Cisco Systems, one of the world leaders in networking
solutions for the lnterqet with $18.9 billion in revenues,
decided to open a regional office in Lebanon. The office
will manage the Levant as well as Armenia, Georgia,
Azerbaijan, Uzbekistan and Tajikistan. Even though Cisco
claims to have over 70% of the local market, its office will
operate in a country that has often been unfriendly toward
investors. EXECUTIVE spoke with Mohamad Abdul-Malak,
Cisco’s area manager, about its reasons for choosing
Lebanon and the company’s plans for the future
Several foreign companies have ongoing disputes with the
Lebanese government. Wouldn’t H have been better to set up your
office in another country?
ABDUL–MALAK We see Lebanon as more dynamic compared to
neighboring countries. Lebanon has a better business climate, which
is due to private investors. When you look at Jordan and Syria, most
of the projects are government-related. We cannot depend mostly on
government projects. It takes too long and the process is not IT-related.
People who buy from us are those looking for value. I always use
an example based on cars. The Koreans make good low-budget cars.
But if you want to buy a BMW and you are basing your budget on a
Korean car, you cannot match it. This is the problem we have with
governments. They want all the values, all the features, but they want
to pay for the product that is not within the budget.
Lebanon also has more talent and more people exposed to technologies.
All expatriates that come back to the country bring a
wealth of experience, ideas and visions that we’d like to implement.
Have you faced problems operating In Lebanon?
ABD UL–MALAK The main concern is on a day-to-day basis. We
have, for example, IP telephony. This is definitely not voice-over IP. It’s
just to enhance the application internally. When you hook it to the outside,
you’re still using the PTT 100%. From the PTT point of view, it’s
the same. We needed a demo for one of the biggest Lebanese banks
moving into its new headquarters. We wanted to import an IP telephone;
a telephone that can be connected to a network, like any other PC. We
could not import a single telephone at the airport, because what they saw was voice-over IP. It was a lot of effort for our partner. It even got to the point that he had to talk to the presidential office to have it cleared.
This raises a question: How are we going to import our equipment? We receive equipment on a daily basis for internal use, not for commercial.
Is creating a Silicon Valley In Lebanon feasible?
ABDUL–MALAK The problem here is legislation. If! go to Jordan or
Dubai, I would receive import/export tax exemptions, and there are
other facilities provided by the government. We need a leader in the government who
says, ‘Where are
we taking Lebanon?’ I don’t think Lebanon will gain on banking services
like it used to. The answer to an IT initiative for a country like
this should be “yes.” If the Indians can do it, why can’t we?
However, you need a leader who can drive it. What is required is to
change the administration, so that when I import a single CD from
the Cisco office in Dubai to the Cisco office in Lebanon, I don’t
have to pay LL200,000 per CD every time. This is ridiculous.
Does the Lebanese market have a lot of potential?
ABDUL-MALAK To look at the market, I have to compare it to
Jordan. Lebanon is still ahead of Jordan when it comes to Cisco, mostly
because of the banking sector. It has pioneers in technology; it’s capable,
it performs well and our partners have supported them well. The
market has more potential. Here I have more opportunities for external
projects with Lebanese firms. I’m about to sign a project that includes a
regional ISP network. It happens that those in the firm are Lebanese. So
we benefit from being here, and that’s what we look at. We’re more
aware in this market than elsewhere, and this is due to the buying power.
There’s more money here than elsewhere.
What growth are you forecasting In the Levant?
ABDUL–MALAK Our growth in the Middle East is following the
company’s worldwide growth, which is about 45% to 50% in revenues
annually. In Lebanon growth is above that in the region and worldwide.
How will you maintain or increase your market share?
ABDUL-MALAK Number one is focus – providing enough technical resources in the region. We want to focus on how to gain the services in the market. This is how Cisco will maintain its edge and market share.
You also differentiate yourself from your competitors. We’re not box
pushers; we’re not the cheapest. I don’t like the word cheapest, because
it can’t buy anything. If someone is looking for a minimum investment,
we can talk. We can adjust the solution; we can adjust the service to fit
his needs. These are the differences that we want to maintain.
