressive, but it will come down to whoever remains stable, has the necessary financial power and keeps their market share. yM belief is that this is the right time to increase market share because other people are trying to freeze or slow down their businesses. We are not providing credit for everyone, but we are insuring our credit so we are securing our business in that way. CME: Is the iM ddle aEst distribution landscape likely to change? IA: The number of distributors will shrink very soon because of the way some have been doing business. They have been working for a very small profit and so they will have to focus on another business because they won’t be able to remain stable. CME: What does that scenario mean for n Uatrac if it happens? IA: It will not harm our vision because we are not looking at big quantities and fast-moving items — we are providing a solution and targeting specific segments. We have succeeded in gEypt for 12 years and our focus for the future is to become one of the biggest distributors operating in the iM ddle aEst. CME: Do you expect more u Glf-based distributors to try and target the gEyptian market in future? IA: aMybe, but distributors there are stronger and more powerful so the competition will be very aggressive. They will have to think carefully before taking such a step.

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> Packaging for the new Windows 7 OS as revealed in Japan last month. There will be localised versions for the Middle East. GETTY Images

STEAMY WINDOWS As small and medium solutions and partners (SMS&P) director at Microsoft Gulf, Zaid Abunuwar heads one of the most extensive partner networks in the region. Channel Middle East grabbed five minutes of his time to talk about market opportunities for partners and the company’s local channel strategy for the upcoming launch of Windows 7.

: What are Microsoft’s main priorities when it comes to engaging with the channel at the moment? ZAID ABUNUWAR: There are a couple of things that we are very keen on doing. One is what we call ‘coverage’, which basically means looking at the market ecosystem. There are estimated to be 2,500 partners between different reseller and solution provider types. My first priority, therefore, is deciding how to cover this ecosystem, whether it is through field cover, tele-cover or through wider reach initiatives like Portal and things like that. The second thing is how we specialise our partners

: How satisfied are you with the current depth of Microsoft’s channel?

then looks at what our partners have to offer and what they are specialised in — and from that we identify gaps. Normally those are the gaps where we try to provide better coverage. For example, there is more demand for unified communications from a Microsoft platform than we have certified partners. There is more demand for CRM than we are able to provide in terms of capacity. There is more demand for portals like SharePoint than we can provide. So those three areas would be a requirement.

ZAID ABUNUWAR: Every year we do what is called a ‘capacity map’, which looks at the entire market and what customers need. It

: Are there any other areas that could provide an opportunity for partners because demand outweighs channel capacity?

so that we create a healthy environment where there is a good mix between competition, profitability and coverage. And the third thing is how we create demand for our partners. For example, we have got a 25-seat call centre that gathers opportunities from small and midmarket businesses and, together with our enterprise business, provides leads to partners.

(24) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


ZAID ABUNUWAR: There is hardly a customer I have visited or spoken to in the past 12 months that has not talked about virtualisation and unified communications, because those are great ways they can cut immediate costs and realise good ROI in the short term. We are actively recruiting partners in those areas and we want to provide better coverage to make sure that we can enroll more partners to cater for that. : The economic downturn is making resellers look very carefully at their costs. Are you finding that it is becoming harder for them to invest in Microsoft? ZAID ABUNUWAR: We work closely with partners on the investment that they need to make within their people. Once a partner works with us on a particular specialisation we actually provide something called the Microsoft Partner Academy, which is a highly subsidised training vehicle for partners. It helps them ready their staff and we ready them from a solution-selling competency, as well as a technical competency. Last year we delivered more than 2,000 training hours to partners and on average a partner would attend somewhere around 20 courses and the cost would be below US$3,000. That is instructor-led, classroom training. Our partners also have free access to the Microsoft Learning Centre, which is an online learning centre. Our single largest marketing investment is partner development. : Has Microsoft had to change its channel strategy because of the downturn? ZAID ABUNUWAR: That is a very interesting point because there are a few things here. The market conditions have changed, but I look at the figures — the ones that are quite dramatic and come from outside — and I honestly have a hard time agreeing with them because the business is still very healthy. We have just deployed a team of seven people to address more partners through tele-coverage because we believe this is a time when we can cover more partners that can help us launch and deploy a series of new technologies that we have. For example, we have Windows 7 coming out, which is a major wave, coupled with Exchange 14 and Office 14. That is on the health of the business so let me comment more

The market is teaching us and our partners the value of being specialised. We don’t want jacks-of-all-trades anymore around your question. Basically what we are seeing is that customers are investing in some technologies that were maybe not as important in the past — virtualisation and unified communications are two very obvious demands that are coming after the crisis, as I said. So what we are doing is prioritising our partners specialising on those technologies so that they can better support the market. : The concept of partner specialisation was a major theme at Microsoft’s Worldwide Partner Conference in July. Is that something you are trying to drive here as well? ZAID ABUNUWAR: I think the market is teaching us and our partners the value of being specialised. We don’t want jacks-of-all-trades anymore. The market and the ecosystem are looking for partners that can play in a highly specialised niche. For example, we have partners that specialise in securing Exchange using ForeFront and those partners honestly have a problem coping with the demand in the market. We have some partners who still want to play in the general area and they are feeling more of a crunch than others. : So are you consciously engaging less with those general partners? ZAID ABUNUWAR: Not engaging less. What we are doing is positioning our Microsoft Partner Network (MPN), which is the change to our partner programme that now calls for a verticalisation rather than just specialisation. We are actually helping those partners work with us to choose a niche in technology, vertical market and industry. That way, they can provide a more specialised service in the market and I think that will be a much safer bet going forward. : Microsoft announced a series of global workforce cuts earlier this year, including some in the Gulf region. How much of this exercise impacted channel-facing positions, and to what extent?

ZAID ABUNUWAR: Being a region that still had high and healthy growth last year — and when I say last year I mean the year ending June 30th — we delivered very healthy growth, although we have been hit by the crisis for two quarters. We have been fortunate in the fact that we have seen very little impact from the redeployments and reduction in force. What I can tell you is that net-net — from before the crisis until now — I have actually invested and added headcount in channel management. Some of the people were already hired, and as I mentioned to you before, we have mobilised a team of seven for the tele-coverage. We also have investments in field people so I am actually recruiting at this moment. The market is showing some interesting signs and we want to make sure that we are going to be able to capture the opportunities. : What preparations have you been doing with the channel ahead of the Windows 7 launch? ZAID ABUNUWAR: First of all, let me just highlight what kind of market we are talking

(25) BY ANDREW SEYMOUR

// CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


about here. Literally every single PC that was sold in the market — at least for the last two years — is an opportunity for an upgrade and that includes businesses and individuals. So we are talking about an installed base of more than 400,000 clients that are potential upgrades, and given that Windows 7 works better on existing machines than our previous operating systems it is going to be a very different ball game altogether. Our readiness programme includes north of 400 partners that are already being trained on Windows 7. A lot of focus is going into the RSPs, or the sales people at the retail outlets, to make sure that they can articulate the benefits and the differences to endcustomers that want to upgrade to Windows 7. From what I have experienced of Windows 7, I believe we are going to see a very different demand level altogether compared to Vista. : Is Windows 7 relevant to all partners or just ones in certain sectors? ZAID ABUNUWAR: Yes, pretty much, because the nature of the product goes from

From what I have experienced of Windows 7, I believe we are going to see a very different demand level altogether compared to Vista your home all the way to the largest enterprises, and every market is unique. If you are at home all you need to do is just buy it off the shelf and install it, while if you are an enterprise you need a big partner that can help you test your internal applications and plan your deployment roll-out. You are talking about a very sophisticated deployment service and we have got partners who are specialised in that. Then there are obviously partners who do the small business and medium business and their knowledge set is different so it really does include the whole spectrum of partners that are working with us on Windows 7. : Microsoft revamped its partner programme under the banner of the Microsoft Partner Network earlier this year. What can

(26) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_

partners expect from that as it continues to be rolled out in the region? ZAID ABUNUWAR: Right now we have more than 1,000 partners that are between Registered, Certified and Gold, and those are the partners that we are currently launching the Microsoft Partner Network to. If you want just two main themes for the programme then a very important change that I have personally been really looking forward to is that our previous Gold Certified Partner Programme talked about a partner’s competency, but the way MPN is evolving means that existing customers of that partner have rated them highly through surveys. The difference between just having a technical competency versus having a customer testimony on how that competency was applied to them is really a major differentiator in our market. The second thing is that we are trying to align the partner programme and the competencies in industries. There is a lot of other detail attached to the programme, but those are two specific benefits that I connect to very well. „


RATIONAL

THINKING

he distribution business can be a volatile one at the best of times, let alone in the midst of a worldwide recession. Distributors are inevitably forced to scrutinise costs even more closely than usual and make uncompromising decisions about the direction of their operations. Almasa, a stalwart of the Middle East channel, is no exception. In fact, the Dubai-based outfit has just emerged from what CEO and founder Mehdi Amjad describes as a “rationalisation” phase. It has been an exercise in forward business planning that has led to Amjad carrying out a complete review of the distributor’s strategy in a bid to prepare it for future growth.

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After carrying out a series of restructuring measures in recent months, IT products distributor Almasa is looking to put the tough times behind it and get back on the attack again. In an exclusive interview with Channel Middle East, CEO Mehdi Amjad outlined how the company is gearing up for a new chapter in its existence.

(29) BY ANDREW SEYMOUR

// CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


Retail and networking are two completely different conduits to the market that require a specialist approach and this is going to be part of our positioning to the market

“The key question for us was about the rationalisation of our resource utilisation and how we as Almasa use our resources in this current market environment to maximise the risk-adjusted returns that we are looking for,” explained Amjad. “And in line with that was the rationalisation of direction — where is distribution going and how are we going to position ourselves for the future?” Staff reductions and the integration of warehouses (a necessity partly driven by the acquisition of Delta Business Products earlier this year) appear to be among the more conspicuous steps that Almasa has taken. Amjad doesn’t say how many employees were let go in total, but it is clear that no part of the

organisation has been spared scrutiny. Various senior roles that were once separate have now been consolidated following a “cross-utilisation and cross-integration” of resources, paving the way for a structure that looks poised to place considerable responsibility into the hands of the VP for finance and operations and the VP for sales and marketing. Sajid Sarwar has already been lured across from Aptec to fill the finance and operations role, while a search is presently underway for a sales and marketing executive. Amjad claims Almasa’s restructuring has already culminated in “some very good results” and put it firmly back on the front foot. He says the company, which made sales in excess of US$400m last year, has halved its costs over the past quarter, while driving gross profit up by 40% as a result of measures that have also included a thorough analysis of its vendor portfolio. Indeed, cost rationalisation represents just a small part of a much wider strategic plan that Almasa is currently implementing. Although it has exited agreements with vendors such as Juniper and ViewSonic during the past year — and doubts have been cast over its alliance with HP — the distributor expects to unveil some significant partnerships this month. “Vendor portfolio rationalisation has been a major part of what we have done,” reflected Amjad. “We will soon be announcing some major vendor tie-ups that will complement our offering for the different sectors that we are focusing on right now. Some good names will be added to the portfolio and they will tie into networking and retail, as well as the channel sector of the market.” Although Almasa has no plans to step away from the components business for which it is best known, the appeal of the finished goods market has prompted it to begin putting a more pronounced focus on the retail and networking channels. “We are going to launch a separate brand identity for our networking and retail departments to really show the market that we are specialists,” revealed Amjad. “Almasa

(30) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_

has been very strong in components and channel development, which we will continue, but retail and networking are two different conduits to the market that require a specialist approach and this will be part of our positioning to the market. Both departments will have their own logo and look and feel. This again amplifies the holistic and specialist approach we take by sector rather than trying to purely generalise the applied distribution phenomenon across the board.” The acquisition of Delta, in particular, has augmented Almasa’s existing retail coverage by giving it access to additional power retailers throughout the Gulf. With the business remaining under the leadership of Delta chief Govinda Siddartha — now a shareholder in Almasa — Amjad is confident that retail sales should account for at least 35% of its turnover come next year. “Delta has been a major step for Almasa and it will contribute heavily to our future strategy,” he commented. “It has already been paying off very nicely by positioning us with all the major retailers across the GCC. Our product is listed in more than 160 stores across the region and we have over 30 people on the sales and marketing side dedicated to the retail market,” he said. Amjad also has his eye on taking Almasa into new geographic markets, notably Africa where he cites a strong opportunity for components sales. “We are looking at developing North Africa first and then going down to Central Africa,” he explained, adding that Almasa has already assigned two Dubaibased sales heads to tackle the region and is presently looking to supplement those with product management resources. Whatever happens though, Almasa’s philosophy will not be to chase sales at all costs. Its rationalisation programme has taught the company that running the business on sound financial principles needs to be its main priority as it moves forward. “This year will be very much focused on the bottom line rather than revenue and that will give other distributors some room to overtake us [in terms of sales],” admitted Amjad. “But the message is strong and clear: we will be heavily pursuing growth around our areas of focus and I think that the rationalisation and the capacity now open for Almasa is a key sign to all the vendors that we are looking at some major tie-ups to deploy our free capacity.” „


: What is your assessment of the IT landscape in the Middle East today? SAMER KARAWI: There is no doubt that the financial crisis imprinted the IT market in the Middle East with its negative effect. The credit crunch, the global slowdown and the liquidity scarcity have created a new set of challenges for the IT decision-makers, as well as resellers and the retail business. The customer today is no longer looking for the best, greatest and trendiest goods. They are more inclined to look for the added value and investment protection. The successful businesses in these troubled times are those who manage to devise plans to provide their customers with more tangible value that answers the customers’ new needs and expectations. : Has the downturn been as dramatic as everyone has suggested? SAMER KARAWI: Despite the cost-cutting and control, maintaining and improving the return on IT investment is at the heart of the business investment and spending strategy of many companies. While we have seen some expansion projects delayed or cancelled, other projects have seen an increase in investment, especially those that are related to consolidation, security, storage and optimisation. Not all cities and countries have been hit equally by the financial crisis. Some places, such as Dubai, Jordan, Egypt, Kuwait, and Bahrain, witnessed various levels of slowdown, but others, such as Saudi Arabia, Abu Dhabi and Qatar, have seen a boost in investments. The net result was a sort of levelling across the region that has left Middle East IT market growth flat.

REVVING UP THE CHANNEL

Having co-founded channel development specialist G&K Consulting last year, Samer Karawi has seen the dynamics of the Middle East market change considerably in the past 12 months. With that in mind, we asked the former Microsoft and HP veteran what it will take before the channel is at full-throttle again.

