Can Managed Services Strike Oil In the Middle East?

Doing business in the Middle East can be a tricky endeavor for technology companies. But plenty of IT experts have found success in the region. Sales of enterprise application software across the Arab Middle East and North Africa grew 16 percent in 2005 and roughly another 13 percent in 2006, according to IDC. Now, managed services and software as a service (SaaS) are gaining popularity across the region, too.

Pick up the Middle East Technology News and Channel Middle East, and you’ll find magazine articles covering some very familiar issues: Falling hardware margins, demanding SMB customers with limited budgets, and solutions providers searching for higher-margin opportunities.

That’s why MSP platform providers like Kaseya are pushing into the Middle East. The company has named channel industry veteran Jim McMahon to oversee Kaseya’s strategy across the region. Kaseya will focus initially on signing deals with the numerous MSPs currently active across the Middle East–including the United Arab Emirates, Saudi Arabia, Qatar and Kuwait, according to a company press release.

To accelerate market demand, Kaseya is offering interested MSPs the chance to download and use its software at no charge for a 30 day evaluation period. Recent research by IDC valued the IT services market in the UAE alone at $507.81 million in 2006 and expects the market to grow to $964 million by 2011, Kaseya noted.

This isn’t the first time I’ve seen a major industry (outside of the energy sector) look toward the Middle East for new opportunities. From 2002 to 2004, I worked for New York Institute of Technology — a college that offers graduate and undergraduate programs at three locations in the Middle East through institutional affiliations in Bahrain, Jordan, and Abu Dhabi.

At first, some NYIT insiders were skeptical about the college’s expansion into the Middle East. But it turned out to be a win-win for the college and local students. If Kaseya plays its cards right, the company could deliver a win-win for itself and solutions providers across the region.