The channel’s growth relies on AI, cloud, and automation reshaping business processes for new growth opportunities and competitive advantages. As per PwC, AI will potentially generate a US$320 billion economic impact in the Middle East by 2030. According to Gartner, GenAI will integrate into 90% of global companies’ operations by 2025.
By Abdul Rehman Tariq Butt, Regional Director – Middle East at SolarWinds
While 2023 had its fair share of ups and downs for enterprises in the Middle East, the IT sector remained particularly resilient. Faced with evolving customer needs, and the pressure to optimize all aspects of their operations, CEOs and decision makers turned to their technologists. Consequently, while budget constraints plagued other departments, IT spending continued to rise. IDC projected ICT spending across the META to top US$233.8 billion last year, an increase of 3.9% over 2022. This bode well for the channel which continues to play a critical role in translating business objectives into the robust IT solutions that enable them.
Now at the start of 2024, opportunity continues to abound as the latest forecast by Gartner projects that IT spending in the MENA region will further accelerate in 2024, increasing 4% from 2023. For the channel, growth will largely be determined by three interwoven technology domains: artificial intelligence (AI), cloud, and automation. These technologies will not only change the way companies optimize their business processes, they will also create new opportunities for growth, differentiation, and competitive advantage. PwC, for example, estimated that the potential economic impact of AI in the Middle East could reach US$320 billion by 2030. This is backed up by research from Gartner which predicts that generative AI (GenAI) will be an integral part of the work of 90% of companies worldwide by 2025.
Of course, opportunity alone won’t translate to revenues for channel players. If they are to capitalize on the increases in IT spending, and the imminent need for impactful AI uses cases, channel partners must overcome several challenges.
Sufficiently skilled staff
The skills shortage has been something of a perennial challenge for IT teams in the region. And with the advent of powerful new technologies, it is one that is set to become even more difficult to navigate. Channel partners must be able to deliver value to their customers by helping them take advantage of the latest AI, cloud, and automation opportunities that improve business outcomes and minimize risks.
To do this, partners need to invest in continuous employee education and training to increase their competencies in these areas and stay at the cutting edge of technology. The added advantage of this is that it will serve to simplify their own work. For example, through automation they could overcome the resource constraints that they themselves face while gaining hands-on experience that will then enable them to provide the best possible guidance to their customers.
Given how nascent technologies like AI are, this isn’t a segment where organizations are likely to find skilled professions with decades of experience. This means that channel players can take advantage of tapping into younger talent. They can do so by establishing partnerships with educational institutions, industry associations, and other organizations, to facilitate access to qualified talent.
Compliance with regulations and ethical standards
With any rapidly evolving technology, regulation often has to play catch up with innovation. Keeping up with this dynamic regulatory environment can be a formidable channel. Channel partners can add significant value by establishing themselves as experts in understanding and navigating the nuances of evolving compliance requirements. This is particularly crucial for AI. They can add value to customers by working with them to ensure their AI solutions are transparent, fair, and responsible.
Industry differences
Different industries have different needs. Channel partners should focus on specific industries or use cases where they can position themselves as experts. By customizing solutions to the specific needs
of their target markets, partners can show their customers how they can solve their challenges and achieve their goals. For example, the application of AI in manufacturing could be very different to the use cases in the Banking and Finance sector. The benefit of this approach is that channel players who work to develop such specialization would eventually be in the position to establish a best-in-class framework that can then be replicated across the environments of customers in the same line of business. Focusing in on a particular market segment will ensure the channel organization stands apart as a trusted advisor rather than just a delivery partner.
2024 will be a crucial year for the IT channel, as AI will become increasingly mainstream and continue to drive other topics such as cloud and automation. Channel partners can prepare for this by improving their skills, sharpening their positioning, and strengthening their partnerships. This is the only way they can help their customers to fully utilize the potential of technological changes and hold their own in a highly competitive market.
