Uncovering Middle East Tech Opportunities: Roadmap to GTM Success

What will we cover?

• Market Size and
• Opportunity
• Competition Cultural
• Aspects Go To Market
• Processes Regulatory Aspects

Introduction to Middle East Tech Opportunity

There are several definitions of middle east countries. But for this article we will use GCC countries which are (KSA, UAE, Kuwait, Qatar, Oman, Bahrain). These countries have an economy of ~ USD 1.9 Trillion with high to very high per capita income (Qatar’s per capita income is higher than USA).

KSA shows a huge potential for tech spend: With several CSPs have agreed to open up data center, and building up of new city Neom – SaaS spend is expected to boom there in the near future.

 What kind of companies will see immediate impact

• Fintech – Fintech in middle east are least 8 years behind India
• Similarly edu tech, med tech
• SaaS products in emerging areas where there is no incumbent or areas where rules are getting re-written (information security compliance)

Which are the industries?

• Government (Security, Surveillance, Governance,
• Regulations are the primary categories)
• Hospitality, Tourism, Travel Media,
• Entertainment Real estate
• Retail

Can I capture Middle East in one go? If I penetrate in one country will it be easy to penetrate in other countries also?

Fragmented market: Unlike europe which is predominantly a single country for business purposes (except for languages), middle east has too many countries and every country has their own rules and policies. It will be impractical to look at each and every country when you want to enter in to the region. Focus on the 2 largest economies in the region (KSA, UAE) to start with. If it succeeds then you can look at other countries.

I am targeting Startups. Is it a large market?

• The startup ecosystem is too new and small. For eg: Series A funded fintech startups might be 30 in UAE, however in India unicorns are 100+. However, governments are doing everything to bring startups/ If you are looking to sell to startups, primarily understand your market depth before making investment decisions.
• SME and mid market is a huge market as predominantly businesses there are organised unlike a long tail unorganised SME market in India.
• If you are targeting organised SME & mid market, or enterprise customers this market might be promising.

How is the paying capacity?

As mentioned in the intro slide, the GCC countries have high per capita income. For Eg for UAE it is around 47K USD, however the PPP per capita income is 77K USD which is close to USA’s per capita income. Customers in the region pay the top dollars if the product suits their needs. Several unknown tech brands outside the region have built business with tens of millions revenue, by building the product which serves the local needs.

How intense is the competition?

Less prevalent of challengers to large tech incumbents – In every category, large tech incumbents (like Microsoft, Oracle, Service now etc) are already having a good market share in the region. However, there is a vacuum of small, nimble startups which are challenging them are missing (reasons could be on-prem deployment, long sales cycle, in-person sales processes etc). However, it provides a huge opportunity for startuo fill up the space, if you carefully plan to overcome the above challenges.

What is the level of tech spending propensity?

• Higher ACV per customer: Since there is a dearth of local tech companies in the region, they depend upon the USA for major tech products which come with a premium pricing. As a broad rule of thumb you can charge 3x price from customers in comparison with a similar company in India (similar size in terms of funds raised, revenue).
• It is a highly brand conscious market. Big 4, Gartner sells. As startups regularly associate with larger logos or sell through large partners

We are a SaaS product. What is the level of acceptance of SaaS products?

• SaaS products are accepted by startups (but they are less in numbers), SMEs have less resistance for remote hosting of data. However, data has to be hosted locally, especially if it is regulated industry like BFSI, healthcare, telecommunications etc. 

• It means, it will be highly challenging to scale as a SaaS product if you are catering to the above industries or your customer persona is large enterprise & government. You should have on-premise deployment option including bare metal deployment for the above scenario.

What are the benefits of entering through Dubai?

• UAE is not only a market to consume tech products but is a marketplace to understand the whole middle east region. The whole region looks up to UAE market for new age technologies. Large events like Gitex (180 K people attending and more than 5K brands exhibiting) attract tech brands, customers, investors, and partners from the whole region. There are several large events happening on a regular basis even for small niche areas where the buyers from the whole region assemble.

What are the benefits of entering through Dubai?

• Cosmopolitan culture: Even many experienced professionals in the region worked in different countries. It gives an opportunity to recruit people who understand the whole region.
• Language: Unless you are in dealing (product will be utilised) with government departments, English will be the de facto language.
• Government is one of the biggest spenders in digital / technology
• Cloud migration is emerging and provides huge opportunities
• Ability to meet relevant people at ease especially for Indians Less cost of living, ease of conducting business
• Small geography – easy to meet people in different cities

How easy to start a company from UAE?

UAE wants to create a vibrant and thriving startup ecosystem which is easy for startups to start and scale. So, there is very less regulation about information & cyber security, data privacy etc.It will cost approximately 12K AED to start a company and another 3-5K AED for bank account opening and other regulatory approvals.