(32) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_

: Sales and projects are no longer as assured as they used to be due to the downturn. How well has the Middle East channel responded to that? SAMER KARAWI: We all know the famous saying, ‘if you keep doing what you do, you will keep getting what you get.’ That was previously used to signify that with no imagination, creativity and daring, one will never achieve any more than what they have already achieved. Today, one is sure to get much less than what they used to get by doing what they used to. Unfortunately, this is


I believe that it is time for vendors to re-evaluate their strategies and involve their channel in the decision-making process. The roles of each party must be clearly marked and defined what many channels in the region are currently doing by conducting their businesses in the same way they always did and getting modest results that drive frustration, anger and fear. It is not uncommon to see and hear channel people complaining about how badly the market is behaving, and yet when you ask them to tell you what they have done about it many will flip their hands in confusion and look up at the skies in submission to some divine will. Others will tell you how they have reduced their expenses through massive layoffs, cut benefits or shrunk exposure in some geographies or sectors. On the other hand, you will find few creative and progressive channels who will tell you they have looked around, studied the current market, identified the new trends and restructured their business around these new opportunities. : So if you had to give the channel a list of ‘Dos and Don’ts’ at the moment, what would they be? SAMER KARAWI: I’d say to innovate, understand your customer and identify new opportunities, whether it is different customers, markets or solutions. In terms of the ‘don’ts’, doing the same thing but only harder doesn’t work! The situation has changed, buying motives have changed and you have to sell differently too. Don’t drop the prices and then drop them again! Firstly you won’t be able to sustain your business, and after you have closed down you will have managed to spoil it for everyone else. Finally, don’t cut back on the marketing budget and service. Both are probably your only bets of surviving the downturn. : How have you seen vendors in the region respond to the downturn? SAMER KARAWI: Most vendors in the region are, in fact, sales and marketing offices to multinationals. Although they may have certain flexibility to make local decisions, they are, in the main, driven by their corporate policies. And they drive, at best, localised

versions of worldwide programmes and initiatives. We need to keep in mind that vendors are driven by shareholder satisfaction and are subject to market indicators and KPIs. Many vendors are multiplying promotions and discount schemes that are having the effect of driving the prices down and waging a price war in the market. That inevitably will drive down product quality and eat up the margin, forcing the channel to provide lesser services to the customers, which will reduce their satisfaction and trim down their loyalty. The vendor will then have to win those customers again by even further promotions and discounts, and so on and so forth. : That’s not an ideal scenario. What should vendors be doing? SAMER KARAWI: I believe that it is time for vendors to re-evaluate their views and strategies, and involve their channel in the decision-making process. In other words, work with the partners to build a true and unlimited partnership, where everyone is driving toward the same goal and the roles are clearly marked and defined. Objectives should be aligned and each party should be doing what they are best at with no competition between the channel and the vendor. This may mean that some channels need to reduce their product portfolio to the amount of products they can actually focus on and manage to ultimately provide the highest level of service to their customers. : What are the major factors that vendors should consider when it comes to forming a Middle East channel strategy? SAMER KARAWI: Channel strategies should be derived from the customers’ needs and devised to serve those needs in a win-win-win formula: customer-channel-vendor. Unfortunately, the channel in the Middle East continues to rely on the vendors for many aspects and, in most cases, is happy to play the fulfilment role on behalf of the vendor. This strategy can be useful in limiting the channel investment in its own resources and

capacities, but it limits the channel margin to what the vendor is happy to concede, and creates an unhealthy dependency on the vendor and its resources and desires. : Another phenomenon that is common in the Middle East channel — but which can also be limiting — is the focus on a few very large brands, such as Microsoft, HP and Oracle. What is your view on that? SAMER KARAWI: It is prestigious and morally rewarding to be connected with such brilliant names, but from a business perspective I am not sure it always makes sense. The needs of those corporations are very high while the margins — because of the tough competition among the vendors and within the channel — are very low. In addition, the investment in these platforms and equipment puts a great strain on the channel’s finances, preventing it from diversifying its investment and limiting its cash flow. Don’t get me wrong, I am not saying it is wrong to work with big names and great companies, I am saying that it is wrong to be driven by the brand for the sake of the brand name and without a sound business plan that guarantees success and healthy margins. „

(33) BY ANDREW SEYMOUR

// CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


In n as association ass ssoci ss occiiaat oc ati ttiioon n wi wit with ih

TIPPING THE SCALES Over the last few weeks we have asked members of the IT channel to step onto the scales and give their verdict on the health of the Middle East market. Having collated all the results, we can now reveal what kind of shape the Middle East channel community thinks the market is in. In association with

(34) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


In association with

he Middle East channel has gone through a turbulent time since the beginning of the year, leaving the entire IT community to overcome some serious challenges. Exactly how damaging the crisis has been — and more significantly the most pressing issues that are affecting the channel — were two major points that we set out to try and shed more light on with the launch of our 2009 Channel Confidence Survey. The Channel Confidence Survey, which was online during August and September, aimed to gauge the business expectations of the channel and identify the main challenges shaping a sector that has changed dramatically this year. This is the second year that we have run the survey and although the questions were amended to reflect the changing economic conditions, the format remained unchanged: participants simply had to answer 12 multi-

T

choice questions relating to the strength of the market, their outlook for the rest of the year and the priorities for their own businesses. To ensure that every tier of the market had an opportunity to register its opinion, we invited vendors, distributors, resellers, VARs, SIs and retailers to take the survey and give their views on the channel’s growth prospects. The vendor proportion of the survey wasn’t quite as overwhelming this year — 36% of total respondents were vendors compared to 43% last year — which was largely due to more voters from the distribution and second-tier channel communities. Distributors actually accounted for 48% of all participants. Once again, the status of the UAE as a hub for the regional IT landscape shone through, with more than 70% of respondents to the survey based in the country. A further 14% came from elsewhere in the Gulf — mainly

IF TRADING LEVELS IN THE FIRST HALF OF 2009 HAVE BEEN BELOW THE SAME PERIOD LAST YEAR, THEN TO WHAT EXTENT HAVE THEY FALLEN? This time a year ago, a question on the extent to which year-on-year sales had fallen would have been regarded as absurd, such was the certainty of revenue growth in the Middle East IT market. However, the most obvious side-effect of the financial downturn has been that end-user customers have cut back on IT expenditure in a bid to reduce costs — and that scenario is clearly reflected in the results of this question. Only a third of respondents insist they managed to grow or keep sales steady during the first half of the year, while the rest admit that matching last year’s efforts has been impossible. 9% of respondents concede that sales dropped more than 30% during the first half, emphasising the speed and scale at which the downturn has hit, while more than half of respondents confess to seeing sales slow at a rate of anything between 1% and 30%.

Saudi Arabia — with remaining participants hailing from the Levant and North Africa. Over the next few pages you will find a series of charts revealing the outcome of the survey and providing some analysis of the results. In our opinion, it offers a useful indicator of the channel’s confidence and temperament at this point in time, as well as giving some insight into the key business issues that vendors, distributors and resellers are grappling with right now. However, in no way is it positioned as a categorical study of what will and won’t happen in the channel. You may wish to make your own assumptions or draw different conclusions from those we have presented. Either way, we hope you can use the results to see how your views on the market compare with your peers or to get an idea of the general sentiment in the channel at the moment. Happy analysing! „

16%

Between 1% and 10%

17%

Between 11% and 20%

23%

Between 21% and 30%

9%

rGeater than 30% Business has been flat or increased

35%

WHAT IS YOUR MAIN FINANCIAL PRIORITY IN THE SECOND HALF OF THE YEAR? 35% 30% 10%

eGnerating sales Focusing on profitability Improving gross margin eRducing expenses

6% 10% 9%

Better cash flow management Collecting accounts receivables

Sales and profitability — the cornerstones of any balance sheet — remain top of the channel’s agenda during the current climate. With 68% of correspondents admitting that sales during the first half fell below the previous year, it is little surprise that many companies are currently focusing on ramping up their top line. Size and scale is vital in any market and if companies are reluctant to trim expenses then bringing in sales is the only way to keep the business moving. More than a third of respondents confess that growing sales remains their main priority, although they are closely followed by those that think the way forward is to focus on the bottom line. Just 6% of companies say that reducing expenditure is top of their agenda — a figure that could suggest most of the cost-cutting has already been done.

(35) BY ANDREW SEYMOUR

// CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


In association with

WHICH OF THE FOLLOWING ISSUES PRESENT THE GREATEST THREAT TO THE HEALTH OF YOUR BUSINESS?

19%

Lack of visibility in terms of demand

Margin issues always plagued the channel when the market was enjoying double-digit growth so it is hardly unexpected that it remains a pertinent topic in the current climate. Almost a third of respondents insist that the margin pressure they face poses the greatest threat to the health of their business, a worrying verdict given the widespread tactic of using price discounts to stimulate end-user demand these days. 25% say they are concerned about customers delaying paying payments, while 22% reckon that fewer business or project opportunities are casting a cloud over their operations. Just 2% of respondents point to managing expenses as their main worry, which, again, either suggests the bulk of the cost-cutting has already been completed or simply that companies are more anxious about bringing in business than they are about containing expenditure.

29%

rPessure on margins Fewer business or project opportunities Customers delaying payment

22% 25%

Ability to finance the business Ability to manage costs

2%

3%

WHICH OF THE FOLLOWING ISSUES POSE THE GREATEST RISK TO THE HEALTH OF THE OVERALL MARKET?

eRduced credit availability

20% 22% 33%

Delayed payment from customers Decrease in enduser demand Inability to invest in new skills and opportunities

6% 19%

vOer-competition

HOW WOULD YOU ASSESS THE OVERALL FINANCIAL HEALTH OF THE MIDDLE EAST CHANNEL AT PRESENT? We won’t even attempt to guess which sectors of the channel perceive the financial position of the market to be ‘very healthy’, but either they have mastered the secret of prospering in a downturn or have gone into denial mode! Almost half of the participants in last year’s Channel Confidence Survey rated the market as ‘healthy’, but this time around only 20% of those who took the poll agreed. In fact, the pendulum has swung considerably during that time, with a massive 40% of respondents viewing the financial health of the market as ‘unhealthy’ or ‘very unhealthy’ compared with just 12% last year. In defence of those who claim the downturn is exaggerated, 39% of respondents to the survey insist the market is no healthier or unhealthier than usual.

Given a quarter of respondents to the previous question rated a lack of opportunities as the most serious threat to their business, it is no surprise that more than a third of the channel fears that a decrease in end-user demand presents a major hazard for the overall market. Although the Middle East IT sector is, on the whole, growing faster than other regions of the EMEA theatre, there can be no denying that the level of activity has slowed down considerably compared with last year. Overall, the channel remains divided over which issues constitute the biggest threat to the market’s disposition, again illustrating the widespread impact that the downturn has had on the region. A fifth of survey participants believe reduced credit availability — one of the primary causes of the turbulence seen in the channel this year — still presents a major barrier to the market’s hopes of a recovery. Meanwhile, fears of over-competition continue to linger in the channel. 19% of respondents reckon there are still too many providers for the amount of business on offer, although with less end-user demand and credit hard to come by, that situation could change before the end of the year, vindicating those that have long been predicting consolidation in the Middle East channel.

1%

Very healthy 20%

eHalthy No healthier or unhealthier than usual

n Uhealthy

Very unhealthy

39%

36%

4%

(37) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


In association with

WHICH SECTOR OF THE MARKET HAS BEEN MOST AFFECTED BY THE FINANCIAL DOWNTURN? eRtail

35%

SM B

30%

23%

12%

rPivate enterprise

u Pblic sector

This time a year ago, 68% of respondents to the Channel Confidence Survey rated the retail and SMB sectors as the areas containing the strongest growth opportunities. 12 months on and the general consensus in the channel is that those two sectors have been hit hardest by the financial downturn. Consumer spending has been firmly under the spotlight this year, with commentators insisting that end-users are steering clear of high-ticket technology purchases for now. There remains some debate over the strength of the SMB market, but with so many small and medium-sized businesses operating in the market — and IT playing an essential part in their operations — any concerns may prove transient, especially with vendors working to come up with offers that stimulate sales. The results, however, certainly appear to contradict some of the qualitative data available in the market, which suggest the corporate sector has suffered the most from the recession.

WHEN DO YOU EXPECT THE MIDDLE EAST IT MARKET TO REACH THE BOTTOM OF THE DOWNTURN? If the global recession continues well into 2010 then clearly there are going to be some disappointed members of the Middle East IT channel. It seems vendors and their partners in this part of the world are an optimistic bunch, perhaps relying on the theory that as the last region to feel the impact of the downturn, the Middle East is going to be first to emerge the other side. 78% of those who answered our poll reckon that the market has already reached its nadir, or will at least do so by the end of the year, paving the way for business levels to climb back up again. With the fourth quarter expected to bring an upturn in fortunes, they are clearly hoping the momentum will build from there. 22% don’t agree though, believing it will take a year or more before the green shoots of recovery are visible.

It has already reached the bottom

42%

36%

By the end of the year Within the next 12 months

Beyond 2010

15%

7%

WHAT ARE YOUR COMPANY’S HIRING PLANS THIS YEAR?

3%

It wouldn’t be unjust to say the Middle East IT sector is no longer the We are still buoyant recruitment market it once was. People costs — both in terms actively recruiting of bringing new resources in and cutting back on existing ones — will 46% always be the first thing that is scrutinised in a recession. That said, the channel seems to be split down the middle as far as general workforce planning goes. 54% of respondents admit that their human resources u Or recruiting departments are unlikely to be as busy this year, meaning their 51% plans are on hold recruitment plans are either on hold or they intend to cut headcount. On the bright side, this might mean the regional IT market’s long-term skills shortage is finally solved at last! A hearty 46% of respondents, meanwhile, say their organisations are still actively recruiting. Too proud to admit they can’t afford to bring anybody on board or a sign We plan to reduce our workforce that there is still room for expansion in the market? You decide.

(39) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


SEEING THROUGH

THE STORM The days of soaring growth in the Middle East PC market finally look to be over following the persistent stormy conditions that have plagued the sector all year. So how have the leading PC and components brands in the region been coping with the changing circumstances they face? : How would you describe your Middle East strategy and are you having to make any adjustments in response to the changing dynamics of the region?

particular emphasis on the SMB and consumer sectors which are forecast for considerable growth, even during tough economic conditions.

KHALED KAMEL: Lenovo recently redesigned its organisational structure to better align with customer needs, market dynamics and strategic direction with a focus on improving our cost-competitiveness and operational efficiency. The new structure creates two faster, more efficient go-to-market organisations — one focused on mature markets and the other on emerging markets, which is called ‘EMAT’ and stands for the Eastern Europe, Middle East, Africa and Turkey region. Our strategy focuses heavily on developing the channel model for the Middle East by strengthening our distribution network to ensure we’re better enabled to reach the markets. In a tough market, we need to ensure the growth sectors have a particular focus and as such we are placing

KHWAJA SAIFUDDIN: People, partners and products are the ‘three Ps’ for Western Digital. The company strongly believes that a systematic and well-executed channel strategy is vital to increasing both sales and brand awareness for a business. A key element of Western Digital’s business strategy involves having specialised partners in place to address customer storage needs in a more focused and localised way. Our main objectives are to continue to strengthen our reach by expanding our in-country partner network in MEA countries and to focus more on branded products — external portable drives — by educating consumers and SMB customers on the importance of data protection and the differing back-up requirements that they need to be aware of.

