A look at events that shaped the MENA chan­nel in 2018

Channel Middle East - - Front Page - By MANDA BANDA

As is the case when the year draws to a close, Chan­nel Mid­dle East looks at events that shaped and made an im­pact on the Mid­dle East and North Africa (MENA) tech­nol­ogy chan­nel. This year has come and gone quite fast. Even though 2018 started with in­dus­try ex­perts ex­press­ing a lot of op­ti­mism about IT spend­ing in the re­gion, it is events that tran­spired mid­way through the year that damp­ened down the ear­lier gains that the mar­ket had made es­pe­cially in Q4 2017.

Al­though the PC sec­tor has con­tin­ued to

wit­ness slug­gish sales for the past 36 months, de­mand for tablets and smart­phones seemed to also have slowed down in the Mid­dle East and Africa (MEA) a mar­ket that once had the high grow.

That said, the last 12 months have been chal­leng­ing for the Mid­dle East and Africa chan­nel. Af­ter the volatil­ity of that has lin­gered in the chan­nel for over two years now, many re­seller part­ners where hop­ing 2018 will usher in re­newed hope and im­proved IT spend­ing but 11 months down the line chan­nel part­ners have been say­ing

that this year was just as de­mand­ing, chal­leng­ing and dif­fi­cult to nav­i­gate as 2017.

Whether you are a vendor, dis­trib­u­tor or re­seller, the pre­vail­ing mar­ket con­di­tions re­quire stake­hold­ers to adopt a “creative and prag­matic ap­proach, and look for ways to build rev­enue on proven busi­ness path­ways.

While the mar­ket out­look in the re­gion re­mains volatile, the im­pact on chan­nel busi­nesses that have em­braced change and fo­cused on de­liv­er­ing value has been min­i­mal as th­ese chan­nel pi­o­neers have been do­ing busi­ness and ac­quir­ing new cus­tomers.

For most of this year and in 2018, the story of the global IT in­dus­try has been one that paints a gloomy pic­ture for the year ahead as both IDC and Gartner are not ex­pect­ing the PC mar­ket to re­turn to some re­sem­blance of pos­i­tive growth un­til 2019. But is growth on the hori­zon for the en­tire IT sec­tor? Is the mar­ket out­look ex­pected to im­prove in the year ahead? As tech­nol­ogy and mar­ket shifts present the re­gional chan­nel sec­tor with new chal­lenges, part­ners are nav­i­gat­ing the mar­ket tran­si­tions cur­rently un­der­way as they want to emerge from them much stronger.

Amid all th­ese new de­vel­op­ments and tran­si­tions hap­pen­ing in the IT sec­tor, the chan­nel has con­tin­ued to evolve and rein­vent it­self all in an ef­fort to stay per­ti­nent to the re­gional mar­ket.

An­a­lyst Gartner Inc said ear­lier this year that the Mid­dle East and North Africa (MENA) IT spend­ing is pro­jected to reach $155.8bn in 2017 a 2.4% in­crease from 2016.

Ac­cord­ing to an­a­lyst Gartner, world­wide IT spend­ing is ex­pected to grow 3.2% next year, to reach $3.8 tril­lion, ac­cord­ing to Gartner.

The an­a­lyst com­pany said that the mar­ket is still tran­si­tion­ing from own­er­ship to ‘as-aser vice’ mod­els of IT spend­ing, which is driving soft­ware spend­ing to the high­est growth rates in IT over­all.

While cur­rency volatil­ity and the po­ten­tial for trade wars are still play­ing a part in the out­look for IT spend­ing, it’s the shift from own­er­ship to ser­vice that is send­ing rip­ples through ev­ery seg­ment of the forecast, Gartner stated. “En­ter­prise soft­ware spend­ing is forecast to ex­pe­ri­ence the high­est growth with an 8.3%

in­crease in 2019. Soft­ware as a ser­vice (SaaS) is driving growth in al­most all soft­ware seg­ments, par­tic­u­larly cus­tomer re­la­tion­ship man­age­ment (CRM), due to in­creased fo­cus on pro­vid­ing bet­ter cus­tomer ex­pe­ri­ences. Cloud soft­ware will grow at more than 22% this year com­pared with 6% growth for all other forms of soft­ware. While core ap­pli­ca­tions such as ERP, CRM and sup­ply chain con­tinue to get the lion share of dol­lars, se­cu­rity and pri­vacy are of par­tic­u­lar in­ter­est right now. Eighty-eight per­cent of re­cently sur­veyed global CIOs have

de­ployed or plan to de­ploy cy­ber­se­cu­rity tech­nol­ogy in the next 12 months.

In 2018, data cen­tre sys­tems are ex­pected to grow 6%, buoyed by a strong server mar­ket that saw spend­ing growth of more than 10% over the last year, and in 2018 will come in at 5.7% growth. How­ever, by 2019 servers will shift back to a de­clin­ing mar­ket and drop 1% to 3% ev­ery year for the next five years. This, in turn, will im­pact over­all data cen­tre sys­tems spend­ing as growth slows to 1.6% in 2019.

Con­se­quently, this is driving chan­nel part­ners

to con­tinue in­vest­ing and in­no­vat­ing by adding more value to the prod­ucts and ser­vices they take to mar­ket de­spite op­er­at­ing in a tough and com­pet­i­tive busi­ness en­vi­ron­ment. That said, chan­nel part­ners and the en­tire ecosys­tem can look for­ward to 2019 lifted by the fact that most in­dus­try pun­dits are ex­pect­ing the over­all IT mar­ket to im­prove largely driven by the dig­i­tal trans­for­ma­tion that is cur­rently, cloud com­put­ing, smart city ac­cel­er­a­tion, adop­tion of ar­ti­fi­cial in­tel­li­gence (AI), IT se­cu­rity and ser­vices.

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