Totally Wired

This year marks the 50th anniversary of Holcom, Information Technology Group’s (ITG) mother company. How was 2016 for the company?

It was a challenging year. The political situation in Lebanon was in a deadlock for most of the year. That of course slowed down developments, particularly in the public sector. On the bright side, at the end of 2016 we had an opening with the election of a new president and the appointment of a prime minister. That allowed us to achieve a good last quarter and end 2016 in relatively good shape. Of course, results did not meet our expectations; we had hoped to have a better year, but it was okay. We then started 2017 with a lot of hope. Lebanese people are optimistic by nature; to live and work in Lebanon, one has to be optimistic. Now that 1Q2017 is behind us, we still sense that the situation is not at its best. On the positive side, we witnessed the nominations of general managers and other tier-one officials by the government. Two important things remain: the budget, which needs to be approved soon, and the parliamentary elections. I believe that the elections will not happen within a few months, but in case a new law will be passed, that will surely have a good impact on the overall situation.

What are your expansion plans both geographically and in your portfolio?

There are two dimensions to this. Historically, ITG have been working in the region and our business is not limited to Lebanon. We have a presence in many territories around us. We have projects in Jordan, Kuwait, Iraq, UAE and Egypt. This kind of international development for certain parts of our portfolio is of course going to continue. Iraq has not been easy over the last few years, but now, with what is happening there on the security side, we will hopefully be undertaking some new investments as we foresee good developments. When it comes to our portfolio, we have organically developed some new activities. First, it is worth mentioning that as a group, we have traditionally operated under a ‘value-added reseller’ model. Under that scheme, we basically buy products & solutions from IT major brands (such as HP, Cisco, Canon, Apple, Oracle, and Microsoft) and we resell them providing added-value services such as implementation and of course local support. This is what we have been doing for the last decades. However, the IT market is changing. This kind of model is old and will be transformed into something new, where customers will buy technology differently. They do not want to buy IT products, manage them, install them and have employees run and support them; they want to buy IT as a Service (ITaaS). They need a credible company that has all of the skills and expertise to provide them with ‘Managed Services.’ Some people call that Cloud-based services, others call it Managed Services; there could be different names, but it is not a new idea; it is the concept of Outsourcing. Companies historically have been used to managing their own IT internally. Today, many businesses find that complicated; finding the right IT staff, training them, certifying them, and retaining them, in addition of course to operating an in-house data center along with servers and networking equipment. We are proposing services to manage customers’ IT infrastructure, hence removing the IT complexity while improving their operations. They can focus on their core business, while we take care of their IT infrastructure and security. We have built data centers in Lebanon and can provide top quality Managed Services and solutions.

What is your strategy to boost the use of Cloud services by all your clients?

We are Microsoft’s largest partner in Lebanon and are proposing Microsoft cloud computing solutions, in addition to other cloud-based solutions from other leading partners. We established, over a year ago, a company called Cirrus, which is affiliated to ITG, which specializes in the provision of managed services and cloud services. It is about going to the customers, and telling them that rather than having to manage their own IT, we can do it for them better and at a lower cost of ownership. We can give customers the IT platform, host their data, conduct backups, and do business continuity planning, and all they have to do is ‘consume’ IT and run their applications. It is like a subscription-based service.

Do you find that banks, being more traditional minded, are reluctant to use services like yours?

It is a question of time. Of course, banks are traditional and conservative by nature, but technology does not wait. What technology offers today was not offered five years ago, and what will be offered five years down the line will also be different. Banks worry about business continuity and securing their data. They also worry about speed, efficiency and performance. Five or six years ago, communications were worse than they are today. There were no options and plans for disaster recovery and for high systems availability, making customer services difficult in case of system’s disruption. All of those issues have a solution today, and as time passes by, there will be even more options and possibilities. It is our role to think about how we can integrate all of those technologies in a way that will relieve the client from the complexity of the technology. Thanks to technology and innovations, it is true that things may seem to become easier over time, but in the back office, matters are becoming more complex. We have to plan and make sure we have the right people, certify them, build their skills, and ensure the same expertise in case of staff turnover. We are working to ensure a set of in-house skills, and amortize that over many customers. It becomes a matter of scale; it will soon be impossible for companies to do all that in-house.

Over the years ITG has built solid partnerships with leaders in the ICT industry. Are there any M&A (Mergers and Acquisitions) set to come in this year?

We are always watching and assessing. In 2016, we were more in a mood of consolidating and restructuring what we have because during the past few years, we did a number of acquisitions. In 2016 we did one acquisition in the software field; we acquired a company that specializes in Microsoft CRM software solutions. It was a skill-set that we lacked, so we assessed that company and acquired a team of around 10 persons and integrated the CRM solutions within our software offering. The general situation during the last couple of years has not encouraged us to undertake more acquisitions. As mentioned above, we are rather focusing on transforming ourselves to embrace the new trends and challenges. That is our priority. In parallel, we are assessing some companies that need the financial backup of a group like ours, and which acquisition will expand our reach to more customers. M&A is something that is always in the back of our minds.