(42) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_

NASS NAUTHOA: We have had a solid strategy that entails growing our collaboration with governments and non-private entities in the region through the Intel World Ahead Programme, which uses digital technologies to improve people’s lives and expand their opportunities. On the consumer and enterprise front we continue supporting our MNC and channel partners to grow their markets and cater to the different needs in the markets they operate in. We support the channel by helping partners to bring in the latest technologies and take first-mover advantage in the market. In addition, we continue finetuning our channel partner programmes to help our customers meet demand in the market. Examples of such programmes include our joint marketing Intel Inside Programme and the Intel Flex+ Programme. JOHN COULSTON: In order to be accessible to customers, Dell has sought out collaborative partnerships with distributors, retailers and


We spoke to Khaled Kamel, regional general manager at Lenovo; Khwaja Saifuddin, director sales MEA at Western Digital; Santosh Varghese, regional general manager for the computer systems division at Toshiba; Nass Nauthoa, general manager for the GCC at Intel; and John Coulston, head of marketing for the Middle East at Dell.

VARs. This channel partner strategy model adopted by Dell to sell its products is unlike the direct sales model adopted in more traditional and developed markets, where, for example, online sales purchases are much more popular. This has been our continued — and so far successful — strategy within the region. We continue to refine this approach, choosing the best partners and reducing complexity from the channel structure where possible, whilst expanding and strengthening it. : Has much changed in the way that you have been engaging with the Middle East channel in recent months? KHWAJA SAIFUDDIN: Our interaction with the channel has not changed. We have always had a very close relationship with the channel, a relationship that we will continue to strengthen and develop. The channel is of upmost importance to WD and we will continue to partner with it directly, educate it on the

market and provide it with the necessary tools to make business more profitable. NASS NAUTHOA: We continually look at the ways we engage with our channel, and at the tools and programmes we have available to them. We make changes as needed in order to have an optimal model that makes it easy for our channel customers to meet local demand with our evolving product roadmap. JOHN COULSTON: Dell constantly aims to improve and refine its engagement with the channel. We hold ongoing engagement meetings to ensure we’re adapting and progressing to keep ahead of the competition in our channel approach. We recently introduced the Partner Reward Programme, an initiative designed to recognise the valuable contribution resellers make to the growth of our business. As such, rather than changing the way we engage with the channel, we are looking to provide our partners with

increased support and incentives. Resellers who register with us to participate in the programme are eligible for cash rewards, according to the rebate system we have developed, and the programme is intended to encourage partner loyalty. KHALED KAMEL: Yes, recently Lenovo announced a new programme called ‘Good Idea’ for channel-focused PC partners across the region. The programme provides Lenovo’s local business partners with attractive incentives that support their business objectives. In addition, Lenovo recently appointed a new regional transactional business director to further develop the regional channel and drive enhanced services to customers. Also, a new corporate relationship team for Kuwait, Saudi Arabia, Yemen and Libya has been formed to focus on large enterprise accounts and to support channel partners in servicing customers and providing ongoing support.

(43) BY ANDREW SEYMOUR

// CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


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> Khaled Kamel, Lenovo > Nass Nauthoa, Intel

It is very important for the channel to retain focus, train the sales and technical teams and invest in building the brand as a point of differentiation to deliver relevant solutions to customers : What factors should be considered when it comes to forming Middle East channel strategies? SANTOSH VARGHESE: You have to create value addition and strategies that ensure the channel is able to create its own brand value, rather than just being a box mover or a vendor stockist. At the same time, it is important to be revenue-focused rather than volume-focused. JOHN COULSTON: Understanding the different customer requirements is paramount when forming a channel strategy. Combine this with a good understanding of what makes partners successful — whether they are distributors, integrators or resellers — and you have the initial recipe for a good channel strategy. Some organisations take a top-down approach to their channel strategy, but in this increasingly competitive world listening to all customers will allow you to differentiate. NASS NAUTHOA: From a reseller perspective, one formula for success is to know the market you operate in and your own core competencies. This will help define the

strategies needed to meet customer demand in a chosen segment. It is also important to retain focus, train the sales and technical teams and invest in building the brand as a point of differentiation. As a vendor it is important that we recognise these needs from our channel customers and, as much as is possible, provide them with the relevant tools and resources to help them win and grow the business. KHALED KAMEL: Being a 100% channeloriented vendor, it is important to have a wellplanned channel strategy to ensure a clear and flexible route to market, getting the right product at the right time to the right people. It is vitally important to make sure that the channel is well-educated on the products and delivery models so that they can understand and better sell our products into the appropriate businesses and home users. It is also important to ensure a breadth and depth of channel partners that are suited to the different industries and end-users. : Is there a common mistake that you are seeing the channel make now that market conditions have changed?

NASS NAUTHOA: Maybe it’s not a mistake per se, but the channel could capture more opportunity from services and solutions to increase their bottom line. They could look into expanding their offerings beyond selling standard-assembled PCs and differentiate their products by offering tailored solutions to meet local demand. Offering innovative solutions to customers is the way to keep relevance in the market and grow business. JOHN COULSTON: The balance between reach and homogeneity is critical for IT channels to consider. Whether a customer is a CIO or a consumer, each has their own needs and requirements. And for each it is usually a critical piece of their requirement to have the most appropriate support infrastructure in place. Gone are the days when a consumer or a large organisation is left to fend for themselves to figure out how to deal with their product after purchase. The IT channel in the Middle East needs to step up to this challenge and enable each of their customers to get the best from their technology, and not just on the days or weeks following their purchase. KHALED KAMEL: It is well-documented that the channel in this region experiences a shortage of skilled workers. One reason for this shortage is that today’s IT worker must

(45) // CHANNEL MIDDLE EAST_SEPTEMBER 2009 _www.itp.net_


SANTOSH VARGHESE: The IT channel continues to make the mistake of focusing on volume growth, rather than revenue growth. As a result, they face issues with working capital management, bad debts, overstocking, dead stocks and very high expenses to run the business. It is important not to rush for reckless growth in a slow market. Distributors and channel partners have to reduce DOI across the entire business chain. We are focusing on demand generation and floor sales staff incentives to promote sales out. : The Middle East is regarded as a unique market. But is it now experiencing the same trends as other regions around the globe? KHWAJA SAIFUDDIN: On the whole, corporate sales are on the decline but consumer demand still remains high. The situation, of course, tends to differ between the countries depending on the level of development or reliance on borrowed credit. Storage technology, and in particular external storage, is being employed by everyone. It is no longer a niche product, but an essential IT gadget. Because of the massive adoption of these technologies, consumers are looking for products that are even easier to use, costeffective and highly reliable. SANTOSH VARGHESE: Similar trends can be noticed across the globe. Netbooks have fuelled the growth for the last six months, accounting for over 22% of the market in most places, including certain Middle East markets such as Saudi Arabia. The majority of consumers are buying products which cater to their basic e-mail and web browsing needs. JOHN COULSTON: Organisations worldwide are increasingly scrupulous about what they spend their money on and as such are more carefully considering their investment decisions. Trends that help

> Khwaja Saifuddin, Western Digital

be able to work outside the traditional IT role, taking on a more business-oriented role. As such, this makes hiring and retaining skilled workers much more difficult. The channel could look to take advantage of the vendor training which is regularly available, enabling them to up-skill their workforce in fields such as technical, application and sales training in a cost-effective manner.

The IT channel continues to make the same mistake of focusing on volume growth, rather than revenue growth. As a result, they face issues with working capital management and bad debts organisations get more return from each dollar are as popular in the Middle East as they are anywhere else so technologies such as virtualisation are really coming to the fore now. However, organisations that are taking the smart approach are considering what and how to virtualise. It doesnâ&#x20AC;&#x2122;t always make sense for companies to virtualise their whole infrastructure. Green IT is also a trend that we see impacting global organisations. Whilst the perception remains that environmental concerns are higher on the agenda in more developed markets, it is a notion growing in importance within emerging markets. NASS NAUTHOA: If you look at the EMEA market we see that it contracted in the second quarter, but performed better than expected at -9.8% versus a forecast of -13.5%, according to IDC. The MEA region posted a better-thanexpected result of 3.8% versus -1.9%. The demand held for consumer products, but corporate purchases contracted worldwide. Both SMB and corporate segments suffered double-digit declines due to constrained

budgets and frozen credit lines. In terms of geographies, we noticed that China was the best performer followed by APAC. That can be attributed to the considerable stimulus packages and PC purchasing programmes initiated by governments in those regions. KHALED KAMEL: As with most industries, we have seen a slowdown in the more mature markets, but conversely the emerging markets are still seeing growth and as such helping to balance overall growth. Lenovo has seen incredible results in China â&#x20AC;&#x201D; an emerging market â&#x20AC;&#x201D; by focusing specifically on the channel. We are looking to emulate this success in the Middle East and other emerging markets globally by also executing on a robust, channel-oriented growth strategy. : What about within the Middle East? Are you observing many differences between the various markets? SANTOSH VARGHESE: Market trends across the Middle East are similar. The

(47) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


KHWAJA SAIFUDDIN: The developing or emerging markets are still showing growth in contrast to the developed markets that have started to level out. Government initiatives in certain countries of our region have also really helped local businesses to grow. JOHN COULSTON: The economic challenges faced globally continue to impact the different markets within the region — some in very different ways. The main difference across the region can be noted between the Levant and the GGC. Where the countries of the Levant are much older, the infrastructure is a lot less adaptable to innovations within the field of IT. This is in comparison to the recently developed nations of the GCC, such as the UAE and KSA, which — built in large part over the past decade —

Corporate sales are declining but consumer demand is high. The situation tends to differ between markets depending on the reliance on borrowed credit have had the advantage of building their infrastructure with modern IT systems in mind. Issues such as connectivity, for example, do not present problems within the GCC as they do in the Levant region. NASS NAUTHOA: On the whole, the markets in the region are growing despite the tougher economic climate of late. However, there are always some differences in consumer behaviour and market segmentation. For example, the UAE and Saudi Arabia tend to act like mature markets, mainly in the large cities where vendors have opportunities to sell high-end products, while more entry-level products are prominent in markets like Egypt and Levant. „

> John Coulston, Dell

Kuwait market has been severely affected by the financial crisis though. Technology and quality seems to have taken a back seat. Bargain prices seem to be a major factor given the limited budget that consumers have.

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(49) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


TIME TO SHINE Hold on tight as we bring you a rundown of 50 Dubai-based executives with a major role to play in making sure the Middle East IT channel has a bright future.

(50) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_

// CHANNEL MIDDLE EAST_OCTOBER 2008


or the Middle East channel to emerge from the current difficulties it faces, it is going to need to see leadership, determination and innovation in abundance. With that in mind, we gave ourselves the task of selecting 50 ‘channel champions’ with a major role to play in dragging the channel out of the doldrums and setting it on the path to growth once again. The 50 Dubai-based individuals that you will read about over the coming pages all hold senior positions at either vendors or distributors. That means the decisions and choices they make have a direct impact on the thousands of retailers, resellers and solutions providers operating across the region.

F

If the Middle East channel community is to experience a return to healthier climes then resellers will be looking to these executives and their companies for support, guidance and direction in the months ahead. What these individuals do in terms of stimulating sales, implementing programmes and overseeing partner development activities is certain to influence how quickly — and successfully — the Middle East channel emerges from the downturn. Identifying 50 key faces from the many candidates out there was by no means an easy challenge. How we went about it is explained in more detail below, but it is important to point out that we took the policy of only

selecting one person per company. Many organisations have several executives that equally deserve a place in this list — their good work is in no way overshadowed. There are also likely to be other people from the market that you feel should have been included in the list. The only thing we can say is that charts like this are bound to stir up a bit of controversy, and we are all for that if it leads to good, old-fashioned debate. The truth is that it will take more than just the 50 executives here to wake the Middle East market from its slumber. But as a starting point, the individuals featured over the next few pages have a very significant part to play in shaping the channel’s future. „

THE TOP 50

DAVID POSTEL

EHSAN HASHEMI

Channel Sales Manager Red Hat

COO Golden Systems Middle East

50

Whichever way you look at it, open source solutions are gaining momentum among the Middle East channel and Postel’s arrival in the region this year is recognition of that. His role of recruiting, supporting and monitoring the sales of Red Hat partners is likely to make him an increasingly important channel face.

49

Golden Systems joined the ranks of Jebli Ali-based distributors earlier this year by moving to expanded premises in the Free Zone and customers are now benefitting from the fact that all of its operations are under one roof. As COO, Hashemi has put a strong emphasis on improving customer service levels.

Selecting 0 5 executives from a market as diverse as the iM ddle aEst will always be driven by a degree of subjectivity. That said, we have attempted to do it as systematically as possible through a mixture of interviews with second-tier partners, qualitative research and hours of editorial debate. The challenge was to assess the ‘influence’ that each individual and their organisation has over the channel. Naturally, the actions and decisions made by larger distributors with broader portfolios affect a greater portion of the channel than a distie of just one brand. The same goes for vendors. Additionally, we have considered factors such as channel commitment, investment and visibility.

AMAN MANZOOR

JAFER JAFERY

JENICE BHATIA

Channel Manager Kaspersky

Managing Director ITE Distribution

Channel Manager McAfee

48

Kaspersky is now bidding to give some of its more established rivals a run for their money in the Middle East and Manzoor has a pivotal role to play in that task as Kaspersky’s local channel chief. His job will be to put formal channel policies in place and ensure that Kaspersky is listening to the needs of its partners.

47

An already impressive retail portfolio was further strengthened a few months ago with the addition of a Microsoft peripherals and software contract. Jafery has ensured that ITE - a strategic regional partner for Palm - has remained on the growth path by providing high levels of support to the channel.

46

The appointment of regional director of channels Daan Hakkert has led to McAfee putting a firm emphasis on educating and certifying partners. He has also begun replenishing McAfee’s channel resources, which has included bringing in the experienced Bhatia from Trend Micro to handle reseller alliances.

(51) // CHANNEL MIDDLE EAST_OCTOBER 2009 2008 _www.itp.net_


ARUN CHAWLA

AHMAD QASEM

FAISAL JAMAL

COO Trigon

General Manager Al Yousuf Digital

COO Despec

45

Trigon has been operative in the market for more than a decade and in that time it has constructed a compelling retailand trade-focused product portfolio. Much of that is down to the management of Chawla, who has assembled a 70-strong team and always maintained a firm eye on driving customer loyalty.

44

It is little surprise that Al Yousuf remains an influential distributor in the Middle East channel when you consider the wide portfolio of printers, displays and networking products it carries. Qasem has made it a priority to develop a solution-driven vendor basket in a bid to deliver more value to VARs in the region.

43

Supplies and consumables are the lifeblood of the printer channel and Despec offers them in abundance courtesy of tie-ups with leading vendors such as HP, Canon and Lexmark. Under Jamal’s watch, Despec has increased its regional presence and shown itself to be a highly efficient distribution house.

