This is a technology outlook document for Middle East and Africa regions

1. Channel Middle East
State of the Channel
Meera Kaul
Optimus

2. An unexpected growth in IT spending
follows a period of stagnation. It is
being interpreted by analysts as an
indication that businesses have
regained enough confidence to start
reinvesting in their futures.
For countries such as the UAE, the
growth offers small-to-medium-sized
IT companies a chance to resume the
kind of revenue increase enjoyed
before the global financial crisis struck
the sector

3. Performance
In terms of performance, the economy in
some of the countries is looking
extremely buoyant. In the past 5 months
unprecedented business has been done
in the economy. A lot of projects that
were shelved last year have been inked
and possibly more money on IT has
been spent in the UAE as compared to
the even the bigger economies of KSA.
So where has this money been spent?
Primarily on Security, Storage,
Virtualization and surprisingly Analytics.
And we will be very careful in not defining
that to do anything with big data.
The Government initiatives to grow the
usage and training in Technology for
government employees is providing
further fillip to the economy. Government
aided institutions are extremely
aggressive towards IT education and a
lot of technology vendor certifications are
finding their way into educational
curriculums in regional schools and
colleges.

4. Sentiment
The sentiment is definitely all shades
of bullish. As backlog from last year
gets cleared, everyone is working
towards a fruitful half yearly
Ramadan.
A lot of interest from economies of
Europe has opened up greater focus
on the region by EMEA players. New
technology ventures, start-up
innovation is finding its way into the
channel.
Sentiment

5. Focus on SMB
Interesting to note is the complete focus of vendors to redesign their product and
services towards the SMB market in the region. A clear shift in strategy with the
entire range of products being introduced and focus in go-to-market makes SMB
the NEXT BIG THING - SMB

6. Infrastructure
Technology Infrastructure is the focus in Qatar,
KSA and Oman seems to be the surprise candidate
for IT Security infrastructure so far this year. Oman
is getting a lot of attention and appropriate
response from the end customers.
There is a huge cross-over market through Middle
East in Africa that a lot of European and American
vendors are clearly recognizing that prospect.
Infrastructure

7. Open Source
The governments in UAE,
Egypt, KSA and Qatar are
seriously exploring the
implementation of Open
Source technologies to create
opportunities for more
optimized, budget controlled
environments.
Open Source

8. Cloud
Private cloud initiatives have started their
proliferation in the channel and there is big
opportunities to be availed of by the
channel in this process. It includes the
Managed Cloud Services provider
opportunities which in my opinion will the
lowest hanging fruit in this entire play.
Cloud

9. Analytics
Real time analytics is also finding a
great market in the region. However,
the region has a huge maturity curve
to start talking real big data
implementations. Whereas the
innovation in most markets is driven
by natural language processing,
heuristics and predictive analysis of
huge data chunks, the region is
battling with infrastructure needs
around the data processing and
storage and thus the focus is on only
real time analytics.

10. Security
Security remains a huge
technology driver especially
with greater
consumerization of
technology. The channel
will find great opportunity in
consulting, technology,
products and services to
drive these technology
blueprints.
Security

11. Business Innovation
All of this takes us to assess if there
has been any business innovation in
the channel at all? Apart from a great
propensity to follow global fads without
linking them back to the regional
landscape, there seems to be very
less focus on innovation in business
process or product that emanates
from the region.
Innovation

12. New Devices
The adoption of new devices is huge in
the market and despite a lack of internal
innovation, the use of new devices is
almost unprecedented and almost
instant.
devices

13. Mobility
The need for enterprise mobility and proliferation of mobile
devices as the first enterprise device is leading the way
towards a huge opportunity in localized and customized
enterprise app space.
Mobility

14. Innovative Business Models?
Most of the channel has not really
changed their business model after
the huge Value era last year, when it
seemed that if the word “ Value” was
pertinent to be attached to any
document, release, assessment or
conversation lest the business would
sink.

15. Change of Offering Profile
What is interesting to see is that
some vendors are changing
their product profile for the
region. Of late, a couple of
vendors have introduced
previously not allowed product
lines to be addressed into the
regional market. I am looking at
that as a sign of the recognition
of the fact that the maturity of
the market to absorb these
products having grown.

16. Cash Flow Management
Cash Flow, which has traditionally been a huge suppressor of
innovation seems to be materialized from the wraps. In the
past few months, the region has evidently emerged from that
difficulty since a lot more vendor- partner partnerships and
joint ventures to address market and end customer needs
have been inked in a process to reduce cash flow risks and
exposure

17. Retail
Retail has reached out to clearly define
their territory by demanding better
margins from their vendor from the
portfolio they carry and it seems that
there has been some success in that
process

18. Partner Programs
Vendor partner programs are clearly moving towards
more demand generation based models than a wait a
watch assessment. This is a sign that the market will
grow aggressively so.

19. Improving regional relationships
A lot of global vendors have reached
out to the regional market to assess
and rebuild customized partner
relationships to cater to the growth of
their products. There is a lot of flexibility
in the customization of channel
programs and this is definitely a sign of
things to come.

