27 December 2008
BEIRUT: A strategic partnership between Lebanese technology companies EDM and eSharing is breaking the "go-it-alone" status quo of the Middle East IT sector. eSharing will develop enterprise resource software that interfaces directly with EDM's new Global Positioning System (GPS) and mobile cellular communications (GPRS and GSM) hardware platform for corporate-fleet vehicle management.
In separate interviews with The Daily Star, EDM managing partner Imad Kozem and eSharing CEO Joe Hage agreed that the partnership bucked a trend in the information-technology (IT) sector in Lebanon and, more generally, throughout the Middle East.
"Lebanese and Middle Eastern companies almost always believe that, [only] by themselves, can they, and should, do anything. Very rarely do they see the value in saying, 'I need you to be my partner ...' [but by partnering] we obviously benefit," Kozem told The Daily Star.
Hage echoed Kozem when discussing the value of strategic business partnerships: "In fact, we view it as a recipe for success," he said.
Hage told The Daily Star that he believed his company's partnership with EDM represented an American attitude toward cross-company resource sharing. The focus of eSharing focus is on software development, as well as on IT and localization services, but their expertise is not in building IT hardware.
When considering their core competency, Hage says of eSharing: "We have a mindset that is typical of the United States: Do we build, buy or partner? Let's make sure we are investing in the right things."
On the other hand, EDM's TRAX Locator, a GPS, GPRS and GSM device, highlights its hardware expertise. It allows firms to track the movement and status of their entire fleet of vehicles in real time, combining location and communication services such as tracking, geofencing, mapping and messaging, as well as engine immobilization and service reports.
While such fleet-management platforms are available from Western firms, cost, language, and culture are usually significant barriers for business development in markets outside of Europe and the US. It is these areas that are the target markets for the TRAX hardware and accompanying software.
The firms' partnership underlines the advantages of competency specialization and draws a clean line between the hardware manufacturer and software developer, potentially limiting both initial and total costs.
In so doing, the partnership is also testing Lebanon's potential as a technology-outsourcing and off-shoring hub with specific advantages, including an educated population, a centralized geographic location, and multi-lingual capabilities.
EDM and eSharing initially met at the Termium technology exhibition, and Kozem believed that the annual event is a good opportunity for meeting potential partners. However, he told The Daily Star that, though those events that are effective networking arenas in Lebanon, they are rare and often expensive to attend.
This is likely both a symptom of, and a reason for, the ingrained aversion to similar business partnerships in Lebanon, whether or not they are in the IT sector. That the most entrepreneurial of Lebanon's population leave the country in droves clearly reinforces roadblocks to corporate-openness to resource sharing and dynamic strategies.
Whether this collaboration will stand as an example of the benefits of cross-company resource sharing in the Middle East remains to be seen. The global financial crisis will certainly test the standard "go-it-alone" business model in the region. Partnerships that allow companies to focus on economies of scale and core-competency, while reducing cost of ownership, will increase their competitiveness even as budgets tighten.
Kozem believes that, "2009 will be tough ... Obviously a company shouldn't partner for partnership's sake, but the right partnership is one that takes advantage of specific expertise."
Copyright The Daily Star 2008.