DJILLALI LAHIANI

KS PARAG

YVES MATTA

Regional Channel Partner Manager Lenovo

Managing Director FVC

Sales Director Fujitsu Technology Solutions

42

Lahiani followed regional chief Khaled Kamel from HP to Lenovo last year with a brief to drive sales and build growth opportunities in the SMB segment. His extensive experience of the EMEA channel will be a vital asset for Lenovo as it seeks to climb up the Middle East PC rankings and boost partner profitability.

41

The opening of new offices in Abu Dhabi and Riyadh during the past year, as well the addition of a training centre in Cairo, has increased FVC’s local touch under the stewardship of Parag. Partnerships with fast-emerging software vendors have allowed FVC to enhance its value-add and help resellers open up new markets.

40

Along with Samer Sayed, who looks after non-UAE partners, Matta oversees Fujitu’s local distribution and reseller affairs. His focus centres on driving profitability and ensuring the PC vendor has the partner capacity to make the most of hardware and services opportunities in the enterprise sector.

ADNAN AL-FALAH

ROGER EL-TAWIL

SUSHMA KAJARIA

Chairman SIT Distribution

Channel & Marketing Director Avaya

Channel Development Manager Trend Micro

39

Former Tech Data Middle East boss Al-Falah is now pulling the strings at SIT, which has steadily emerged as a leading pan-regional retail distributor for vendors such as Microsoft and HTC. With a 100% trade-only focus, SIT has built a business that is closely tuned in to the unique needs of its channel customers.

38

Avaya relies on the channel much more in the Middle East than it does in other regions and that is reflected in the quality of partner initiatives that it has rolled out locally. El-Tawil is responsible for ensuring the IP telephony vendor is working with its partners to address the latest communications opportunities.

37

Another channel chief with experience of working in the distribution sector – she previously ran Online’s security unit – Kajaria is now using her skills to nurture Trend Micro’s partner base. A clear and consistent channel strategy will be seen as vital for VARs doing battle in the ultracompetitive antivirus software market.

(55) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


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HAVIER HADDAD

BIKAS BISWAS

BERTIL WIDMARK

Channel Sales Manager EMC

General Manager Jumbo IT Distribution

Managing Director Canon

36

EMC’s Velocity Partner Programme has gained huge credibility in the channel and provided the vendor with an ideal platform to grow its VAR base. Haddad is focused on developing the channel landscape further by ensuring the vendor has the adequate level of geographic, technology and vertical coverage.

35

Although often seen to be in the shadow of its retail parent of the same name, Jumbo’s distribution business has grown to amass sales of US$300m a year under Biswas’ leadership. Its policy of focusing on a few key consumer brands, including HP and LG, has led it to form relationships with all the major retailers.

34

Its huge portfolio of printers and electronics makes Canon an influential vendor in the reseller community. Overall channel strategy decisions are taken by Widmark, but consumer imaging chief Anurag Agarwal and business solutions head Naoshi Yamada are also important members of Canon’s senior team.

THIERRY CHAMAYOU

LEE REYNOLDS

KHALIL EL-DALU

Regional Channel Manager APC by Schneider Electric

Managing Director Computerlinks

General Manager Epson

33

With vast experience of channel dynamics from his time at distributor Mindware, Chamayou has proved a vital addition to the UPS vendor’s channel team. Earlier this year he oversaw the regional launch of APC’s new channel programme, designed to provide VARs with access to key sales mechanisms.

32

Along with counterpart Tim Martin, Reynolds has turned Computerlinks formerly Fusion Distribution - into a formidable security distribution outfit. With the backing of its German parent behind it, the firm has built on EMEA alliances with key vendors and enhanced its reputation as a services-focused outfit.

31

Epson has a strong channel pedigree in the Middle East thanks to a focus on both the consumer and corporate markets. With Scott Leach working alongside El-Dalu to handle distribution and channel partners, and Khurram Iftikhar handling retail, Epson knows what it takes to drive indirect sales.

TONY WARD

HOUSSAM MOBIED

RAMI AL SALEH

CEO Tech Access

CEO Empa, MTC, E-Retail

Channel Sales Manager AMD

30

Although best known as Sun’s foremost distribution partner in the region, Tech Access has gradually been adding more value to its vendor basket and that is a policy Ward looks set to continue. Building a stronger business in KSA is also high on the former Hitachi Data Systems chief’s list of priorities this year.

29

Working closely with Empa president Rahb Hamidaddin, Mobied has helped mould the distributor and its affiliated companies into respected IT suppliers. With a portfolio that encompasses CPUs, hard drives and finished retail products, the companies that Mobied manages cover a high quota of the MEA channel.

28

Al Saleh was recently recruited by regional chief Gaith Kadir to run AMD’s partner activities, but he’s a familiar face to the channel having previously worked for Microsoft’s OEM team. His new role will involve strengthening relationships with partners and distributors in the region, as well as plotting sales strategy.

(57) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


Middle East Distributor

For further information contact: Bulwark Technologies LLC Tel: +971 4 3341002 www.bulwark.biz sales@bulwark.biz


MADHAV NARAYAN

Girish Kewalramani

AYMAN EL AJOUZ

General Manager IT Division Samsung

Director of Components FDC

Channel Manager Seagate

27

Once a key figure at Redington, Narayan has now turned his understanding of the channel to Samsung’s advantage. If overseeing a portfolio of HDDs, optical drives, printers and displays wasn’t enough, Narayan has been instrumental in kickstarting the vendor’s notebook business in the UAE, KSA and Kuwait.

26

Although it has developed its finished goods portfolio after hiring ex-Almasa chief Vijendra Singh earlier this year, FDC is best known as a components supplier, and a highly influential one at that. Kewalramani has more than a decade of channel experience and is therefore an important figure in the components trade.

25

Despite only joining Seagate at the start of this month, El Ajouz clearly has a key role to play in driving the vendor’s sales from Dubai. Partners will welcome the arrival of a local manager to provide support, and having built up substantial knowledge of the channel from his time at i2, big things will be expected of him.

ELIAS ABOU-RUSTOM

SANTOSH VARGHESE

KHWAJA SAIFUDDIN

General Manager Arab Business Machine (ABM)

Regional General Manager Toshiba

Sales Director Western Digital

24

Its iPod-inspired revival continues to make Apple’s technology a sought-after commodity in the global market and it’s no different in the Middle East. Apple kit remains hugely popular in the retail and SMB markets, making Abou-Rustom and ABM – the Middle East agent for Apple products – significant players.

23

Toshiba has a strong Middle East track record under Varghese, who has worked to develop the company’s channel team in the GCC and reinforce its status as a leading mobile PC provider. Toshiba has implemented some compelling shop floor sales incentives that will be crucial for driving demand in the months ahead.

22

The rapid growth of the external hard drive market means Western Digital is no longer just a name associated with PC makers, but an important supplier to the SMB and retail channels as well. Saifuddin is a veteran of the HDD space and has made it a priority to keep channel profitability high on the agenda.

STEVE LOCKIE

BRUNO HAUBERTIN

TAJ EL-KHAYAT

Managing Director Westcon Group

Partner Sales Organisation Manager Sun Microsystems

Head of Channels Juniper

21

As head of the Cisco-focused Comstor division and the former Online business, Lockie calls the shots for one of the most powerful networking and convergence outfits in the game. As well as bringing several major Westcon programmes to the region, Lockie has extensive channel experience from his tenure at Tech Data.

20

Its impending takeover by Oracle means the future direction of Sun’s traditional channel remains a little uncertain. For now, however, resellers can expect the vendor to maintain its partner-centric strategy. Led by Haubertin, Sun has made major strides in terms of rewarding loyalty and driving higher-margin sales.

19

Juniper has emerged as a real channelfriendly outfit since El-Khayat came in, introducing compelling sales initiatives and providing partners with the tools they need to make a dent in their main rival’s market share. Juniper partners will hope to see more of this pro-activeness as they navigate through the current conditions.

(59) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


JACQUES CHAMMAS

AMER HUSAINI

HESHAM TANTAWI

Managing Director Mindware

VP & General Manager Consumer Sales Dell

Vice-President Asbis

18

Mindware has run a pretty tight ship under the captaincy of Chammas, who has shown it is possible to balance a volume and value model in distribution. Its Intel franchise gives Mindware a solid source of revenue, but the firm continues to operate an impressive networking, security and software business as well.

17

Along with VP emerging markets for commercial products Michael Collins, Husaini has a key role to play in forming Dell’s Middle East channel strategy. The widening of its distribution chain means the PC vendor now touches more second-tier partners than ever before and boasts a solid SMB-focused offering.

16

The once components-only distributor has diversified its offering to include finished kit from brands as distinguished as Dell and Toshiba. As a result, Asbis has moved rapidly up the regional distribution ladder. Under Tantawi’s guidance, MEA sales rose to US$41m in Q2 - the only Asbis division to grow.

MEHDI AMJAD

MOURAD ZOHNY

HISHAM ESAADI

CEO Almasa

Business Partners Organisation Manager IBM

Director Alliances & Channels Oracle

15

As one of the largest distributors in the Middle East, Almasa exerts significant influence over the channel, particularly in the components space. Amjad has taken a more hands-on role in the distribution business this year, restructuring it for future growth and overseeing the acquisition of Delta to drive retail sales.

14

Zohny remains one of the longest-serving channel managers in the game so it is no surprise that IBM presides over a highly consistent and organised partner network. Given the relationships it enjoys with distributors, VARs, ISVs and services companies, IBM boasts the reach to influence the entire channel ecosystem.

13

A channel executive with bags of experience in partner affairs, Esaadi has helped Oracle cultivate an extensive ISV network. The forthcoming launch of new business and middleware suites means there is plenty to keep Oracle partners occupied, and Esaadi will be keen to ensure sales opportunities are exploited.

RAMZI ITANI

ALI BAGHDADI

SVEN BECKMANN

Regional Channel & Alliance Manager Symantec

CEO & President Aptec

Sales Director Intel

12

Any resellers that attended Symantec’s recent MENA Partner Summit will have heard regional chief Johnny Karam reiterate its partner-centric message. Itani will be in charge of driving channel enablement and specialisation after replacing Katie Spurgeon, who now heads MessageLabs’ EMEA channel.

11

Aptec remains a prominent name in distribution, shifting its business to more of a value-added model in recent times. Under Baghdadi’s leadership, Aptec has gained regional coverage, picked up several former Tech Data franchises and inked a deal that saw DIFC Investments become its majority shareholder last year.

10

With GCC channel chief Nass Nauthoa taking over the general manager’s post, Beckmann is the individual charged with overseeing Intel’s partner activities. Having previously led Intel’s reseller business in South Africa, he is no stranger to the type of sales dynamics that keep the CPU channel moving.

(61) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


YASER SHAN

NICHOLAS ARGYRIDES

AMER KHREINO

Channel Marketing Manager Acer

General Manager Logicom

CEO Emitac Distribution

9

Acer’s coverage of the Middle East market has rapidly expanded in recent years, and Shan has been one of the main architects of that by overseeing the implementation of key sales tools. The addition of ‘executive’ partners in recent times means Acer’s influence extends to retail, SMB and corporate channels.

8

Distribution agreements with HP and APC have catapulted Logicom into the big league this year by shoring up an already comprehensive portfolio. Don’t forget, the company is already an Intel, Cisco and Microsoft player. Argyrides has skilfully managed Logicom’s UAE growth, turning it into a potent distribution force.

7

Khreino is one of the foremost reasons why Emitac has progressed to become one of the largest distributors in the Middle East. He has grown the firm’s core HP business, while also cementing partnerships with other leading vendors. A recent alliance with Lebanese outfit Distinet illustrates its regional ambitions.

ADRIAN TAYLOR

NY PRASAD

MARK KOTZE

Regional Channel Manager Cisco

Managing Director Metra

Head of Retail Nokia

6

Local personnel changes have meant life has been far from quiet at Cisco’s HQ this year, but that hasn’t prevented the networking vendor from maintaining its channel-centric values. Taylor’s sales experience and the company’s muchrespected channel partner programme hold the key to reseller satisfaction.

5

Having joined Metra earlier this year from Ingram Micro, where he held several senior roles, Prasad understands the kind of operational efficiencies required to succeed in broadline distribution. His arrival has coincided with Metra fortifying its HP relationship and taking a more organised approach to serving the GCC.

4

Having previously worked at Saudi-based Fawaz Alhokair prior to joining Nokia three years ago, Kotze is well aware of what makes regional consumers tick. His expertise will be needed to keep partners on the right growth track and ensure the handset vendor’s dominance of so-called ‘emerging markets’ goes unchallenged.

ZAID ABUNUWAR

RAJ SHANKAR

BERNHARD ISEMANN

Small & Medium Solutions & Partners Director Microsoft

CEO Redington Gulf

Solutions Partner Organisation Manager Hewlett-Packard

3

Boasting two decades of experience in the channel, Abunuwar is the face that Microsoft’s Middle East partners know best. The imminent launch of Windows 7 makes this a key period for the software giant and Abunuwar’s knowledge of the corporate landscape will be pivotal to helping partners snare new business.

2

Redington’s sheer size and scale means there aren’t many IT resellers out there that don’t come into contact with the US$1 billion-a-year distributor. Shankar has led the way as Redington has inked franchises with brands such as Nokia, HP and Samsung, laying down a strong in-country infrastructure in the process.

1

The channel development programmes that HP implements in the Middle East have a massive impact on the fate of thousands of resellers selling its kit. Isemann heads the SPO team and plays a pivotal role in shaping the channel’s fortunes alongside PSG chief Anil Kumar and IPG manager Amin Mortazavi.

(63) // CHANNEL MIDDLE EAST_OCTOBER 2009 _www.itp.net_


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_www.itp.net_

EXPERT’S VIEW (64) // TOP TIPS FROM MASTERS OF THE CHANNEL

CASH FLOW COUNTS Good financial management can mean the difference between success and survival in the current uncertain climate, as Guy Whitcroft, principal consultant at CapitalSteps and a 30-year veteran of the IT industry, explains. Guy Whitcroft says that focusing on margin at the expense of cash flow can cause companies to run into financial trouble.

I

n these difficult times it seems appropriate to revisit one of the biggest causes of problems in a business. Something like 8 0% of business failures are not due to losses, but due to a lack of cash flow. Q uite simply, the business doesn’t have the cash to pay its creditors, even though it is profitable on paper. H owever, most businesses seem to focus primarily on margin, ignoring cash flow until they hit a serious problem with their creditors, by which time it is often too late. So, what are some of the main problem areas with cash flow and what can be done about them?

Keep on top of your debtors Debtors — or accounts receivable — is probably the most the obvious area, and one with a quick return. The fact is that reducing your DSO(days sales outstanding)or debtors’ book by just four days overall can have a dramatic effect on your business. For a business doing U S$ 20m a year, this can be worth an extra U S$ 220,000

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in free cash flow — it’s like having an extra 1% margin in your business. The key here is to find ways to ensure prompt, or even early, settlement of invoices. By sending statements to customers in the middle of the month and having credit control call them to go through any queries, many common excuses for late payment can be removed — and your credit control department can spread its workload more effectively. Furthermore, putting the credit control team on commission and having sales people’s commissions partly dependent on prompt payment by their customers, with both being tied to proper provisions policies, will also help.

