Opinion

Channelnomics

Channel rmeDun & Bradstreet joins us as one of the knowledge partners for the Annual Industry Survey 2015. The company’s MD, Manjeet Singh Chhabra, gives an in-depth overview of the challenges and growth drivers within the regional IT channel industry. 

Globally, the IT market, comprising of sale of hardware, software, IT services, and telecommunications reached a whopping size of $ 3.7 trillion in 2014 and is projected to grow at 5 percent in the current year, as per a report by CompTIA. This translates to $ 185 billion in new earnings alone this year. A major part of this spending came from IT purchases made by businesses, leaving the consumer spend small in comparison. While the US market comprised of 28 percent of the world total, market shares have gradually shifted over time to Asia, Latin America, Africa and Eastern Europe. Additionally, the core IT segment (hardware, software and services) accounted for 56 percent of the total market, while telecom services comprised the remaining 44 percent. This allocation however, varies across countries, with some countries being less advanced in the traditional categories of computers and software, but relatively mature in the telecom segment.

Over the last few years, while developed markets across the world have hit saturation, Middle East has emerged as a key growth driver for the IT industry as it offers sellers and resellers a robust, rapidly expanding market in parallel with the current development trend in the region. With huge opportunities in both private and public sector, Middle East is where most IT companies are looking to leverage their expertise and create a viable business proposition for channel partners, distributors and resellers.

As is the case with most robust markets, Middle East too is evolving rapidly with pan European distributors coming in and acquisitions and mergers happening from within and outside the region. While all these changes augur well for the future, the channel needs to be ready to adapt and change their business models accordingly. In keeping with this, the major countries in the Middle East, especially the GCC, are investing huge amounts in ICT infrastructure in order to be at the forefront of the technology evolution phase, with initiatives such as free trade zones and economic centres along with liberalisation and privatisation of the telecom industry.

In a survey conducted on IT decision makers and CIOs in the Middle East channel, 57 percent indicated that their single largest technology-related challenge faced in 2014, was maintaining a secure environment. This flows from the ever growing number of threats and risks. In this regard, companies are aiming to develop IT security skills such as enterprise vulnerability management that will offer a high level of protection to the enterprises in the region as well as provide partners with new avenues for business growth. Few other serious challenges faced by partners include ensuring availability of systems and applications, improving the utilisation of IT assets and managing connectivity.

Here are a few emerging trends that the channel needs to be aware of and should align their businesses accordingly:

  • Mobile computing: The future lies in new compute models such as mobile computing as it offers faster entry into markets where PC penetration has been low and fixed broadband coverage is poor. This year, the rise of the New IP, a new networking paradigm is sure to drive network evolution as it is increasingly open, software-driven, and user-centric.
  • New technologies: A host of new technologies such as disaster recovery systems, regulatory compliance, storage technologies and better data management are also underpinning the enterprise market in the channel.
  • Demand for PS: In a survey of over 500 channel organisations globally, conducted by Brocade in 2014, almost half of the channel respondents revealed that they expect professional services (PS) to become their main revenue generator by 2020. Needless to say, PS and consultancy is the way forward for the channel.

With all these new trends taking shape, customers in the Middle East are sure to turn to the channel for consultancy and this is where channel organisations that have recognised these powerful trends beforehand will be able to grab the emerging opportunities ahead of competition.dnb

Expert view

“Few other serious challenges faced by partners include ensuring availability of systems and applications, improving the utilisation of IT assets and managing connectivity”

-Manjeet Singh Chhabra, Managing Director, Dun & Bradstreet

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