2015 has been a year of challenges for the regional channel market. These challenges have revolved around a number of aspects such as political unrest, decline of the oil prices, currency fluctuations and other more age-old problems such as low margins and over credit issue. However, the industry is expecting the market to grow significantly over the course of 2016. Although the first few quarters will continue to be sluggish, we should see a positive impact by the end of the year.
The reasons behind this growth are largely due to government-led infrastructure projects in the build up to Expo 2020. Also, an increasing number of companies are looking to digitalise their operations, opening up new streams of opportunities for the channel players within the region.
Amar Singh, Head of Enterprise, Alpha Data, says, “Digitalisation is now widely regarded as highly relevant to the economic development of countries in this part of the world. Moreover, stricter requirements on national security will push the technology business even further.”
Agreeing with Singh, Fadi Mubarak, Channel Leader, Avaya AMEA, adds that 2016 will see organisations across the region increasingly embrace the opportunities created by digital transformation. “This will be at the centre of enterprise strategy across all industry segments and markets because it enables organisations to deliver different and better customer experiences. IDC is predicting ICT spending across the Middle East, Turkey and Africa will top $260 billion in 2016 as organisations increase expenditure on mobility, cloud, social and Big Data initiatives to drive digital transformation.”
However, market conditions still remain a challenge as economic factors prevail, however there are signs of growth, says Eyad Al Shami, Channel Manager ME, Citrix. “We expect these growth opportunities to continue into 2016. A recent report indicated that UAE IT sales market is expected to hit around AED 22 billion by 2019, compared to the AED 17 billion it is worth now. This is testament that growth will be expected in some parts of the region more so than others.”
The major shift that the industry is experiencing is the move from traditional business models and legacy technologies to a more flexible dynamic structure centred on newer emerging technologies. In such a scenario, only those professionals who are nimble and adaptive while thinking of innovative business ideas can truly differentiate themselves.
With ICT playing a major role in the transformation of business to align with market trends and dynamics, Reeman Ansari, Manager Partner Organisation, VMware MENA believes it is also necessary to remain competitive and relevant in a volatile market. She says, “You can either continue to innovate to remain relevant or stagnant and become irrelevant for customers. Mobile-cloud technology is driving fundamental change across every vertical industry you can name, redefining how companies compete, and how they engage with their customers.”
And related to this, another learning from 2015 has been the rising importance of the OPEX model within enterprises. Taj ElKhayat, Regional Vice President, Middle East and Africa, Riverbed Technology says, “Today, if you look at the Kingdom of Saudi Arabia, there have been announcements about very stringent cuts in the CAPEX budget. However, from an OPEX perspective, organisations still have to maintain the infrastructure they have already invested in. So, a lot of OPEX spending will be on optimisation and proper utilisation of existing infrastructure.
“Those channel partners that don’t have a play in OPEX models now have the opportunity to work with their selected vendors towards this end. They can help customers become more agile in how they manage their operations and through the use of automation, and outsourced manpower, free up technical resources within the customer organisation to focus on more mission-critical aspects of the business. Partners that invest in services, have an OPEX model in mind, and that are working with fewer ‘trend-aligned’ vendors will have every reason to be optimistic about their business prospects in 2016.”
The optimism also extends to the region’s retail sector where experts are predicting an upsurge in business in the coming months.
Neelesh Bhatnagar, CEO, Emax, says “We believe that retail has been at the centre of an international revolution enabled by ICT. Technological products have become a matter of necessity for the evolving consumers’ lifestyle, which has increased consumer demand for technology. Today 85 percent of UAE households have computers and tablets as they provide computing power to the user with mobility. According to several studies done in the UAE, the IT market is expected to grow eight percent YoY till 2018.”
By no means will 2016 be easier for the regional channel industry but by planning ahead and investing into the right resources, it can certainly be a more positive and better growth year. While there are a number of new technologies around which we will see huge progress in this year, most of them will stem from technologies such as Internet of Things, cloud, Big Data and analytics, mobility and security.