Don’t delay payments Now let’s consider creditors and accounts payable. The first thing that many companies do when they run into cash flow problems is to start delaying payments — and they generally do so without consulting their suppliers. While it might seem a logical approach, this is one of the worst things

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to do. Delayed payments make suppliers nervous and can often result in decreased credit limits for the company, which tightens cash flow even more. What’s more, if the suppliers report the delays to credit insurers (as they are obliged to do if insuring your debt), banks and other suppliers will start turning on the screws too by tightening credit and recalling loans, for example. In an ideal world, the credit limit with each supplier should be a company’s average monthly trading volume plus 5 0%, multiplied by the number of months of credit that it gets (e.g days/30). So, for example, a company doing U S$ 1m a month with a supplier that gets 4 5days credit should have a credit limit of U S$ 2.25 m (U S$ 1m + U S$ 5 00,000 x 1.5 )to safely cover the peaks and troughs of business. R educing this throttles the business and often means having to pay cash for an extra big order — and those orders are often at reduced margin anyway. If the company does run into temporary cash flow problems,


// CHANNEL MIDDLE EAST_OCTOBER 2009

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working with the bank and the suppliers through the difficulty that it faces in a proactive way will ensure maximum credibility and minimum difficulty for the company. What’s more, many suppliers offer extremely attractive discounts — far better than the costs of borrowing money from the banks — for early settlement and the companies that take advantage of these can add appreciably to their bottom line. Working with the bank and shareholders to ensure adequate working capital to take advantage of such discounts can add another percent, or more, to the bottom line, even after taking the costs of this money into account.

Avoid the inventory mistake Inventory levels are the key to a successful technology business. In fact, more money is lost on inventory than any other single area of a typical technology business. Too little means lost sales. Too much means lost profit through both the financial costs of keeping excess inventory and the likely reduced margins the business will have to take to clear it. What’s more, extra inventory means more storage space, higher insurance premiums, and so on. Bearing in mind that C Ps have little more shelf-life than many foodstuffs — such is the pace of

change — that great additional % 5 price break which is offered for taking three months’ inventory at once will end up costing the business money. It’s essential to ensure tight controls are in place to manage ordering. Look closely at sellout per week over the past few months to see the trends. E nsure inventory in excess of normal levels cannot be ordered without proper justification, especially when it comes to great offers for large volume orders. And look especially critically at new product lines and models, as this is often where some of the biggest mistakes are made. Just as importantly, an aggressive provisions policy must be put in place to keep the inventory moving quickly and tied, with overall inventory levels, to commissions for the product and general business management to keep the focus on inventory control.

Think twice about cost cuts There are, of course, many other areas where cash can be conserved, but the ones outlined above are the more important ones for all businesses. O verall, pay systems should be in place that reward (and penalise)all staff — including top management — for the areas they have control over, as this maintains focus.

>>

The first thing that many companies do when they run into cash flow problems is to start delaying payments — often without consulting their suppliers. While it might seem a logical approach, this is one of the worst things to do O ne last point to consider — be careful when deciding, as many businesses do, to cut marketing and training expenditure. Although it can result in a quick improvement to cash flow, history shows that companies that maintain their marketing presence and

keep upgrading the skills of their staff in downturns emerge more quickly and more strongly when the market starts to turn up. Downturns are actually the best time to strengthen market presence and skills — and what’s more this can generally be done more cost-effectively. „

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Become a MEEZA Value Added Reseller and share the rewards of success Add Value. Share Rewards. As one of the fastest growing IT companies in the region, MEEZA is seeking to partner with companies that are as dedicated and passionate about delivering the IT advantage as we are. Based in Qatar, MEEZA is a Managed IT Services and Solutions provider that is set to become an industry leader. We have made significant investments in IT infrastructure that will make us uniquely placed to offer Cloud Services across the region.

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EXPERT’S VIEW (67) // TOP TIPS FROM MASTERS OF THE CHANNEL

HIDDEN STORAGE MARGINS In a special guest column, Vince Blackall, EMEA channel director at data protection software specialist CommVault, explains how deduplication can drive sustainable sales for the storage channel.

Vince Blackall says deduplication can help resellers solve customers’ compliance and investment needs.

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n part, the market for deduplication is being driven by the sheer amount of digital information being created, which last year grew 3% faster — or 16 million gigabytes more — than prior projections. IDC estimates that by 2012 there could be five times as much digital information being created than there is today. But while times remain tough and IT budgets continue to be stretched further than before, the adoption of new technologies isn’t high on priority lists. Instead, the short-term focus is falling on the channel to prove the value of any proposed technologies as customers want to be sure of maximising any investments. With eDiscovery, compliance and SLA requirements still driving data storage requirements up, there really couldn’t be a better time for channel partners to be confidently positioning deduplication as the solution that reduces storage pressures. For those that aren’t already familiar with the concept, data deduplication, or intelligent compression, is a method of reducing storage by eliminating redundant data and works by

>>

retaining one unique instance of the data on either a disk or tape. The benefits of this are instant cost-effective scaling and system performance improvements across the entire data management infrastructure. In the face of rising power and cooling requirements alongside escalating data growth rates, deduplication also offers a game-changing advantage for resellers whose customers are asking with help to reduce the footprint of long-term vaulting or compliance copies. The compressed state of the deduplicated data can be migrated to tiers of cheaper storage for longer retention needs, enabling resellers to then offer a service that reduces storage space dedicated to back-up and archive, on both disk and tape, by up to 90%. Another business benefit of dedupe is that out-of-control storage costs, and slow throughput on backup and archiving systems, can be addressed. Lengthy recovery times, a common issue when archived data stored outside the primary back-up media is involved, also offer opportunities for the reseller to sell here.

So, as a solution, software dedupe embraces tape infrastructure and disk tiers and, as a more efficient utilisation of a customer’s secondary storage infrastructure, can eliminate incremental storage purchases for back-up and archive for anywhere up to a year. Interestingly, whilst CommVault anticipates the adoption of deduplication eliminating incremental tape drive purchases by anything up to six months, we expect to see deduplication continuing to drive tape sales in the long-term. In this scenario, even the cost of incremental tapes is a small price to pay when compared with the operational efficiencies that such an end-to-end approach would bring — from faster network data transfers and shorter back-up windows to improved recoveries, which all translate into cost savings that resellers can then deliver to customers. Not only does this give the reseller two big ticks in the boxes marked ‘compliance’ and ‘demonstrable return on investment’ but it would also be difficult for them to find a customer that doesn’t find this to be a compelling offering. „

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FRAYED RELATIONS If the economic downturn has blown a frosty wind into every relationship throughout the IT channel in the Middle East during the last 12 months, nowhere has it been felt more acutely than in the always-sensitive affair between distributors and credit insurers.

year ago, many distributors were well on the way to being convinced that insurers did have a role to play in keeping the channel’s credit lines well-oiled and shoring them up against unpredictable risk. But recession has shifted the dynamics of the relationship yet again. The rise in reseller insolvencies and trading conditions that change on a daily basis have driven both sides to take a long, hard look at their priorities. For the credit insurers, the IT channel is an altogether more fragile proposition, leading to accusations from distributors of pulled credit cover, hiked premiums and reduced coverage; and for distributors, credit insurance looks like an expensive option that may not even provide the protection they need so badly. The picture is complex. In the same breath, credit insurers will acknowledge their caution while insisting that interest in their services from the channel has never been higher and

A

that their market intelligence is vastly improved. And distributors will lament inconsistent coverage and high costs while — albeit grudgingly — acknowledging that credit insurers have had a positive effect in bringing discipline and order to a channel that has often seemed to depend far too much on the secrecy of its financial relationships. “In my opinion, trading conditions have tightened up due to the erosion of credit in the IT channel,” said Leroy Almeida, business development manager at Dubaibased Al Mulla Atradius Insurance Consultancy and Brokerage. “This was due to the major deterioration in the financial and economic situation worldwide, and contagion risk from the construction sector that impacted on the IT channel. The increasing number of reported payment defaults from the beginning of this year has eroded credit, and insurers are cautious. And recoveries are extremely

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> Mahan Bolourchi, Euler Hermes

difficult as the majority of defaulting buyers tend to abscond from the country.” Mahan Bolourchi, head of risk management GCC Euler Hermes, says trading history is no longer a reliable guide to a company’s present creditworthiness. But on a positive note, the number of companies in the region now prepared to share financial data with their credit insurers has increased “dramatically”, helping to improve intelligence in the market. “We have had to increase our resources in the region to deal with the unrivalled demand for our product and we now have a team of 27 in the GCC,” he revealed. “However, we have not changed our underwriting approach in the market. Our job is still the same: we collect and analyse financial data and provide credit management advice and insurance to our clients. Our role remains to ensure business transactions are possible. “We still use our local team to seek information from buyers to enable us to offer cover and we are geared up locally to give every company an opportunity to prove they are creditworthy. We are stressing to the sector and banks the vital role credit insurance plays in the economy. In the same way a buyer would not expect their bank to extend them credit without providing them with financial data, we take the same approach.” That sounds reasonable enough, but some distributors accuse credit insurers of unreasonably extending that caution to established customers. Jaison Korath, financial controller at Despec Mera, would like to see more pragmatism, and risk assessment on a case-by-case basis, for example. “Credit insurers took a U-turn during the past year and I personally think the reaction to the market situation was out of proportion,” he said. “They were cutting the credit limits for even traditional customers, which has resulted in scaling down the business.” Steve Lockie, group managing director at Westcon, says political changes in the region have not helped the situation either, the reluctance of insurers to cover risk in key markets such as Pakistan being a particular challenge, for example. Overall, he describes the response of credit insurers to the shifting financial climate as “a really mixed bag”. “We have been fortunate to have a good dialogue and credit history with our partners and although impacted, we have managed to mitigate most risks,” he said. “Some insurers

Unfortunately, where we have no data, it is impossible in this climate to maintain high levels of cover have completely closed to new business, some have cut lines arbitrarily, some have been more targeted; we have seen a huge variety of actions.” Lockie would like credit insurers to communicate far more effectively with resellers, identifying how they work, and why they need to file audited accounts. And he would like to see fewer arbitrary decisions in revoking credit lines. “I feel a recognition of extended payment terms for government projects also needs to be taken into account, in developing the terms and conditions of insured business,” he said. “They [credit insurers] should also spend more time with the distributors, as we have been managing risk in these markets far longer and in a far better manner than any insurer has.” Such stinging criticism is not reflected across the entire distribution community in the region. Amer Khreino, general manager at Emitac, for example, says his company’s credit insurer has kept the business informed with market updates and outlooks. “Our full transparency, co-operation, close market

proximity and competences in managing channel credit and business have impacted on our relationship with our credit insurer positively and stimulated its appetite to place higher investment with us,” he said. Khreino suggests that both sides will benefit from having to prove themselves in such difficult economic times, and that credit insurers will profit from higher visibility on the market landscape in the Middle East. He does, however, join the clamour for credit insurers to place higher investment in market intelligence, underwriters and coverage in an industry that is still growing — a position that also resonates with Korath at Despec Mera. He says Despec Mera’s insurer has “supported us to a satisfactory level” but overall, insurers are too quick to treat the entire market the same and fail to take individual circumstances into account. “I think there is a possibility that credit insurers can play a greater role in the distribution sector,” he said. “Credit insurance has created some level of discipline in the market. Customers audit the books and respect the payment terms, so it’s a

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wonderful tool for establishing a clear channel of business. “But to know this market, it is very important to understand the dynamics and customers. It is not just reading the financials, but knowing their way of operation. I would like to see them looking at each customer more personally. And be more interactive about developments on the database. It may be better to have some kind of alert rather than chopping limits over night — which creates a nightmare for the business plan!” Westcon’s Lockie would second that. After promising so much, he suggests, credit insurers have been too quick to adjust their coverage in response to the deteriorating financial climate — and this has compromised the value of credit insurance as a business tool. “Initial limits and safety nets were much higher than we had traditionally been willing to offer and I feel this was as much down to poor intelligence from the credit insurers as it was to prudent risk management from ourselves,” he said. “We now find key territories where we have to self-insure, use

other financial tools or simply not [provide a] service due to these changes. It is simply impossible to find any single insurer with a risk profile and appetite that covers our region entirely, even given our conservative business and risk profile.” Almeida and Bolourchi both insist that despite the rise in premium costs — the inevitable consequence of a rocky market, which will reverse when conditions improve — their organisations are retaining clients and generating new business in the IT distribution sector. Not all distributors share Westcon’s capacity for self-insurance. “There is no guarantee in this environment or even in a favourable market environment that buyers with strong performances in previous years will not fail; the market has already seen evidence of this,” said Almeida. “Alternatively, even if a distributor’s credit management team has done an excellent job, buyers can still go bust. Since margins are low in the IT sector, even a single large loss can put a seller into financial difficulties. Some distributors who had signed up for credit insurance have already witnessed the

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> Jaison Korath, Despec Mera

> Leroy Almeida, Al Mulla Atradius Insurance

It is simply impossible to find any single credit insurer with a risk profile and appetite that covers our region entirely, even given our conservative business and risk profile

value behind this service and mitigated their credit losses,” he said. “We are looking for transparency from the buyers,” explained Bolourchi. “They are aware that if we have financial information and understanding of their business, we will be more likely to be able to approve credit for their suppliers. We are finding that they are willing to be transparent with us and trust us with the financial information they provide. Unfortunately, where we have no data, it is impossible in this climate to maintain high levels of cover.” And in the end, all roads seem to lead back to transparency. If credit insurers can raise their intelligence levels as high as possible, their response to individual clients can be more considered and — as distributors agree — they can consolidate their role as key players in the regional IT channel model. “I am confident they will play a great role,” said Khreino at Emitac. “It won’t be a free ride, though. Credit insurers must learn from this past period to define attractive packages for distributors and understand their industry in order to drive mutually profitable businesses in the future. Premiums will continue to be crucial in deciding whether or not to buy a policy. So I don’t advise them to take the easy route of jacking the premium up to justify higher credit coverage.” „


R E H H IG N O I T A E DU C pirations of reseller with as y an r fo l ta en e g is fundam hy vendors in th d type of trainin ly — which is w er op pr The right level an s s. er ie lic om g po rvicing their cust r channel trainin selling to and se attention to thei r te ea gr ng yi now pa Middle East are

ood quality training is the lifeblood of any vendor’s partner programme. At the very least, the reseller enhances its pedigree in the market by ensuring that its sales people and engineers are steeped in specific product and technology capabilities — with skills refreshed on a regular basis. And for the vendor, training is a vehicle for encouraging resellers to become value-added extensions of its own sales operation, delivering product expertise and consolidating brand reputation in the field. But the benefits of a successful training programme penetrate even deeper on both

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sides of the relationship, as Taj El-Khayat, head of channels at Juniper Networks, explains. “A trained channel makes a huge difference,” he insisted. “By segmenting the training programmes to different tiers within your channel, you can give the right focus, level of information and tools that fit the channel’s business model. “A one-size-fits-all model does not work. We’re a channel-driven organisation and it is key to have a well-trained channel in order to continue to grow and win more customers and, more importantly, to enable partners to be uniquely competitive and achieve the aspired-to profitability.”

