Simon Witts, vice president, Sales and Marketing, Microsoft EMEA, visited the Kingdom immediately before COMDEX Saudi Arabia. Witts is responsible for marketing Microsoft’s product and service offerings to the complete spectrum of personal computer users and channels of distribution in Western and Eastern Europe, the Middle East and Africa. In an exclusive interview, he discussed a wide range of issues.
Witts predicted that the PC market would remain strong in the Kingdom pointing out that PC shipments to the Middle East are showing overall about four times the growth, compared with Western Europe. In business PCs specifically, he indicated that there is about five times the growth. Witts also felt that there would be a huge increase in the number of Internet sites and the amount of Internet presence in the region.
“The Middle East has about one percent of the number of websites compared with Western Europe,” he said. “It should have many more.”
Witts found that both government representatives and corporate leaders that he spoke with during his visit were enthusiastic about bringing their operations online, but he believed that there were significant infrastructure issues involved in making such moves possible. When asked to what extent were infrastructure deficiencies holding the Kingdom back he replied: “It’s difficult to assess. I mean obviously the explosion of wireless is a good example. If you think from what we hear that the wireless population in the Kingdom will be larger by the end of next year than the fixed lines then something says to me that there is more we can do with fixed lines. And frankly not having what I would call medium bandwidth available to even businesses, outside of private networks, will become an issue, because that’s really only when data services become valuable to the consumer or business user. So I mean ultimately I think to be fair to Saudi Telecom just the explosion of customers, be they fixed line or wireless, at the end of the day customers also want to get the right bill and have reliable services. So you could say that the infrastructure is growing as fast as it can, but clearly data services, hosting services, commerce services, the relationship between them and the ISPs really how that’s going to shake out, ultimately that needs investment and I would be surprised if the business demand is not there. It is an issue and it’s going to become more of an issue not less of an issue.”
Witts hoped that Saudi companies would consider opening up their networks more. He had seen several examples of businesses that were operating very rich networks but such resources were only being used internally.
“There are incredible investments in terms of inside the firewall,” said Witts. “I can’t see why that’s not just opened up to partners and customers and suppliers. Most companies worry about opening up their systems on an extranet to the real customer base, because employees are never the real customers. You can make the organization more productive but in actuality you’re designing IT systems for the wrong audience. The more you design for the end customer and the direct partner the less the employees get in the way.”
Witts visited the Kingdom immediately after the story about the German Government, the German media and Microsoft had been splashed all over the front pages of newspapers worldwide. Denials had been put out by all parties concerned that Microsoft products had any sort of security issues. It turned out to be just another installment in the Microsoft security saga. Witts found the entire situation frustrating because as he said, “The second that it was any kind of reality that our system wasn’t secure or that in some way privacy could be breached then the trust in our products would collapse and our market share would collapse. There’s too much at stake there.”
He pointed out that governments around the world have certified Microsoft products from a security standpoint. The source code has been made available to universities and other large clients as well. No one ever came back and stated that any sort of breach had been found. To the question of why such stories kept cropping up, Witts replied that he believed that it was just a conspiracy theory that got good press.
“If I was a hacker or someone who wanted to launch a virus I would attack Microsoft because my hack would be well publicized or my virus would spread fast because of the high market share that we enjoy,” said Witts. “If there was a conspiracy theory of the US government or a US company putting software out that gave them an advantage in terms of the intelligence networks I’d pick Microsoft. So that’s what it is. It’s a conspiracy theory and it won’t go away, just like the JFK story won’t go away and so we’re going to live with it. Honestly anymore we don’t even expect it to go away. There’s a grassy knoll probably caught up somewhere in our story (laughter). But you know we can refute that by making the source code available to governments and making them feel more comfortable that they can really get into the code and understand it from a security point of view.”
Microsoft and Linux supporters at the highest levels in the Kingdom have been embroiled in pitched battles in support of one operating system over the other. Witts seemed to feel that the Linux camp was making a lot of noise but wasn’t achieving much real success.
“It is interesting that when we look at data for the whole of Europe, the Middle East and Africa, here in Saudi Arabia we have the most market share of websites as a percentage, over 60, running on Windows and Windows 2000 and the lowest Linux share we’ve detected in any other country,” said Witts.
He can’t understand why anyone would give Linux a second look. Witts believes that since Microsoft is providing so much support for Arabization — nearly 200 employees working full-time to ensure that versions of Microsoft products for the Arabic market are perfect — that Microsoft software is the best choice for entities and individuals in the Middle East who are looking for reliable well-supported products at a fair price.
In discussing the pricing of Microsoft software which is the subject of much discontent in the marketplace, Witts gave as an example Windows XP, which is coming out later this year.
“Take Windows XP, there are about 40 million lines of code in the product,” he said. “It has probably cost us several billion dollars to develop. What’s that worth? I mean it’s a stated fact for example that IBM makes more profit out of 40,000 versions of MVS than we make out of a hundred million versions of Windows.”
What’s the wrong or right price for a product that enables so many new user scenarios? Witts feels that users must consider the value of the product and not just look at how many boxes of it are available in the market.
Microsoft has taken the most floor space at COMDEX Saudi Arabia. Visitors to the show will be able to stop at six separate sections in the Microsoft pavilion displaying solutions for education, government and financial services, and the features of the Microsoft Enterprise Group and Microsoft Support and Professional Services as well as products for home use.
With products on the market that would allow for everything from a virtual trade show online to video conferencing, why is Microsoft still supporting a traditional trade show? “We are an industry on the move and so much is always new,” said Witts. “I can read about these new products and technologies in some publication. I can go on the web and see presentations. But at the end of the day people, myself included, still enjoy their annual COMDEX. I believe that in Western Europe and the United States these shows played a very important role in creating excitement about IT and I think this region needs that excitement. It takes an effort for someone to get online and read page after page of information. But if they see that there’s a big, huge show and so many companies are coming together, they will go there and see things that they might never have thought about before. Microsoft Arabia’s amazing presence at the show is a demonstration of our support for the Kingdom and its people.”
While preparations for COMDEX Saudi Arabia were moving forward, the United States was in the grip of a stock market crash with technology companies taking some of the hardest hits. To what extent will the economic downturn in the US affect this market? Here is Witts’ view: “Hopefully very little. Telecommunica-tions infrastructure will continue to advance. People will take their internal rich networks online. PC growth will be significantly higher than in other regions. Some of the core things that fuel the high tech industry will boil down to do customers buy? Microsoft is not cutting back in the region in fact far from it. It all goes back to where you are in the cycle. The United States is way ahead of this region in the IT cycle and this region cannot afford to slow down just because the US is slowing down. This is the Middle East’s chance to catch up.”