Internet of Things
“The increasing volume of data and bandwidth utilisation from the burgeoning number of Internet of Things (IoT) sensors and ‘smart’ connected devices such as healthcare devices, home security systems and appliances, vending machines and check-out stands; will drive traditional networks to the breaking point. Mesh topologies and fabric-based technologies will become increasingly attractive as the answer for cost-effective solutions that can accommodate the capacity needed and flexibility required for the constant changes in network traffic. Decades of client server architectures are coming to an end.”
Fadi Mubarak, Channel Leader, Avaya AMEA
“Today, the integration of Internet of Things (IoT) and Internet of Everything (IoE) will require many services and the involvement of partners who understand how cloud applications, mobile applications, and mobile application development all play a part in the connectivity of everything.”
Taj ElKhayat, Regional Vice President, Middle East and Africa, Riverbed Technology
“We are observing a growing awareness of, and maturity in, the Internet of Things (IoT) side especially with the technology directions set by the region’s governments, mainly in UAE. Furthermore, we believe that Big Data and storage in general will take a significant share of expenditures.”
Mohamad Abou-Zaki, COO, EMIRCOM
“IoT is the what needs to be watched out for in 2016. In B2B, the IoT is growing rapidly. By 2020, it is been estimated that there will be about 200 billion devices on the market globally – roughly 26 smart objects for every human on the planet. Most IoT devices are currently being used in businesses, healthcare and factories.
However, with the huge addition in the number of devices in use comes an increase in the number of potential challenges to overcome, including, security, enterprise, consumer privacy, data flow, bandwidth capacity, storage management, server technologies and data centre network.”
Leenna Jayachaandran, Director Enterprise Business, Genome Technology
Big Data and analytics
“The speeds of both, the business of technology and the technology in business, is becoming too fast for customers and channel partners who don’t understand the business principles of outsourcing, keeping the value chain simple, and ensuring (or rather ‘insuring’) agility in investments – especially technology investments. For channel partners, some important tends to watch out for in 2016: the growing adoption of Software-Defined (networking, storage, and data centres), open, and hybrid technology solutions and platforms; initial forays into the Internet of Things; the rise in private cloud implementations; customers taking on single-vendor strategies, and the consolidation of the technology market and players.”
Shams Hasan, Enterprise Product Manager, Middle East, Dell
“Enterprise storage will continue to grow in the New Year. Data storage, data protection, data management, Big Data, high performance computing and data analytics solutions and services will continue to govern the regional channel business. In addition to this, we see an increase in business from the channel for our Managed Services portfolio, which we have launched recently. Going forward, we see cloud computing and Big Data analytics as major actors in bringing in a paradigm shift in the way we all do business.”
Ranjith Kaippada, Sales Director, StorIT Distribution
“We expect Big Data, cloud, mobility, security, data centre optimisation and the AV business to be the big tickets for regional channels this coming year. We predict a major shift from the service-oriented to the pay-as-you-grow business model from the customer side to reduce capital and operating expenses. We are particularly eyeing emerging technologies such as the Internet of Things and Big Data as well as physical security, among others. We also intend to focus on adding more resources for new technologies to ensure optimal delivery.”
Amar Singh, Head of Enterprise, Alpha Data
Cloud and mobility
“We are currently entering the ‘professional era of the cloud’. The cloud market itself is changing rapidly. The cloud that the industry has constructed to date looks a lot like a half-built bridge: picture two siloed towers that remain largely disconnected and disjointed. On one side you have the on-premises private-cloud tower, where governance is strong but app delivery is simply too slow. On the other side is the off-premises public-cloud tower, where app delivery is fast, but governance is weak. We must now move to a more connected and compatible era of cloud, in which businesses launch applications to the ‘span’ instead of a silo. This unified hybrid cloud represents the future of IT.”