Like Juniper, many vendors in the Middle East now adopt a university-style approach to channel education, raising the kudos of brand-specific qualifications. Juniper’s J-Partner Academy, for example, is a modular programme for tier-one partners, designed to turn salespeople from product specialists to complete solution specialists, strengthened by technology excellence. Tier-two and -three partners benefit from the J-Partner Empower Programme, delivered via the vendor’s authorised distribution network, which offers a monthly one-day session and drills new recruits in the vendor and its products, culminating in

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sales training. There are also ‘Quick Start’ one-day technical workshops focusing on the UTM space. These programmes are underpinned by the six-monthly J-University event, designed to update the channel, raise awareness and boost education across the partner portfolio. Variations on this model abound across the vendor community in the region, while e-learning formats remain popular and effective for self-paced training, traditional classroom delivery continues to fulfil demand for hands-on experience. And this variety is supplemented by a range of live web training options, workshops, update modules and onsite assistance. Reseller training requirements are so diverse that vendors are driven to provide ever more sophisticated training models that take cyclical and seasonal influences into account without compromising the reseller’s precious time at the sharp end of sales. Training programmes are also often incentivised to maintain motivation. “Our depth training is spread throughout the year

on a quarterly basis, focusing on specific topics and segments per quarter,” said El-Khayat. “We try to leverage three to four days per quarter, where we ensure that the

A one-size-fits-all model does not work. We’re a channeldriven organisation and it is key to have a well-trained channel in order to continue to grow and win more customers and, more importantly, to enable partners to be competitive time investment made by the partner is well spent. We address sales, pre-sales and technical modules in this span of time, in parallel, to ensure we don’t capture much time from the field.” He says reseller expectations depend very much on their size, business model and maturity. But in the complex and fastevolving network and security market, for

example, there is a strong preference for classroom and on-site training where salespeople and engineers can get their hands on the kit. Online elements are better suited to theory — although even for this, some vendors, including infrastructure specialist Siemon, prefer to stick with face-toface programmes. “Our training follows a classroom format with plenty of practical sessions delivered over either one or three days, depending on the training required,” explained Iyer Sivakumar, Siemon’s Middle East sales manager. “No channel training is currently delivered online, as Siemon prefers to have a more active involvement with the channel.” All media have an important role to play, suggests Judhi Prasetyo, regional channel manager at network security specialist Fortinet Middle East, which offers classroom training based on an official curriculum designed for engineers who wish to pursue certification. There are also self-paced and live web training options, as well as a variety of non-certification courses and workshops.

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“Resellers are aware that different levels and types of training are required, depending on the situation and the partner’s requirements,” said Prasetyo. “With classroom training, resellers can expect to learn in depth about our products and solutions, not only to be able to pass the exam but also to prepare for challenging scenarios in the field. “The online training options allow participants to study at their own convenience. The product update training helps resellers to keep themselves up to date with our new products and features in existing products. And the onsite and on-thejob training are essential to enable partners to maintain major installation or complex projects, usually involving integration with other systems.” At Juniper, only sales and theoretical technical training is steered down the online route, according to Taj El-Khayat. Partners are encouraged to use this to self-study in preparation for classroom-based learning. “Online alone is not that efficient,” he said,

“as we believe that group classroom training is more beneficial; challenges and topics are tackled in a much better fashion for understanding. Attendees can bounce ideas off each other and share experiences that add value to their knowledge.” Prasetyo says incentives are important. Fortinet provides some free training modules via its online campus, while demonstration units are given away at the end of classroom-based modules so that resellers can continue to train themselves and extend their education across their teams back at their own business. At Fujitsu Technology Solutions, Anthony Peck, director education and training in the Middle East, Africa and India, suggests that the rewards of successfully completing training modules are the real incentive. “Reseller certification depends on certification of a reseller’s individual sales, presale and post-sales staff,” he says. “Our certified resellers receive preferred treatment when it comes to project assignment, lead generation and marketing

> Judhi Prasetyo, Fortinet

With classroom training, resellers can expect to learn in depth about our products and solutions, not only to be able to pass the exam but also to prepare for challenging scenarios in the field

support, making it worthwhile to have their employees trained and certified by us.” Ramzi Itani, channel manager at Symantec MENA, agrees that resellers expect to be able to quantify the return on their investment — time as much as money ��� in training. Like most vendors, Symantec is constantly refining its programmes to reflect that and is about to announce some significant enhancements. “Partners will be able to increase their access to Symantec Partner Programme benefits, rewards and incentives through accreditations: the more accreditations the partner achieves, the greater the rebates,” said Itani. “Our accreditation offerings include sales and technical specialist programmes. These are available exclusively to partners in a free, flexible online format via PartnerNet,” he added. Some vendors prefer to keep training programmes in-house. Symantec provides product training to resellers directly in the Middle East, for example. And Siemon uses its own trainers to deliver the necessary

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> Anthony Peck, Fujitsu Technology Solutions

> Iyer Sivakumar, Siemon

courses for an installation company to become a certified installer — and qualified to offer a full Siemon 20-year warranty. “Some distribution partners can offer a one-day training course if they wish, but this course is more concerned with the physical installation rather than the complete building design and installation,” said Sivakumar. Other vendors, including Fujitsu and EMC, use authorised training centres to deliver official certification training. “These are usually not distributors but rather internal or external training centres that are neutral and especially focused on providing training of the highest quality,” commented Fujitsu’s Peck. “Most of the time, we rely on a third-party specialised company to run the training,” said Havier Haddad, channel sales manager for the Gulf and Levant at EMC, “especially for management training, technical and soft skills training, and subject matter training.”

Certified resellers receive preferred treatment when it comes to project assignment, lead generation and marketing support, making it worthwhile to have their employees trained by us Juniper, too, uses third-party training vendors for its top tier courses and technical certification. For its breadth channel, it relies on its network of distributors. “They have access to many resellers — usually transactional types of partner who require specific, non-complex, knowledge transfer,” said Taj El-Khayat. “We believe that by empowering our distributors to train on our behalf, the breadth channel will enable us to scale up faster and have access to a wider reseller base. This also gives the distributor the ability to drive its unique value-add and practice a true model of valueadded distribution.” Fortinet’s authorised training centre, Secureway, also happens to be its regional distributor and while training materials are delivered from the US and Europe, courses are taught by an Arabic-speaking instructor. Fortinet plans for more classroom training sessions to be conducted in cities across the

region, so that resellers no longer need to send their engineers to Dubai or Riyadh to attend monthly courses. Siemon already delivers training in Dubai, Abu Dhabi, Kuwait and Saudi Arabia. This reflects one of the most significant developments in vendor training programmes: the increased localisation of content designed to address specific needs, a trend noted by Peck at Fujitsu. “Our new schedule for October to March 2010 includes brand new modules that will be delivered in the Middle East for the first time, and a shift towards higher-end topics,” he revealed. “We will run, for example, at least three sessions of the new PRIMERGY midrange and high-end service course in that period in Dubai. Our new schedule also includes technical training sessions in new locations such as Jordan and Bahrain. The trend for courses offered in Dubai is towards more higher-end modules.” „

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“We have expanded Laserfiche to our branches and different units, and have smoothly integrated it to our existing business model while enhancing productivity, security and disaster recovery on our critical documents. It has become an essential component of our day to day operations.” —Marie-Louise Akiki Chief Information Officer & Senior Manager Lebanese Canadian Bank

Furn-el-Chebbak, Damascus Road, Gharios Center (8th floor) Beirut, Lebanon LFsales@bmbgroup.com www.bmbgroup.com

Laserfiche® Rio is different. With workflow automation, Webbased document management and powerful information capture tools, Rio gives local offices, departments and workgroups the tools to work their best—while enabling the home office to their efforts towards meeting enterprise goals. Get the global control you need and the local flexibility you want. To learn more, please call our Exclusive Distributor BMB sal at +961-1-294504 x 176.

Visit Laserfiche at Gitex Technology Week, October 18-22. Located in Hall 7, Stand C7-20 Run Smarter®

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How many enterprise content management (ECM) systems actually serve the entire enterprise? Most of the time, they end up confined to one or two departments, because they just can’t accommodate both local and global business processes.


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El-Ajou unveils its Channel Partners Program as an essence of 50 Years Market Excellence.

Composite Proposition

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For any information please contact ndissi@elajougroup.com Riyadh +966-1-4630773

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What incentives are there for partners to join the Canon Channel Development Programme Partners will enjoy preferential treatment and preferential products, services and support from Canon and El-Ajou. We are targeting around 60 customers, although some of those customers will be multi-branch or multi-divisional, so when we talk about ‘one’ customer it could have 10 or 15 locations. Partners will benefit from working with the number one firsttier provider in Saudi Arabia as they will enjoy better service and our multi-location presence across the country. Depending on the size of the account, they will also enjoy different kinds of pricing support that will enable them to achieve what they want.

Nassim Dissi, General Manager EL-AJOU

How important is the Programme for El-Ajou?

It has never been easier for the channel to make money from Canon solutions following the launch of a new Channel Development Programme managed by El-Ajou Group, the official agent for Canon office automation products in Saudi Arabia. Nassim Dissi, General Manager at El-Ajou, explains what the programme means for partners.

What is the El-Ajou Group? El-Ajou has been known for almost 55 years as a Canon partner for Saudi Arabia. We are the sole agent for all Canon printing solutions, working both independently and with Canon to cover the market. We have over 20 offices, branches and service centres, which really distinguishes us from the competition.

Tell us about the Canon Channel Development Programme and the kind of partners you are looking to join it. We are putting great focus on the Channel Development Programme, and it will continue to be the main focus in 2010. The Programme is basically about developing the secondtier vertical markets, which means we are assigning partners across the country to further the channel business and grow it. We have to go with the best partners available in the country, and those people will be the IT dealers, VARs, megastores and hypermarkets. There will be two major focal areas to the programme — high volume products and high value products.

We are a believer that we have to change from within in order to be more effective. We cannot only depend on the outside inputs from the market; we have to drive it ourselves so we are changing our organisational structure to suit this. The Channel Development Programme will have a separate head and more reach into the IT dealer and VAR market. We are looking to double our numbers in the second tier channel during the next 12 to 18 months. Right now, the channel programme accounts for about 35% of our total business, but we are looking for it to be more than 50% of our business in the future - without affecting our direct business of course.

What kind of products are covered by the Programme? Many products are covered, such as laser printers and multifunctions, inkjet printers and multifunctions, network enterprise printing systems, large format printers, high-speed document management scanners and document workflow solutions. Each category will be directed through a certain VAR or a certain channel. What should partners do if they want to join the Programme? They don’t need to do anything, we will approach them. It is our job to find them and to approach them because we are very selective with this; it is not open to everybody. We will select the ones that we want to approach and we will build our plan together. Of course, if somebody who we have not approached wants to join then they can contact us. Our website and numbers are known to everybody.

Advertorial


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CHANNEL AWARDS (85) // RECOGNISING EXCELLENCE IN THE CHANNEL

COUNTDOWN BEGINS TO 2010 CHANNEL AWARDS A lot has changed in the IT market since the Channel Middle East Awards took place back in March. But one thing remains certain — the awards will be back for a third installment in 2010, and here’s how you can enter.

>>

It might seem a long way off, but 2010 is actually only round the corner...and that means vendors, distributors, resellers and retailers will be eligible to begin submitting their nominations for the annual Channel Middle East Awards. The 2010 Channel Middle East Awards are scheduled to follow a similar format to the previous two years, paying recognition to the channel development and market success stories that have taken place in the region throughout the past year. Given the changing economic conditions that have impacted the market in recent months, the 2010 Awards will

hold even more significance for the individuals and companies that are judged to have shown excellence in their field. There will be 16 category titles up for grabs, including two ‘Readers’ Best’ awards, voted for in an online poll by the readers of Channel Middle East. This year’s winners of those accolades included Microsoft for its much-heralded Gulf Partner Programme and networking distributor Westcon for its SixStep Selling Cycle initiative. Also honoured this year were Cisco, Citrix, Promate, Sun, Western Digital and Xerox, with Aptec, Computerlinks and

Redington Gulf landing the main distribution prizes. Pro Technology, Al-Futtaim and Sharaf DG claimed success in the reseller and retailer categories while Juniper’s Taj El-Khayat and Al Yousuf’s Ahmad Qasem were recognised for their work in the channel. Although the prospect of discovering the victors of each category generates all the excitement, the Channel Middle East Awards ceremony and gala dinner also presents a unique opportunity for channel executives to meet with peers and colleagues from the industry outside of the office environment.

As usual, nomination forms and entry criteria for the 2010 awards will be available on the dedicated Channel Middle East Awards website listed below. Any IT vendor or channel company that is active in the Middle East — including distributors, VADs, resellers, VARs, solution providers, IT traders and retailers — can enter the awards simply by filling in an official entry form. Just keep an eye on the website for more details later this year so that you give yourself every opportunity to follow in the footsteps of previous Channel Awards winners come 2010!

AWARDS CATEGORIES Components Vendor of the Year Networking Vendor of the Year Peripherals Vendor of the Year Printing and Consumables Vendor of the Year Software Vendor of the Year Systems and Hardware Vendor of the Year IT Distributor of the Year Value Added Distributor of the Year Retail Distributor of the Year Enterprise Reseller of the Year SMB and Commercial Reseller of the Year Retail Company of the Year Channel Executive of the Year Outstanding Contribution Award

FOR INFO ON THE CHANNEL www.itp.net /events/channelmeawards MIDDLE EAST AWARDS VISIT >>

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FACT FILE (87) // THE MARKET BY NUMBERS

SMART MONEY Customers still spending on devices

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Handset giant Nokia continues to rule the roost in the EMEA smart phone market, but the company has seen its lead cut following the massive gains made by US-based nemesis Apple. Although latest data for the second quarter from research house Canalys shows that Nokia still boasts a massive 64% of the market, the figure is seven percentage points lower than the previous year as a result of increased competition from its main rivals and its own failure to keep up with average market growth. Nokia’s sales remained flat at around 8.9 million units during the second quarter even though the overall EMEA market increased 11% year-on-year to 14 million units. While Nokia maintains what looks like an unassailable lead, its Q2 performance was eclipsed by Apple which soared above RIM into second place with 14% market share after the release of its iPhone 3GS inspired a staggering tenfold increase in sales. “Apple has revolutionised the smart phone sector, leapfrogging more experienced rivals,” reflected Pete Cunningham, senior analyst and Canalys. “The competition must move much faster to close the gap in terms of functionality and design, and at the same time try to target Apple’s weak spots. These are primarily related to its business model, which requires premium upfront pricing, high cost of ownership and, in many countries, a restricted operator line-up.” With third-placed RIM expanding its portfolio, including the introduction of lighter 2.5G models, the top three smart phone manufacturers now control 88% of the EMEA market between them. According to Canalys, smart phones continue to be one of the bright spots in a technology sector that has otherwise struggled to post growth in the current economic climate. Innovation in interfaces, design, applications and promotions has encouraged consumers to maintain spending, which in contrast to the PC channel, has led to greater price stabilisation. Chris Jones, VP at Gartner, insists the differences between the smart phone and PC industries are notable. “PCs are a highly standardised, commoditised platform, where one model is often indistinguishable from another,” he said. “Consequently, PC price points are incredibly low, which is good for customers, but the industry lacks excitement. Smart phones are different — Nokia, Apple, RIM and Palm have all achieved success by developing their own operating systems and delivering distinct devices and interfaces.”

