Joseph Hanania

'The overall consensus from the Washington meeting was that global IT demand will not recover before the end of 2003,' he says, 'It is a question of working through the overexpansion of 1999-2000 in particular. But it is not the same story here in the Middle East.

'Partly that is because we never had the overexpansion and over investment in the first place. Here the mobile phone companies and telecos are still growing. Saudi Telecommunications can not cope with demand for mobile phones, and the use of phones in general is not decreasing at all.

'This is bound to be good for IT demand. Telecos will need more storage, more call centres. Indeed, more of everything. So this is a good market for us. Internet use is also growing rapidly, but again we had hardly any of the over investment of the dot-com bubble and so we have not suffered from this crash.'

Even the prospect of a war in the region early next year does not dent Mr. Hanania's enthusiasm. While not wishing to appear in any way partial, he points out that people tend to make a lot of phone calls in times of war, and that this just underlines his major point about telecommunications being the fastest growing industrial sector in the Middle East.

E-government is his second reason to be cheerful. Mr. Hanania is particularly optimistic about the outlook in the education sector.

'Education is the least developed government sector in the Middle East and has huge room to grow,' he says, 'You can pick out some major universities, such as the American University of Beirut, but there really are not many for the population here.

'Other factors such as 9/11 are encouraging students to study closer to home, and initiatives such as the Dubai Healthcare City include a university hospital. So I can see huge prospects for IT in the education sector over the next few years.'

Mr. Hanania is less optimistic about the immediate prospect for IT demand from the financial services and banking sectors. He notes that most banks have a solid IT infrastructure in place, although security and disaster recovery offer some opportunities. Similarly a few banks have yet to adopt Internet banking.

'In the oil and gas sector we will continue to see a move towards an open industry architecture,' he adds, 'This is the region's biggest industry, of course, and IT is a big part of exploration which is all about the analysis of data. We believe the stress will be on scaleability for key applications and open standards.'

From the retail side, Mr. Hanania points to a strong appetite for PCs as regional penetration levels are still rather low compared to other parts of the world. Likewise the move to notebook computing and PDAs is gathering pace, and the new Tablet PC has just been launched.

'I am sure it will do very well here,' says Mr. Hanania, four days after the launch of the Compaq Tablet PC in Saudi Arabia.

On May 7th Hewlett-Packard formerly merged with Compaq of whom Mr. Hanania was the Middle East managing director. So did this merger cause the widespread confusion among customers that his rivals were all hoping for?

'We took great care to make sure that there was no confusion for our customers,' he says, 'We provided our clients with a clear road map to our product range for the next three years, something incidentally that none of our rivals have ever done. Customers have very much appreciated this approach, and we have actually increased business since putting the two businesses together.

'I can understand what our rivals were hoping for, so would I in their position, but it just did not happen. We did not lower our sales targets either. We simply put the two of them together and kept to our aggressive targets.'

But Mr. Hanania admits that the merger process has meant a good deal of extra internal and integration work for him personally, 'I have just made sure that this has not affected sales and that we did not lift our eyes off the customer,' he explains. Indeed, there were no sales staff lost in the merger of the two companies in the Middle East.

Independent third quarter market research data confirms what Mr. Hanania claims. HP took a 37.6% share of the regional computer market and grew by 30.3% in Q3 this year, with Dell its nearest rival at 13.4% on a lower growth rate of 28.5%. For the moment the HP/Compaq merger seems to be working just fine in the Middle East.