20. Nexus of forces
is everywhere !
SOURCE:
GARTNER

21. Channel Opportunities
Devices
Device applications
Connectivity
Security
People

22. Regional
IT spend sentiment Close to 70% of CIOs
indicated increased
IT spending in 2013
over 2012
SOURCE: IDC CIO SURVEY 2013

23. But keeping options open on how?
Regional CIOs
planning to adapt,
adjust and learn,
with new
technologies and
demands SOURCE: IDC CIO SURVEY 2013

24. 3rd
platform: Life after client server
From 2013 through
2020, 90% of IT
industry growth will
be driven by 3rd
Platform
technologies that,
today represent just
22% of ICT
spending…
SOURCE: IDC

25. Top tech trends in 2013, so far…
#1 Mobile device battles (YES, STILL B2C)
#2 Mobile applications - HTML5 (STARTED)
#3 Personal cloud (LUKEWARM)
#4 Internet of things (NO SIGN, B2C?)
#5 Hybrid IT and cloud computing (GREAT!)
SOURCE: GARTNER

26. #1 Mobile devices and accessories
will substitute for
PCs and components

27. Substitution between smart phones,
tablets and PCs
SOURCE: GARTNER
Holistic forecast
model has greatly
enhanced our
understanding of
device penetration
and potential user
substitution
between devices…

28. #2 Device applications

29. Corporate device
application management
will challenge end users

30. Mobile data
Mobile data services
are increasingly seen
as must have.
Spending on mobile
data will exceed
mobile voice in 2013
in mature markets
and globally by
2016…
SOURCE: GARTNER

31. Mobile enterprise Apps
SOURCE: IDC CIO SURVEY 2013
Mobile
enterprise
applications is
priority for 41%
CIOs

32. Application management of
corporate devices
Enterprise mobile
app penetration will
either force a move
to standard
corporate liable
devices for
compatibility or
multi-platform
development…
SOURCE: IDC

33. Management of corporate devices
41% of CIOs rank it
as a strategic focus…
51% of CIOs
concerned about
security risks and
policy SOURCE: IDC CIO SURVEY 2013

34. #3 Connectivity

35. The realm of
corporate connectivity
is opening up many fold

36. Cloud computing is #1 priority
SOURCE: IDC CIO SURVEY 2013
Cloud
computing is
top priority for
57% CIOs

37. Cloud computing is #1 priority
SOURCE: IDC CIO SURVEY
2013
45% of CIOs have
current investment in
cloud computing or
within next 12
months…

38. Interconnected ecosystem…
SOURCE: IDC
Skills and expertise will help in progression from
one opportunity segment to the other…
Skills and expertise will help in progression from
one opportunity segment to the other…
Skills and expertise will help in progression from
one opportunity segment to the other, channel
partners can set the pace …

39. Versatility of IT platforms
Hybrid environments will be rule, not exception…
Networked clouds are catalyst for enterprise cloud
adoption…
Advanced unified communication delivered via
hosted voice platforms…
SOURCE: IDC
Hybrid environments will be rule, not exception…
Networked clouds are catalyst for enterprise cloud
adoption…
Advanced unified communication delivered via
hosted voice platforms…

40. Building the extended enterprise
Employees, partners, customers will
drive growth of networks…
SOURCE: IDC

41. CSPs set the pace and direction
SOURCE: IDC

42. #4 Security

43. Corporate security will be
under managed, under resourced
and open to threats

44. Gap between required and actual
Space for
channel
partners to
operate
SOURCE: IDC

45. #5 People

46. SOURCE: IDC CIO SURVEY 2013
Shortage of skills
Opportunity for
consultants, training
partners,
academies,
outsourcing
suppliers, call
centre, help desk…

47. #5 Today and tomorrow

48. Regional ICT spending, $193b
Traditional IT
space $44b,
23% share
Rest of IT $149b,
77% share
Where do
you want to
be??
SOURCE: GARTNER
?

49. Its 2013 and we’ve been through the Arab spring upheavals and survived. In this region, we live in societies
with over 350 million active consumers situated perfectly to expand into markets east and west; north and
south.
We are almost at a 100% mobile penetration. Which means that our consumers are instantly comfortable with
new mobile product adoption. While smart phone penetration is low at the moment, they expect 50%
penetration in places like Egypt within three years. It is already well above this in the Gulf. The large consumer
bases are on the verge of adopting widespread credit card use, ePayments, and eCommerce. All the major
hardware and software players as well as most of the major mobile players have expanded their operations in
the region, and are also pro-actively working with the entrepreneurial communities to help them connect and
expand.
As technology proliferates in the ecosystem, there is a chance of innovation coming from surprising places.
However, investment will always flow into regions that afford the investors
•Higher market cap.
•Engineering talent exists and the cost of outsourcing design and product development is low
With everything else, including the growth percentages working for us; there is yet lot to be done in converting
our region from a buyers market to a innovation market.
Innovation requires a remarkable infrastructure pool of talent and entrepreneurial support. To grow this
ecosystem in our regional markets will require a very evolutionary mindset with not only the entrepreneurs
but with the investor community as well.
Apart from that the channel needs to make way for better working conditions for women in technology. It
cannot be that our entire ecosystem is devoid of that important part of our society
Entrepreneurs rise despite of the infrastructural support and change their markets with innovation and
endurance.

50. Beyond the Spring…………………..

51. Follow me
@meerakaul