APPLE TAKES BITE OUT OF MARKET Strong Q2 performance sees company climb ahead of RIM

_EMEA MARKET SHARE BY SMART PHONE VENDOR DURING THE SECOND QUARTER OF 2009 Nokia 64% Apple pp 14% RIM 10% Others 12%

SOURCE: Canalys estimates

NOKIA HOLDS OFF MAIN RIVALS Smart phone behemoth maintains global leadership

_WORLDWIDE MARKET SHARE BY SMART PHONE VENDOR DURING THE SECOND QUARTER OF 2009

Nokia 44% RIM 21% Apple pp 14% Others 21%

SOURCE: Canalys estimates

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CONSUMER ELECTRONICS (89) // RETAIL CHANNEL NEWS

TFT-LCD MARKET OBSERVES FIRST SIGNS OF RECOVERY Demand for mobile PCs and netbooks spurs TFT-LCD sector to robust growth, prompting talk that market has overcome worst of the recession

T

he display market could be on its way to staging a much-anticipated recovery if a recent improvement in volumes proves to be sustainable. Latest data from research house DisplayBank reveals that August shipments of TFT-LCD panels set a new industry record by rising to more than 50 million units, a 28% increase on the previous year. Large-area panel shipments have steadily started to climb again after reaching rock bottom in January, culminating in the double-digit August growth. DisplayBank attributes the upturn to strong demand for mobile PCs and netbooks. The increase in sales has been to the benefit of

several large panel makers, including Samsung, LG Display and AUO. Samsung maintains the number one position in terms of volume, with 27% market share, just ahead of LG Display, which accounts for 24% of the market. AUO occupies third spot with a 17% share. Hopes of a recovery have been further endorsed by data from analyst firm iSuppli, which shows that sales of TFT-LCDs with a diagonal dimension of 10-inches or more were also healthy in June. Shipments rose 9% against May and 26% on the previous year. The increase represented a sharp acceleration in the growth rate from 7% in May and 6% in April. “June marked the first

month in 2009 that all three large-sized LCD panel applications — televisions, notebooks and desktop PC monitors — showed yearover-year expansions in shipments,” observed Sweta Dash, senior director for LCD research at iSuppli. “With the market hitting on all cylinders, the strong demand outlook for panel purchase is expected to continue through the third quarter as brands prepare for strong sales in the upcoming festive season.” The growth in the largesized LCD segment was primarily led by strong consumption of TVs and notebook panels, which both increased 9%. Dash insists the positive sales momentum also

continued in July and August as the TV market began preparing itself for Q4, despite signs of some inventory build-up in the retail channel. “Nevertheless, there is fear that panel supply may be tight because of various factors, including the glass shortage, as well as the recent earthquake in Japan that has damaged Corning’s glass tanks and impacted glass supply for Sharp’s eighth-generation fab,” warned Dash.

Production of TFT-LCD panels has ramped up in recent months (GETTY)

major update to its iPod and iTunes multimedia range. The

APPLE REVEALS LATEST LINE-UP

upgrade, announced by Apple supremo Steve Jobs at a

Vendor unveils product updates

A

pple is looking to take the retail channel by storm in the fourth quarter of the year after revealing a

recent event in the US, includes new versions of the iPod Nano and iPod Shuffle ranges, improvements to the iPod Touch and iPod Classic, and a new version of iTunes. The Mac vendor, which sells to Middle East consumers through independent retailers and the iStyle showrooms operated by the same group that owns regional distributor Arab Business Machine (ABM), is expecting the new iPod Nano to go down particularly well. With 100 million units sold already, Apple hopes the addition of a built-in video camera and microphone, will boost sales further.

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BUSINESS INSIGHT (91) // INDUSTRY-WIDE NEWS

::

PRINTER SECTOR JAMMED BY SALES SLUMP AS CORPORATES HALT HARDWARE SPENDING Research house warns printer suppliers to expect further misery following disastrous first half in which volume sales across the EMEA region declined 24% against previous year orporate customers have been holding back IT purchases to such an extent that the EMEA printer market crashed 24% in unit terms during the first half of the year. New data from analyst firm Gartner reveals that combined sales of printers, copiers and MFPs totalled just 18 million units between January and the end of June — around six million units fewer than the same period last year. Tosh Prabhakar, senior analyst at Gartner, says the global recession continues to be “detrimental” to the IT business and blames the limited availability of credit for the lack of hardware spending taking place. “With reduced budgets, businesses cannot invest in new equipment and continue to hold onto

C

existing devices, which as a result is hampering new sales and impacting revenues for the print vendors,” said Prabhakar. “However, as vendors see hardware sales decline, there is an upturn in vendors widening their document management software and services capabilities to help businesses reduce and better manage costs.” In the EMEA printer, copier and MFP market, each of the top-five vendors suffered a decline in the first half of 2009. Market heavyweight HP and rival Canon came off worst, registering a slump in shipments of 31% and 26% respectively. The pair accounted for 56% of the overall market between them during the first six months of 2009.

xtreme Networks has struck agreements with a series of

customer base in the region. The vendor recently formalised alliances with 10 partners across the MEA theatre, including Saudi ISP AwalNet. Extreme insists the deal will create a combination of leading network solutions with strong project Epson, Brother and Samsung also failed to post growth, although their sales did not shrink at the same rate as the market average. Printer manufacturers who think they have now seen the worst of it could be in for a rude awakening, according to Gartner. “We foresee the market in the second half of the year continuing to show doubledigit decline, and in the worst-case scenario could reach a 30% decrease,” warned Prabhakar.

Microsoft Navision provider strikes deal that allows end-user customers to purchase licences on a monthly, fixed-fee basis

N

E

partners as it looks to expand its

VAR TOUTS ‘PAY AS YOU GO’ avision specialist Landsteinar GCC is set to test the region’s appetite for utility computing after becoming an authorised Microsoft Service Provider Licence Agreement (SPLA) Partner. The Dubai-based software consultancy, which is a subsidiary of the NexTech Group, will now give enterprise customers the option to lease Microsoft software on a ‘pay as you go’ basis. Microsoft’s SPLA licensing scheme

EXTREME COSIES UP TO CHANNEL

seeks to enable partners to rent its products on a monthly basis for a fixed fee, emulating how service providers bill their customers. The vendor says the advantage of this model is that customers do not have to pay any start-up costs and are only invoiced for the number of users per month. SPLA can be classified as an operational expense rather than a capital cost. The most current software is also ensured and product usage

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implementation capabilities.

A lack of credit is making customers think twice about printer purchases

AwalNet is expected to use the tie-up improve the quality of its internet services by upgrading its technical infrastructure and after-sales support offering in the Kingdom. “Widening our base of knowledgeable channel partners is a core objective for us at Extreme Networks,” declared Aziz Ala’ali, regional director for Extreme Networks (below). Extreme’s channel base in the Middle East and Africa region now comprises 36 partners, according to the company.

rights and prices are fixed for the duration of the programme. Marios Skordis, director of Landsteinar GCC Dubai, said the partnership would allow the systems integrator to license Microsoft software “by the drink”, eliminating the large upfront investment that many companies are forced to incur to purchase Microsoft products. Customers are guaranteed that any price changes will only ever occur on an annual basis in January and will be proportional to price changes in the Microsoft Open Licensing Programme during the preceding year.

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As well as getting AwalNet onside, Extreme has recently extended agreements it had in place with Kuwait-based Al Alamiah Technology Group, Jordan-based Computer & Communications Systems and Lebanese outfit Amik Online.

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// CHANNEL MIDDLE EAST_OCTOBER 2009

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PEOPLE (93) // APPOINTMENTS AND AWARDS

::::

INDUSTRY TRAINING OUTFIT CALLS ON CISCO CHIEF TO FILL VACANCY

Former general manager at Cisco installed as managing director of IT training provider Global Knowledge’s Middle East and Africa business as previous head moves to the US

I

T training specialist Global Knowledge has turned to Cisco Gulf executive Mazen Jabri to run its operations in the region following the departure of its previous managing director. Jabri, who has worked in a series of senior positions at Cisco during the past decade, will take over the running of Global Knowledge’s Middle East and Africa operations from former boss Melad Ghabrial, who is relocating to the US. Global Knowledge is one of the largest providers of Cisco training courses in the region. It also specialises in educating customers on technologies from vendors such as Oracle, Microsoft and Symantec, offering more than 700 courses in total. Jabri initially started as an account manager with

Cisco, before becoming UAE country manager and eventually gaining promotion to the UAE general manager and operations director’s post. Two years ago he was voted Cisco’s ‘general manager of the year’. “We have enjoyed tremendous success within the MEA region and I believe that Mazen’s experience and relationships will help us achieve the aggressive goals that we have set for our MEA business,” stated Richard Pryor-Jones, EMEA president at Global Knowledge. Meanwhile, Jabri’s former employer Cisco has shaken up its management set-up by moving some of its key executives into new roles. Former Cisco Qatar chief Wayne Hull has taken over the networking vendor’s UAE operation, while Tarek Ghoul

VETERAN JOINS PARAMOUNT

S

ecurity reseller Paramount has bolstered its top tier

of management by appointing industry veteran G. Ramaswamy as its chief operating officer. Ramaswamy boasts more than two decades of IT market experience, spanning technical, sales, channel management and business development roles. As COO, he will oversee all will be responsible for the overall Gulf subsidiary. For the past five years, Ghoul has held a series of general management and channel roles at Cisco. “These seasoned leaders are chartered with leading their respective territories to drive growth and further develop relationships in critical countries within Cisco’s East region,” said the firm in a statement. Former Cisco Gulf chief Samer Alkharrat will now run the firm’s emerging markets public sector business.

day-to-day operational matters,

Mazen Jabri will oversee Global Knowledge’s MEA business

including strategy co-ordination and execution, resource management, operational quality and efficiency management. Prior to joining Paramount, Ramaswamy (below) held roles at Wipro, Compaq and Sun. For the last seven years, Ramaswamy has worked for outsourcing firm MindTree, where he established and ran the company’s Middle East operation for three years prior to taking on a European post. “He is well respected in the industry for his knowledge and

JOB CAROUSEL GAINS PACE Vendors and distributors reveal latest senior appointments as they look to strengthen their businesses in the region

I

t has been a busy month in the Middle East IT channel, with a number of companies announcing key executive appointments. In the distribution sector, Avnet Technology Solutions confirmed the appointment of Tarek Massoud as its new regional HP sales director in Saudi Arabia. Before joining Avnet, Massoud served as business partner development and supplier manager

at Sun Microsystems distributor Tech Access and worked for Fujitsu Technology Solutions. Staying in Saudi Arabia, PC vendor Lenovo and Red Hat distributor Opennet have both strengthened their senior teams. Lenovo has named Ahmed Abdelaal, formerly the boss of HP’s IPG arm in KSA, as country sales manager, while Opennet has hired Ala’a Mousa Saadeh as

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problem solving capabilities,” territory manager, with a focus on Riyadh and the Eastern province. Saadeh previously held roles at resellers Saudi Oger Systems and Arabic Computer Systems. Meanwhile, Trend Micro has appointed Citrix’s Nick Black to the position of regional technical manager, while EMC has named former Oracle and IBM veteran Magued Mahmoud as head of its Egyptian Centre of Excellence. Finally, Nokia Siemens Networks has promoted the current boss of its Asia-Pacific services arm, Jorg Erlemeier, to Middle East head.

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said Paramount CEO Premchand Kurup. “Paramount has ambitious business plans and a highly experienced executive like Ram will play a key role in driving our business forward.”

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SOLUTIONS (95) // SUCCESS STORIES FROM THE CHANNEL

RESELLERS COMPLETE BLUE COAT NETWORK CONTRACT Partner incentive scheme appears to be paying off as Dubai Investments deploys ProxySG appliances in an effort to optimise application delivery

B

lue Coat has carried out a project with two of its channel partners to deploy its ProxySG appliances at Dubai Investments. The implementation is designed to optimise and secure the delivery of applications and content across the organisation’s wide area network, which connects its HQ with its distributed regional offices and remote users worldwide. The Dubai Investments deal is one of the first major contracts that Blue Coat has announced since revealing plans earlier this year to invest US$1m in a global channel rewards scheme for authorised partners selling its ProxySG appliances. Blue Coat bizarrely refused to disclose the

A

names of the partners involved in the project, but confirmed that it was delivered by two of its resellers in the region. The vendor says the deployment has resulted in Dubai Investments accelerating businesscritical applications while containing and lowering ongoing WAN costs. It has also improved file and application response times for its remote and travelling users, while enabling its regional offices to gain direct online access to services through the use of ProxySG and ProxyAV appliances deployed in conjunction with Blue Coat’s WebFilter software. Dubai Investments is the largest investment company

publicly traded on the Dubai stock market and boasts a paid up capital of more than US$870m. “Our business demanded a solution that would optimise and secure the flow of information across any of our distributed locations and for any remote user,” explained Manohar K, IT advisor at the firm. “The Blue Coat installation has reduced our bandwidth consumption over the WAN and across our internet connections enabling us to contain network costs while boosting employee productivity and expediting business processes,” he added. Before the deployment, Dubai Investments had considered increasing

the MPLS bandwidth for its WAN, but found that WAN optimisation was able to address underlying performance issues rather than just providing a temporary solution. “Blue Coat ProxySG appliances provide a decisive advantage to distributed enterprises and organisations by accelerating applications and the business processes that they enable, while also providing security,” stated Blue Coat boss Nidal Taha.

Nidal Taha says Blue Coat’s WAN appliances facilitate application use

STS TAKES ACER TO TAX OFFICE

mman-based reseller and IT services provider STS has bagged a public sector contract that will see it furnish

the Jordanian Income and Sales Tax Department with the latest hardware from PC vendor Acer. The deal involves

Jordanian reseller lands PC and technical support contract

the supply of Acer desktops and notebooks, as well as the provision of technical support services, although neither party has disclosed the value or size of the agreement. “This agreement entails STS to provide a set of modern and easy-to-use Acer equipment,” explained Nabeel Fayoumi, executive director of STS’ integrated solutions division. “We are keen to provide fully integrated IT solutions that serve our demanding customers.” 300-strong STS is one of Acer’s key resellers in Jordan. It serves as an Acer Executive Partner and operates a local authorised service centre for the vendor.

