ALKHOBAR, 11 November — I have received a note from Microsoft Arabia that they are holding Solution Days all week across the Kingdom. Unfortunately, they have just sent the information to me, so I couldn’t give advance notice, especially to my readers in the Eastern Province. Places at the events are limited, with registration required. To register, either telephone (800) 124-0078 or go to microsoft.com.sa/events.
Alkhobar’s Solution Day is today at Le Gulf Meridien Hotel. The same event will be held in Riyadh tomorrow at the Sheraton Hotel. In Jeddah, the Solution Day will be on Wednesday at Le Meridien Hotel. The event kicks off in each city at 8 a.m. and runs till 12:30 p.m.
Solutions presented in addition to Windows and Office XP will include Great Plains (ERP), Maximo (Maintenance for Manufacturing), Penygon (ERP), and Pas 2000 (Healthcare).
Moving on to a completely different subject, the holy month of Ramadan will begin at the end of this week. I received an e-mail titled, "One God, One Nation." Its text reads, "Imagine all the Muslims in the world saying, ‘Allahu Akbar’ at the same time. Let us all unite on the 1st of Ramadan (Nov. 16, 2001) for 3 minutes Takbeer starting at 2 p.m. Makkah time (11 a.m. GMT)." It’s good to see the Internet used to help an uplifting, non-violent idea make its way across the planet.
Next, I would like to share with you some of the results of an interesting study done by Paradigm at the request of Tech Data Corporation. The report, which was just released, is titled, "Resellers KSA 2001." This is the second year that Tech Data has sponsored an investigation into the subject, of course for the company’s own forward planning, but the report’s findings are significant for the Kingdom’s IT market as a whole. The complete study may be obtained from Steve Lockie, Managing Director, Tech Data FZ-LLC ([email protected]).
Tech Data Corporation, founded in 1974, is a leading global provider of IT products, logistics management and other value-added services like training, technical support, financing, configuration, and assembly. Tech Data sells only to resellers and retailers, not to end-users. Ranked 95th on the Fortune 500, the company and its subsidiaries serve more than 100,000 technology resellers in the United States, Canada, the Caribbean, Latin America, Europe and the Middle East. The company generated sales of $20.4 billion for its most recent fiscal year, which ended Jan. 31, 2001.
Tech Data is the largest trade-only distributor of computer hardware, software and services for MENA (Middle East and North Africa region). Its main office is located in Dubai, United Arab Emirates with warehouse and logistics operations in Dubai, Jebel Ali, Dubai Airport Free Zone and Bahrain Airport Free Zone.
In discussing the report’s findings, Steve Lockie emphasized that the study is even more valuable this year than last, because it shows definite trends, which only become apparent over time and with comparison. Participating in the study were 40 independent Saudi resellers of various sizes, selected by Paradigm from a list provided by Tech Data. The list of resellers was a compendium of all resellers in the Kingdom, not only those trading with Tech Data. They were asked a set of questions that encompassed issues such as market direction, technology sales and customers.
"Looking at the resellers’ market mix we can see that branded PCs, PC peripherals and software are gaining a greater portion of the Saudi resellers’ product mix, something that signals a persistence of the Saudi-based resellers to focus on the commodity market," explained Lockie. "The increase in the number of resellers carrying software is also an indication that the anti-piracy effort is having an affect and that the market may be moving to a service-based model. The report does show some extremely worrying trends though. Fewer resellers are carrying storage and networking equipment. This means lower sales to the enterprise market."
According to Lockie, with the proliferation of branded computers in the market, a brand alone is no longer enough. Consumers are becoming smarter when making PC purchases and PC vendors appear to be gaining or losing market share in part based upon how quickly they can integrate new technologies into their machines while maintaining competitive pricing. One interesting point to note is that resellers are still chalking up a good trade in hard drives. This was unexpected due to the near total domination of branded PCs in this market. Lockie thought that the continuing popularity of hard drives was a result of users indulging in equipment upgrades rather that simply trashing their machines.
In other findings, the reseller’s report suggested some unpleasant prospects for sales to the enterprise market. Not only are fewer resellers stocking networking and storage equipment but the statistics showed that the corporate market is moving away from resellers. Their enterprise market base in the Kingdom declined by 50 percent in the last year. Lockie thought there were several theories that might explain the poor numbers. The downturn could signify a reduction in the overall purchases of the corporate market caused by economic factors. There also is quite a bit of negativity surrounding certain equipment purchases due to the state of the infrastructure in the Saudi Internet. In addition, the past year has seen Saudi corporate clients working directly with manufacturers, bypassing resellers.
"There was a slight upward movement in the trade base with home and small businesses," said Lockie. "The increase was about five percent. The drop in the walk-in-trade and medium-size businesses was minimal. This shows that if resellers are to survive they must focus on those market segments. We believe that the key to succeed in those markets is improved services. Service centers are profit centers in their own right. Resellers should look at service as an opportunity."
Many different areas were examined by the Resellers’ Survey. From Arab News’ perspective it was extremely interesting to note that newspapers in Saudi Arabia are an increasingly significant source of information on trends in the IT industry. Customers are also being briefed very early by the vendors. In effect, vendors are going around their channels to promote their new technologies and products.
"These findings make us take a second look at how we are educating our audience," said Lockie. "Talking to knowledgeable journalists appears to be very important. As the dailies challenge the trade magazines in delivering IT news perhaps a reconsideration of advertising placement is required. In the future, how much of our marketing resources should be invested in exhibitions? The numbers show that their influence has dropped considerably."
For next year, Lockie hopes to refine the survey further. He felt that it was important to incorporate information on consumables as well.
"Printers are almost free now," said Lockie. "Companies make their profits by selling cartridges and paper. Even in a depressed market where consumers and businesses might not buy new equipment, they will continue to buy a significant amount of consumables."
Looking at an uncertain future in the near term, prompt availability of consumables and a commitment to outstanding service just might be the keys to survival for Saudi resellers in a challenging IT market.