Reeman Ansari, Manager Partner Organisation, VMware MENA
“The top technologies that are currently in growing demand are cloud services and mobility. Increased demand for technologies that enable businesses to be agile and flexible – such as cloud services. Investing through the OPEX model will become the norm in the next few years as the pay-as-you-go model is easier, more flexible and permits growth as needed. In response to customer demand for flexible, scalable solutions, partners will likely focus on offering a greater selection of cloud services that drive better performance with less upfront investments such as SaaS and DaaS.”
Eyad Al Shami, Channel Manager ME, Citrix
“The MEA region is widely considered the second-fastest growing market in the world. The SaaS sector is set to establish marked performance at a forecast of 29 percent expansion year-on-year. Converged systems will also establish strong growth as more organisations are looking to utilise the agility, productivity, flexibility and cost-saving benefits presented by such solutions to increase their competitive advantage. Also, private cloud will establish itself as an invaluable asset for many applications shared services providers. Telecommunication firms in MEA are also expected to transform to become IT and digital services hubs in the coming years with their strong interest and implementation of technological advancements.”
Rex Neate, Business Development Consultant, Software AG Middle East
“As enterprises move along the education curve, particularly when it comes to getting comfortable with security around technologies such as BYOD and cloud, I believe there is going to be a large appetite for adoption of, particularly, cloud and mobility solutions. If partners want to be successful in 2016, they are going to need to build practices to support these technologies. Given that most of the technologies are interdependent, partners need to be able to provide solutions for the complete ecosystem and to this end it would behoove them to be vendor agnostic and focus on best-of-breed solutions rather than solutions from big name, legacy providers.”
Abdul Rehman, Regional Manager, Pulse Secure
“We believe that information security is a big area for businesses. There is a greater demand for emerging technologies such as social media, cloud, Big Data, mobile and Internet of Things, which are evolving in the market. There will also be significant development in the areas of storage and security that would show substantial growth and gain momentum in this year. As a security focused vendor, we know the battle is continuous and ongoing as new security breaches and discoveries emerge every moment and we are prepared to meet such challenges with latest technologies.”
Jose Thomas, Managing Director, Bulwark Technologies
“There is no one particular technology as such but rather a wide and prominent focus on IT security. IT security is foremost in investments and is therefore a golden opportunity for the channel. The Internet of Things trend is starting to give rise to the adoption of new technologies and usage models, and security plays a crucial element in securing the network. We are also seeing organisations across the GCC implement mobile security solutions, to cater to BYOD trends and the threats it exposes the organisations to.”
Maya Zakhour, Channel Director, Middle East, Fortinet
“The shift between traditional distribution model and online business model will continue to accelerate in the coming years. The companies that will be able to offer a solid e-commerce and market place platform with a rich offer of SAS solutions will dominate the landscape of the future years that will come. Today the traditional business model of distribution, is mainly built around few giant vendors that dictate their conditions to partners and to the market. The ability of reaching the partners and end-users with a wide offer of solutions and with a cost-effective approach, will open a new spectrum of opportunities and possibilities for the entire channel.”
Mario Gay, Managing Director, Mindware
“There is a world of difference between turning an operating profit and making enough money to survive. Channel players pre-occupied with top line sales growth need to pay more attention to the bottom line basics. A trading mentality continues to persist in the channel, which means some companies buy and sell at same price level with omega margin attached. This makes the top line sales figure look great and impressive, which gives a false illusion of the company’s size and power. Partners should manage costs and work towards improving gross margins. It is important for all employees to understand the company’s goals and vision in order to create a strong motivated team.”
Arun Chawla, CEO, Trigon
“It’s important to continue reviewing your business model and adapt quickly. Global has been already pioneering ‘solutions distribution’ in the region, which is stressing the importance of more partner education and training, providing alternative financing models and increase service opportunities.
The UAE’s and Qatar’s economies are well diversified and should remain a key driver in 2016. We even see new projects from Yemen, where the supporting countries are helping to rebuild the infrastructure.”
Mario M Veljovic, VP Solutions, MEA, Global Distribution