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PRODUCTS (97) // MARGIN-MAKING OPPORTUNITIES

[] THIN CLIENTS

[] SPEAKERS

LASTING THE DISTANCE

LOSING WEIGHT

Accessories ace unveils speakers with extended battery life

Fujitsu promises savings with new thin client

Battery life is a big seller in the notebook category and it is increasingly becoming that way in the speaker market too, as Logitech is keen to make clear with its latest portable system for iPod devices. The vendor claims its S125i speakers (pictured below) offer up to 10 hours of listening time, while its S135i model guarantees an impressive 20 hours before the music cuts out. out The S125i speaker weighs less than 500 grams gra and can deliver extra bass at the push oof a special ‘Bass Boost’ button. It also of offers a standard 3.5mm jack so that users use can plug in any portable music player oor even their PC. The S125i is available through the UA UAE channel from this month mont and come with a suggested retail price of sugg AED365 (US$99). AED3

An affordable entry to the world of server-based computing is what Fujitsu purports to be offering following the launch of its Futro S100 thin client in the market. The hardware vendor says an individual thin client and monitor combination consumes a maximum of 29 watts under full load — 66% less than the kind of consumption levels that even a green desktop can offer. “Making the switch to Fujitsu’s thin client line combines the benefits of high availability, near-silent operation and easy manageability with a very low total cost of ownership,” said product manager Chandan Mehta. The Futro S100 is compatible with a range of server client infrastructures, including eLux and Windows CE 6.0.

WEBSITE: WEBSITE www.logitech.com

_WEBSITE: www.fujitsu.com

STAKING A CLAIM Printer model betters lab offering, claims vendor Epson has unveiled its new Stylus Photo P50, a compact A4 photo printer that it claims can produce high quality photos at a maximum speed of 38 pages per minute and is designed with the same look and feel as its PX Series all-in-one range. The vendor insists users don’t have to worry about racking up a huge consumables bill either as the printer uses individual ink cartridges, meaning that only the colours that have run dry need to be replaced. “The Middle East has seen a surge in demand for home printers that can produce long lasting, high quality photos that can be compared comp to, or are even better be than labquality prints, and the Epson Stylus Photo P50 effectively e caters to this demand,” stated Khalil El-Dalu, general genera manager at Epson Middle East.

LAPTOPS

[]

[] PRINTERS

HANG TOUGH Vendor refreshes rugged notebook line Panasonic is looking to boost its share of the notebook market by introducing major updates to its business-rugged mobile PC line, including the launch of the Intel-based Toughbook F8. The notebook boasts a 14.1-inch display and includes the Gobi 3G mobile broadband (WWAN) Qualcomm solution that allows connection to high-speed mobile internet services. Yuichiro Suzuki, product manager at Panasonic Marketing Middle East, says the notebook range is designed to offer industry-leading portability, durability and wireless connectivity. “We add to that a three-year warranty with a round-the-clock customer support team to give the highest possible return on investment m ment and lowest total cost of ownership,” he declared. _WEBSITE: www.panasonic.ae e

_WEBSITE: www.epson.com www.

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// CHANNEL MIDDLE EAST_OCTOBER 2009

NEXT MONTH (98) // INSIDE THE NEXT ISSUE

COMING UP

THE MONTH OF NOVEMBER SHOW TIME We bring you up to speed with all the major news and channel announcements from this year’s GITEX Technology Week exhibition.

Registered at Dubai Media City, PO Box 500024, Dubai, UAE Tel: +971 4 210 8000; Fax: +971 4 210 8080; Web: www.itp.com Offices in Dubai and London ITP Technology Publishing CEO Walid Akawi Managing Director Neil Davies Deputy Managing Director Karam Awad General Manager Peter Conmy Publisher Natasha Pendleton EDITORIAL

TAKING THE INITIATIVE What are the ingredients of an effective channel programme? We go in search of the answers from a handful of key vendors with partner schemes tailored to the Middle East market.

RETURN TO SENDER Managing the return of faulty products has always been a painful process for the channel, but it is an issue vendors are working to improve.

Q4 2009

EVENTS UAE 19th October 2009: ACN Arab Technology Awards With awards for world-class projects and implementations, leading vendor contributions and outstanding individual efforts, the ACN Arab Technology Awards recognise the outstanding work of the region’s IT community. This year’s gala dinner and ceremony, which take place at Dubai’s Jumeirah Beach Hotel during GITEX Technology Week, is expected to be attended by more than 400 leading technology professionals from the region. Nominees will compete in 16 categories that reflect their work in key vertical sectors, as well as the innovation and support delivered to customers by vendors and partners. New categories for 2009 include Green System Implementation of the Year for end-users and Vendor of the Year awards for players in the software, hardware and security markets. For more information about the ACN Arab Technology Awards and to ensure your invitation visit www.itp.net/acn-awards

UAE 17th-18th November 2009: The Middle East Mobility & Broadband Summit The fifth edition of The Middle East Mobility & Broadband Summit will be held at Dubai’s Emitrates Towers hotel this year under the theme of ‘The connected society — empowering people to increase efficiency, productivity and profitability’. Hailed by its organisers as the only event that focuses on the technologies and tools that are needed to manage end-to-end mobile business solutions, the twoday affair will offer an insight into the latest trends shaping the industry. The Middle East Mobility & Broadband Summit reaches out to a wide audience of international suppliers, application developers, solution providers, network suppliers, vendors and analysts, creating a vibrant forum for topical debate. Issues such as ‘achieving mobility project success’ and ‘technology choices and implementation’ are set to feature high on the agenda at this year’s event. For more information visit www.memobilitysummit.com

SAUDI ARABIA 17th-21st December: Commtel Originally launched more than two decades ago as an international event to cater for what was then a fledgling computer market, Commtel has evolved into an exhibition that covers the latest developments in IT and business communications. Al Harithy Company for Exhibitions, which organises the show, insists its aim is to bring together the leading suppliers of hardware, software and office equipment. Over the years a steady stream of business solution providers, mobile phone specialists and internet providers have been introduced to the show portfolio, making it one of Saudi Arabia’s top IT and communications events. The 24th Commtel, which will take place for five days at the Jeddah International Exhibition and Convention Centre, bills itself as a one-stop shop for IT buyers and companies to discover the latest innovative products and services available in the market. For more information visit www.acexpos.com

_www.itp.net_

Group Editor Mark Sutton Tel: +971 210 8225 e-mail: mark.sutton@itp.com Editor Andrew Seymour Tel: +971 210 8320 e-mail: andrew.seymour@itp.com ADVERTISING Commercial Director Richard Judd Tel: +971 210 8482 e-mail: richard.judd@itp.com Group Sales Manager Sandip Virk Tel: +971 210 8276 e-mail: sandip.virk@itp.com Sales Manager Rajasree Rammohan Tel: +971 210 8361 e-mail: raj@itp.com STUDIO Designer Emily Noorollahi PHOTOGRAPHY Director of Photography Sevag Davidian Chief Photographer Nemanja Seslija Senior Photographers Alan Desiderio, Efraim Evidor, Khatuna Khutsishvili Staff Photographers Khaled Termanini, Thanos Lazopoulos, Leila Cranswick, Jovana Obradovic, Rajesh Raghav, Ruel Pableo PRODUCTION & DISTRIBUTION Group Production Manager Kyle Smith Deputy Production Manager Ali Fahmi Production Co-ordinator Basel Al Kassem Managing Picture Editor Patrick Littlejohn Image Retoucher Emmalyn Robbles Distribution Manager Karima Ashwell CIRCULATION Circulation Manager Shadia Basravi MARKETING Head of Marketing Kate Chapman Event Manager Preeta Panicker ITP DIGITAL Assistant Editor Vineetha Menon Group Sales Manager Ahmad Bashour Tel: +971 4 210 8549 e-mail ahmad.bashour@itp.com Senior Sales Manager ITP.net Nathalie Akl Tel: +971 4 210 8520 e-mail nathalie.akl@itp.com Internet Development Manager Mohammed Affan Content Manager Asad Azizi Web Advertising Manager Meghna Jalnawalla Creative Director Craig Willers ITP GROUP Chairman Andrew Neil Managing Director Robert Serafin Finance Director Toby Jay Spencer-Davies Board of Directors K.M. Jamieson, Mike Bayman, Walid Akawi, Neil Davies, Rob Corder, Mary Serafin

Circulation Customer Service Tel: +971 4 286 8559 Printed by Atlas Printing Press. L.L.C. Controlled Distribution by Blue Truck Subscribe online at www.itp.com/subscriptions The publishers regret that they cannot accept liability for error or omissions contained in this publication, however caused. The opinions and views contained in this publication are not necessarily those of the publishers. Readers are advised to seek specialist advice before acting on information contained in this publication, which is provided for general use and may not be appropriate for the readers particular circumstances. The ownership of trademarks is acknowledged. No part of this publication or any part of the contents thereof may be reproduced, stored in a retrieval system or transmitted in any form without the permission of the publishers in writing. An exemption is hereby granted for extracts used for the purpose of fair review. Channel Middle East is audited by BPA Worldwide. Average Total Circulation 7,567 (6 month audit Jul to Dec 2008).

Published by and Copyright © 2009 ITP Technology Publishing, a division of ITP Publishing Group Ltd. Registered in the B.V.I. under Company Registration number 1402846.


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// CHANNEL MIDDLE EAST_OCTOBER 2009

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GET TO KNOW (103) // CHANNEL CHAMPIONS UNCOVERED

Shabu Sultan, General Manager, Memory Technology Middle East > What’s your career history in the industry to date? My career history began with a smalltime PC and peripherals company during the beginning of the PC era in India immediately after my graduation. One year later I moved to an IBM associate company and served almost four years before I ended up in the Middle East. I joined an international PC and notebook brand in 1998, creating a strong dealer network across the region. I then moved to MTC to launch the company’s PC and notebook business. Since then I’ve handled many roles with MTC during the last five years.

> What is the best deal you have ever closed? I consider every deal a best deal when it comes to business as each one will have its own pleasure and satisfaction in different ways. Personally, I believe the best deal in my life is yet to come!

> What do you enjoy most about working in the Middle East IT market?

> What do you dislike most about working in the Middle East IT market?

The most enjoyable part of working in the Middle East market is the cosmopolitan environment. I don’t think you will get a chance anywhere else in the world to have an opportunity to work with multi-ethnic people around you. We have around seven nationalities of people in our team and deal with another 10 different nationalities on a daily business — that’s really interesting !

Every market has its own challenges and niches so the Middle East is no different. However, I believe this market could be more business-friendly if the credit terms were better defined and the number of defaults could be reduced.

> How would you describe your management style?

In a distribution market where executives change seats all the time, Shabu Sultan has been a constant fixture at MTC for the past five years, playing a key role in helping the company develop its strategy...

I define my style of management in a ‘3-D’ format. Firstly, to delegate to people with responsibility and authority. Secondly, to discuss the day-to-day matters and guide the team in the right direction. And thirdly, to ensure decisions are made on time and that crucial decisions aren’t delayed.

> What is the most valuable business lesson you’ve learnt? > What is the proudest moment of your career to date?

> How do you relax outside of the work environment? The place I like the most is my home so that is the place I prefer to relax, more than anywhere else in the world. I find time almost everyday after work to swim or to play my favourite game, badminton.

No failure is final, until you stop trying!

There are many proud occasions in my career, however the one I wish to cherish at this moment is the launch of our Xtreme GPS navigation system. It was a dream project for us and to realise the project and launch the product successfully was the result of the hard work done by the team.

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> What are your top channel tips for the next 12 months? Focus on the core business and pay attention to customer satisfaction.

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// CHANNEL MIDDLE EAST_OCTOBER 2009

_www.itp.net_

COMMENT (104) // REACTION TO THE BIG TOPICS

Soundbites from the world of technology

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We bring you a round-up of who’s saying what and why in the global IT channel.

Recent research we undertook showed that four out of 10 small businesses buy their threat protection off the shelf from retail outlets, so there is huge scope for the channel to step in and offer support, advice and products to this market. Symantec’s VP of small business EMEA, Andrew Douglas, highlights the opportunity on offer to partners after the security vendor unveiled its Small Business Specialisation Initiative.

We have begun production of the world’s first 32nm microprocessor, which is also the first highperformance processor to integrate graphics with the CPU. At the same time, we’re already moving ahead with development of our 22nm manufacturing technology and have built working chips that will pave the way for production of still more powerful and capable processors. Intel CEO Paul Otellini details how ow the he chip maker plans to stay ahead of the competition at the company’s recent Intel Developer Forum.

I know we’ll get questions about how fast the market’s going to grow. Whatever that answer is that’s handed to us in 2010, we will grow faster. We expect the industry to return to growth in 2010 and believe HP will outpace the market.

To date, unlike others in our industry that have stumbled and failed, we are surviving a worldwide financial crises and emerging as a more dominant firm. In the beginning of 2009 we set goals to increase sales and margins, while reducing debt and achieving better financial results. I am pleased with our recent publicly released financial reports and want you to know that the company is working very hard to sustain our progress. Alan Yang, chairman and CEO att ACL Semiconductors, thinks the memory chip maker has been able to ride out the economic downturn without too many problems — and says so in a letter sent to all its shareholders.

The new partner profitability framework, coupled with our broad portfolio of small business solutions and support, helps our channel partners build and sustain a profitable small business practice. This is the Cisco Small Business Advantage, and with it, our partners can confidently pursue and serve their small customers. Cisco’s VP worldwide small business sales, Andrew Sage, reinforces the vendor’s intent to drive deeper into the SMB market after rolling out a new small business partner initiative and expanding its SMB product portfolio with new network security and collaboration technologies.

It has been a tough year for technology hno ogy bellwethers such as HP, but CEO Mark Hurd insists the PC and printing giant expects to see a recovery in 2010.

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{ Cyberoam is committed to its strong channel and partner focus. The agenda of this roundtable meet is to facilitate and streamline some of their key business issues like distribution, pricing, discounting, renewals and incentives. The roundtable designed for the partners will bring much-needed cohesiveness among them to seize the opportunities in the region. nage Cyberoam’s channel sales manager, e kind Surendra Bishnoi, explains the of issues the UTM vendor is keen to get to grips with ahead of a first-ever roundtable with local distributors.

The move to in-house support for the EMEA region confirms our commitment to our customers and partners. Moving technical support in house means we can respond to customers much more efficiently and much more effectively than offering such services through a third-party. Sonicwall chief Keith Bird does his best to justify the UTM vendor’s decision to end its agreement with a third-party provider and bring EMEA technical support functions in-house.



Channel Middle East - Oct 2009