YEAR IN REVIEW
A look at events that shaped the MENA channel in 2018
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.